KUCHING, April 30: Increasing the minimum wage during the Covid-19 recovery stage might affect productivity rates negatively, increase the cost of doing business, and increase the cost of living in Malaysia, opined Sarawak United Peoples’ Party (SUPP) Stakan branch chairman Dato Sim Kiang Chiok.
According to Sim, Malaysia also faces other challenges, such as the Ukriane-Russia conflict that is disrupting world trade equilibrium and the weak Malaysian ringgit that will increase the cost of imports.
“In my opinion, the minimum wage that will be introduced in our country will have many implications on the economy,” he said in a statement today.
Sim said this pay rise is irrespective of productivity, and companies still struggling to recover from the disruption caused by the pandemic will have one more challenge to overcome.
He also said employers of bigger companies will have to start planning their manpower requirements carefully and may reduce or redeploy their human resources so that the cost of doing business can be controlled.
“All these additional costs by the increase in salary will be passed onto the selling price that will eventually affect the employee cost of living.
“The increase in minimum wage will also have a knock-on effect on the other employees on the different salary scale who will also seek similar revision in their salary which will put pressure on employers to increase their salary too,” he added.
Sim pointed out that the government should help through assistance such as the Batuan Sara Hidup (BSH), price subsidies on petrol and gas and cooking oil, and price control of essential items.
He believed that the cost of living is much better managed with the inflation under control with the present method.
“Increase in minimum wage must match the increase in productivity, and raising it now is not the right time as our productivity is still trying to recover.
“Our productivity must be given the time to catch up to the level before the first Covid-19 lockdown,” he said. — DayakDaily
