Why fuss over the minimum wage?

The contrast is striking in terms of the effort and priority business and employer lobby groups exert when it comes to the implementation of the RM1,500 minimum wage.

The resistance to why business interest and lobby groups have on the new minimum wage is understandable. After all, it is the raison d'être of such organisations and they do convey, from their side only, why the move is detrimental to the businesses and industries they represent.

Any move to increase the minimum wage is an increase in cost for businesses. Unless that is matched by an increase in prices, margins and profitability of businesses will be affected. Hence, it is easy to parrot why such a move is bad for businesses as it will most likely see a decrease in earnings for companies.

But generalising why it is detrimental also should be delved with greater depth in their argument. Sometimes as a percentage of cost, not all businesses have a debilitating wage structure where even a smidgen increase will send profits tumbling.

There is also the argument of revenue per employee. The electrical and electronics sector has been booming and revenue per employee is large. Hundreds of thousands, if not more per employee, and there is doubt whether any employee on the production lines of such a lucrative industry is working for less than the minimum wage. If they are, they should ask for a raise.

Then there are the plantation companies with revenue and profit that run into the billions of ringgit. Their argument in needing foreign workers to avoid the waste from foregone revenue from the unharvested fresh fruit bunches prevents the impetus for structural labour change and automation in the industry.

Then there is urban migration. More than 70% of Malaysians live in cities and towns and good luck trying to live in Kuala Lumpur on RM1,500 a month. The urban poverty line is double that amount.

There are other examples where a hike in wages has to be matched by productivity gains but then there is also the flipside argument that Malaysia's wages have been artificially depressed because of low wages and from the huge influx of cheap and unskilled foreign labour.

Wage share of GDP in Malaysia is still below 40% and for a country that has an aspiration of wanting to be a high income nation, the resistance towards implementing a minimum wage that is still below the household poverty line is pathetic.

Also with wages still deplorably low among large swathes of society, and with inflation eating away at purchasing power, denying a fair wage for Malaysians at the lowest end is a disservice to the people of the country.

Without higher wages, there is no upward pressure on wages at the bottom to rise and business to use more automation. The lack of higher wages will prevent the collection of future higher taxes for the government. And higher wages is not a problem. Just look at Singapore. It is doing alright paying the high wages over time that many of the population enjoy today.