`


THERE IS NO GOD EXCEPT ALLAH
read:
MALAYSIA Tanah Tumpah Darahku

LOVE MALAYSIA!!!

 


Friday, April 18, 2025

Dr M links higher wages to lower value of ringgit

 The former prime minister says increasing wages could lead to inflation as production costs would increase.

mee kolok
Dr Mahathir Mohamad said a plate of noodles cost only 3-5 cents when he was a boy, compared to current prices of RM3-RM5.

PETALING JAYA
Dr Mahathir Mohamad has suggested that increases in the minimum wage could lead to depreciation of the ringgit, and advised the government to take a cautious approach on such matters.

In a post on X, the former prime minister said currencies could fall in value if a government attempts to deal with inflation by allowing wages to rise.

However, a higher wage just means the public would be able to buy slightly more than what they could previously purchase. Over time, the cost of living would go up again as the increase in pay would increase the cost of production.

“Now we are back to square one. There will be a demand for another increase in pay.

Mahathir Mohamad
Dr Mahathir Mohamad.

“If this is agreed to there will be the same result, the new pay will not increase the purchasing power but would increase the cost of production.”

Looking back in history, he said: “When I was a boy way back in the 1930s I was able to buy a small plate of mee (noodles) for just 3-5 cents. Today I have to pay at least RM3-RM5”, describing it as a 1,000% depreciation in the value of the ringgit.

Mahathir, who during his first stint as prime minister had pegged the ringgit following the Asian Financial Crisis in the ’90s, said that “lately Malaysia has been increasing minimum pay frequently.”

In February, the government had raised the minimum wage by RM200 to RM1,700 three years after the wage was raised to RM1,500.

“We need to be careful. The ringgit might suffer the same fate as the Indonesian rupiah and Turkish lira.”

However, Mahathir acknowledged that currency depreciation was not only due to increasing income to meet higher costs of living, but was also caused by corruption, issuance of bank notes and currency notes of higher values, currency trading and short selling, as well as many other factors. - FMT

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.