By DayakDaily Team
KUCHING, Oct 5: The Sarawak Timber Association (STA) has proposed regional or sectoral rates over a uniform, nationwide minimum wage—describing it as a more reasonable and realistic approach, taking into account distinct differences in the cost of living, regional economic conditions, productivity levels, and employers’ actual capacity to pay.
In a statement, STA chief executive officer Annie Ting said that while the association recognises the importance of improving workers’ wages, concerns were voiced over the scale of the proposed increase and its potential impact on employers, particularly small and medium-sized enterprises (SMEs) and labour-intensive businesses, even with the temporary exemption granted by the government.
She said that while a uniform minimum wage may provide administrative simplicity, simplicity should not be the sole consideration.
“The government must comprehensively assess its potential impact on employment, business sustainability, regional economic conditions, and the viability of different industries,” she said.
Going forward, she said, the government should focus primarily on determining an appropriate percentage increase and adjustment to the existing minimum wage rate, rather than determining an entirely new quantum each time.
“Any increment from the current minimum wage at a time when businesses are facing rising operating costs and challenging economic conditions would significantly raise labour costs for employers and warrants careful consideration of their ability to absorb the additional costs without adversely affecting business sustainability, employment, and competitiveness.
“The impact of an increase in the minimum wage also extends beyond the direct increase in basic wages. Employers may face higher statutory contributions and other employment-related costs, as well as immense pressure to adjust the wages of employees earning above the minimum wage to maintain appropriate wage differentials,” she said.
Citing Prime Minister Datuk Seri Anwar Ibrahim’s recent remarks at a UiTM Alumni Association event, where he stated that a minimum wage of RM3,100 for government-linked companies (GLCs) has been in place since last year and suggested that this should serve as a benchmark for the private sector, Ting said the capacity to absorb higher labour costs varies significantly across businesses, sectors, and regions.
While some large and highly profitable corporations may have greater capacity to offer higher wages, she said, their circumstances should not be taken as representative of all employers.
“SMEs, as well as labour-intensive businesses, often operate on narrower margins and face greater challenges in absorbing substantial increases in labour costs. The prime minister himself has acknowledged that smaller businesses face different realities when responding to significant wage increases.
“A sustainable approach to wage policy therefore needs to recognise these differences and consider the varying capacity of employers to absorb higher labour costs, particularly among SMEs and labour-intensive sectors.
“Accordingly, the capacity of large and highly profitable corporations should not be used as the sole benchmark for a uniform, nationwide minimum wage,” she said.
She also reiterated the association’s support to efforts to improve workers’ wages but strongly urges the government to carefully consider the scale and timing of any proposed minimum wage increase, taking into account the prevailing economic climate and its impact on employers, particularly SMEs.
“Minimum wage policy must be carefully calibrated to ensure that wage increases are sustainable and do not place undue pressure on businesses, employment and overall economic competitiveness,” she said. — DayakDaily
