What Do Experts Think About the Minimum Wage Review?

The minimum wage has become a popular subject once again in Malaysia. 

Recently, Prime Minister Tan Sri Muhyiddin Yassin said that he would review the national minimum wage in his Labour Day speech two days ago. Currently, the minimum wage is RM1,200. 

However, according to Professor Datuk Dr John Antony Xavier, vice-chancellor of AIMST University, RM1,200 barely scrapes the barrel. The professor said that increasing the minimum wage will make employees more productive, but the government should adjust it to the cost of living across this country. 

The government will review the minimum wage soon.

Based on a 2018 report, Bank Negara determined Kuala Lumpur's living wage in 2016 to be from RM2,700 to RM6,500, depending on the number of family members. 

Professor Dr Yeah Kim Leng of Sunway Business School said that the timing is off. He explained that small businesses would be driven out of business if the government increases the minimum wage. 

When is the best time to increase the minimum wage?

Covid-19 will be here for a while as medical experts say that it will moult from a pandemic to an endemic. 

The Prime Minister believes that the government, employers and employees are strategic partners in Malaysia's economy game. For many local employers, this belief is not original, but it is a fresh take nonetheless. 

There must also be a change in policy and attitude. Depending on the reiteration process, there will be more policies heading towards labour's way. This move is significant because the public usually sees the government on the employers' side and not the employees. 

As for the attitude, the strategic partnership will work with some novelty on employers. Dr Shukor Mohd Harun of Universiti Sains Islam Malaysia said that employers and employees must work together to make the collaboration equitable.

Productivity decreased?

Not all employers are prepared to make the change. Some said that productivity comes before salary, but according to a recent study by Malaysian Productivity Corporation (MPC), productivity has increased significantly.

In 2019, employee productivity was 2.1% up, and it recorded a similar growth in 2018. Productivity did drop 5.4% in 2020, but it had a strong reason. It is a Covid-19-induced global trend. Malaysian workers are not alone when it comes to productivity drop during the pandemic. 

The MPC is also expecting productivity to increase in 2021. 

If businesses want productivity to climb a happy altitude, they need to adjust their attitude because attitude determines altitude.

Source: NST

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