BRADER MA' EL : GAJI MINIMA RM1,500, HARGA BARANG AKAN NAIK GILA, HANG PUNYA PASAL. JUST WAIT AND SEE.

 I received this yesterday. The hike in minimum wages to RM1,500 a month will cause another round of price increases.

Indonesian maids’ minimum salary of RM1500.00 per month, with weekends off & annual leave extended, expected to be implemented on 1st May 2022.

The processing fees were raised from the range of RM5k-RM10k before the lockdown to RM24-30K for each maid employed.

This will then be extended to the entire Malaysian work force including foreign workers of other nationalities eg. Pakistanis, Indians, Myanmars, Nepalis etc.

My bowl of noodle at the Hawker Centre was raised from RM6.50 to RM7.00 (8%) after Chinese New Year and last week it was increased further to RM7.50 (15%).

With this minimum wage imposed, rising fuel price, rising prices of goods & services; the next increase will likely take place on the 1st May 2022.

Every biz and industry employs foreign workers, we have close to 12 million of them here (legally & illegally).

Inflation in 2022 would likely be between 25-30%.

• A lot of people can’t afford a basic lifestyle anymore, poverty will rise.
• Security will eventually be an issue.
• The Malaysian economy is spiraling out of control.
• The prospect going forward, is daunting and painful.

 

My Comments : Most certainly there will be a price inflation.

From RM1,200 to RM1,500 that is an increase in wages of 25% !!

All employers will suffer higher costs and they must increase their selling prices to recover the higher wage costs. So prices will go up.

There is also something else that will push prices up even higher. 

Will the productivity of Nuraina the working girl increase by 25% (to justify the 25% wage increase?) The simple answer is no.

So Nuraina earns an extra 25% but her productivity remains the same. 

She will have more money to spend but the quantity of goods and services she can buy does not increase. 

The same thing with her co-workers Fatimah, Ila and Zilah. Because they have extra money they will all start buying extra shoes, extra handbags, drink more Milo-ais, kopi-ais, eat more KFC etc but without any increase in the production of shoes, handbags, Milo-ais, kopi-ais and KFC. 

So the demand for these goods will increase but the supply of these goods and services does not. So the prices of these goods will go up.  

The writer of the comments (in italics above) predicts that prices will increase by 25% - 30%. The prices will certainly increase.

But when prices increase (say by 25%) then it will cancel out the benefits of that 25% wage increase. The poor will still remain poor. Life is going to get harder for everyone.

Back to square one.

• KL March 20 — FMM appeal govt to reconsider minimum wage RM1,500 
• more gradual increase in wage rate to address increase in cost of living
• immediate increase 25% spiralling impact on business cost 
• could derail business and economic recovery.
• FMM proposed RM100 increase in 3rd quarter 2022  — Bernama

 

Conclusion : The whole country will suffer again. Unemployment will increase again. People will become poorer. Melayu akan miskin dulu.

The views expressed are those of the writer and do not reflect those of MMKtT.