MTUC Sarawak ‘sad’ over business leaders’ antiquated policies on minimum wage increase

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KUCHING, Feb 8: Malaysian Trades Union Congress (MTUC) Sarawak is disappointed that business leaders in the country continue to cling to antiquated policies and myopic views in opposing minimum wage increases.

In a statement issued today, its secretary Andrew Lo said this in response to the Malaysian Employers Association (MEF) and Sarawak Housing Developers Association (SHEDA) on minimum wage.

“MEF claims that minimum wage increase would derail the economic recovery. We want to point out that even other business groups have even debunked MEF’s persistent fear-mongering. They had even claimed that 300,000 businesses would go bankrupt if Malaysia introduced minimum wage,” he said.


He also said that SHEDA continues to ignore evidence that minimum wage increase does not lead to unemployment, such as in a 2021 Nobel prize in economics award for a study.

“Employers should no longer argue that increase in the minimum wage would lead to job losses. It is embarrassing,” he said.

On foreign workers, Lo said SHEDA claims that some employers are forced to pay more in wages and would hire fewer workers, leading to a higher unemployment rate.

“This is wonderful because the construction sector employs mostly foreign workers. SHEDA confirms that minimum wage increase should lead to a reduction of foreign workers; reducing foreign workers is one of the objectives of minimum wage.”

Meanwhile, on the topic of inflation, Lo said SHEDA has claimed that based on past experiences, raising the minimum wage had proven to cause prices of goods to spike.

“The minimum wage was not increased since 2020, but prices have increased in the meantime, despite the pandemic. It is, therefore, a fallacy to claim that price increase is due to minimum wage.

“Minimum wage was only introduced in Malaysia in 2010, yet we have already experienced price increase and inflation at a higher level before its introduction.

“Prices of houses have increased faster than wages increase — until the average Sarawakian can no longer afford to buy houses or even apartments,” he said.

He said by continuing to resist wage increases, SHEDA would eventually harm itself as no one except the wealthy would be able to purchase houses or apartments, leading to developers having to close.

“The lower-income group spend the most on consumer goods. By resisting wage increases, SHEDA is reducing spending on consumable goods, therefore harming businesses especially businesses by small and medium enterprises (SMEs).”

He said that SHEDA also claimed that workers willing to work for lower wages could be denied job opportunities because of the government-mandated minimum wage policy.

“This is indeed illuminating of its ultimate intention to reduce wages. Perhaps workers work for free, so magically, we will have zero unemployment. Possibly workers should reduce our wages so business owners and SHEDA will graciously reduce the cost of houses.

“Higher wages will lead to higher purchasing power, which in turn will lead to increased domestic demand and reduce our reliance on exports which are at the mercy of other countries’ economic performance.

“It will also spur productivity growth as employers have to invest in more efficient production methods instead of relying on millions of low-paid, mostly foreign workers,” he said, adding that Malaysia has fallen behind countries like Singapore, Hong Kong, Taiwan, and South Korea. — DayakDaily