Friday 29 Mar 2024
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KUALA LUMPUR (Jan 26): The Federation of Malaysian Manufacturers (FMM) “strongly recommends” current minimum wage for Malaysia to be maintained in the medium term. This is because the industry is facing a hefty increase in the cost of doing business.

According to the FMM's statement today, the current minimum wage is at RM1,000 for Peninsular Malaysia and RM920 for Sabah and Sarawak.

"Any increase in the immediate term should be deferred. The call by several parties to raise minimum wage from RM1,000 to RM1,500 for Peninsular Malaysia is an excessive increase compared to the government’s more reasonable and gradual increase of RM100 or 10% in July 2016. Any increase to the rates must be gradual and cannot be drastic.

"Minimum wage at RM1,500 is too high a basic wage, especially for unskilled workers and new entrants to the job market. In manufacturing, workers are paid allowances on top of basic wages. Take home pay is higher than minimum wage. A high basic wage affects overtime, increments and bonus payments. There are also knock-on effects on wages across-the-board, all of which could force companies to restructure, including possibly reducing employment opportunities, to address the strong wage push and spiralling costs of doing business," the FMM said.

The FMM said minimum wage must commensurate with productivity gain.

“The more important focus is to ensure wages are in tandem with productivity growth, as well as differences in cost of living and economic activity between states and zones. Raising the minimum wage rate in a drastic manner could worsen huge outflows of foreign exchange through workers’ remittances, which is also of concern to the government,” FMM added.
 

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