‘Minimum wage increase to have domino effect on courier firms’

Amec president Teong Teck Lean said while the association supports the increase, it was of the view that it should not be done abruptly.

PETALING JAYA: The minimum wage of RM1,500 a month from May 1 can have a “domino effect” on courier companies and impact the industry, according to the Association of Malaysian Express Carriers (Amec).

President Teong Teck Lean said while the association supports the increase, it was of the view that it should not be done abruptly.

“This huge increase of 25% will not only involve employees earning below RM1,500 but will also their top officials.

“It will have a ‘domino effect’ on the company, and the impact will be greater than expected,” Teong said in a statement yesterday.

He added that the intense “price competition” among the domestic and foreign players had made it difficult to ensure the survival of all companies in the industry.

He also noted that the foreign-owned companies have more financial resources compared with their local counterparts

“Every company is racing to continuously lower prices to below cost in the hope of surviving in the industry,” he said, adding that the local courier companies are suffering losses, which will in turn affect more than 150,000 workers nationwide. Most of them are in the B40 group.

“Directly and indirectly the impact of the fierce competition will have a negative impact on about 600,000 people if workers’ families are to be included,” he pointed out.

While Amec welcomes the directive to increase the minimum wage, there should also be regulations on minimum prices to ensure “fair competition” so that the local companies can continue to survive, according to Teong.