Minimum Wage Increase: Fact vs Fiction
PETALING JAYA: The Sarawak Bank Employees’ Union (SBEU) has expressed its disappointment at the recent "fear mongering" by some groups over the implementation of the new minimum wage policy.
Challenging the Misconceptions
The union’s CEO, Andrew Lo, stated that it is a misconception that the minimum wage has led to an increase in the prices of goods. According to SBEU, prices have been rising even before the current minimum wage of RM1,500 was implemented in May 2022.
The Real Issue: Labour Income Share
SBEU highlighted that Malaysia’s labour income share is 32%, which is much lower than regional peers of between 45% and 55%. According to the Organisation for Economic Cooperation and Development (OECD), labour income share refers to the portion of the national income that goes to labour compensation.
Questioning SMEs’ Claims
The union also challenged struggling SMEs to disclose their full tax accounts to prove that the RM200 rise in operational costs – from a RM1,500 minimum wage to RM1,700 – could push them into insolvency. If true, SBEU will petition the government to reduce the minimum wage. "Businesses that cannot even pay a minimum wage that is below the poverty line income (RM2,589) have no business to be in business. They should close shop," said Lo.
A Question of Sustainability
In response, the SME Association of Malaysia has cited the expected increase in operational costs resulting from the raising of the minimum wage and the proposed mandatory EPF contributions for foreign workers may lead to some businesses folding. However, SBEU questions whether these businesses were sustainable in the first place.
Conclusion
The Sarawak Bank Employees’ Union’s stance is clear: businesses that cannot afford to pay the new minimum wage should not be in business. By focusing on the importance of a fair living wage and a sustainable economy, we can ensure that the new minimum wage policy brings about positive change for Malaysia’s workforce.
Frequently Asked Questions
Q: What is the new minimum wage policy in Malaysia?
A: The government has announced a new minimum wage policy of RM1,700 per month, effective February 1, 2025.
Q: Will the new minimum wage increase the prices of goods?
A: No, SBEU claims that prices have been rising even before the current minimum wage of RM1,500 was implemented in May 2022.
Q: Will the new minimum wage lead to business closures?
A: SBEU challenges SMEs to disclose their full tax accounts to prove that the RM200 rise in operational costs could push them into insolvency.