Minister: Raising minimum wage was right thing to do


KUALA LUMPUR: Raising the minimum wage to RM1,500 was the right thing to do as it gave more benefits to the rakyat, says Datuk Seri M. Saravanan.

While much has been done by the government to help businesses during the pandemic, the Human Resources Minister said the time has come to improve workers’ livelihood.

“The government has spent almost RM24bil to help businesses and industries, such as wage subsidies and hiring incentives.

“We spent and helped 300,000 companies from folding. We have done all sorts to help businesses.

“So it’s time for us to defend the workers,” he said at a press conference at the HRD Corp headquarters here yesterday.

Saravanan’s comments came amid continuous calls for the government to defer the minimum wage implementation, citing the challenging economic climate and cash flow constraints during the recovery from the pandemic.

When asked, Saravanan said the RM300 increase in the minimum wage makes a lot of difference for workers.

He also said that such an increment should not be a problem to most employers as “the economy is doing better than expected”.

“Look at the unemployment rate, it has declined to 3.9%. This is simply because of mismatch, and people wanting to pick and choose, and so forth. Overall, the economy is doing well. I don’t see any problem.

“The requirement for foreign workers is almost about 800,000 now. The economy is booming,” he said, adding that the wage increase also pumped in more money into the market to stimulate a quicker recovery.

He also said the increase was a small amount for businesses that are doing reasonably well in recovery, and that the enforcement across all sectors would start after Jan 1 next year.

When contacted, Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Koong Lin Loong said most businesses still faced cash flow issues, as they have used up their emergency funds during the pandemic.

“Footfalls have increased in the past six months for various reasons, but things are slowing down again after the festive seasons and reopening of borders.

“The global economy is still full of uncertainties,” he said, adding that it is not all that rosy for businesses as they eye recovery.

While businesses often employ more than one worker, Koong said the RM300 increase in the minimum wage could have a huge impact on operating costs that could lead to a domino effect in costs.

Koong, who is also ACCCIM’s SME committee chairman, added that businesses struggled with the average collection period in sales, which was often longer than their monthly commitments.

He said businesses have been calling for a deferment or a gradual increase of the minimum wage to ease their cash flow constraints.

The Minimum Wages Order 2022 was gazetted on April 27, and came into effect on May 1.

Since May 1, employers who have five or more workers had to increase workers’ minimum wage of either RM1,100 or RM1,200 to RM1,500.

Companies that hired less than five workers have until Dec 31 to implement the change.

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