KUALA LUMPUR: The increase in the minimum wage from RM1,500 per month to RM1,700 effective Feb 1, 2025, can boost people's quality of life from various aspects.
Economic analyst Assoc Prof Dr Ahmed Razman Abdul Latiff said the increase, announced by Prime Minister Datuk Seri Anwar Ibrahim when tabling Budget 2025, could, among others, enable workers to enjoy higher purchasing power, which can go on to contribute to a more vibrant economy.
"Raising the minimum wage to a higher level will indirectly improve people's quality of life by enabling them to purchase more nutritious food, rent more comfortable accommodation as well as save and invest,” he said when contacted by Bernama.
He added that this would also benefit traders as Malaysians would be able to spend more.
Anwar, also the Finance Minister, who tabled Budget 2025 on Friday (Oct 18), said the government had also decided to delay the enforcement of the RM1,700 minimum wage for employers with fewer than five employees for a period of six months, to Aug 1, 2025.
Meanwhile, financial and entrepreneurship expert Prof Datuk Dr Nik Maheran Nik Muhammad said the increase in minimum wage could narrow the income gap between the low and high-income groups, thus encouraging better social well-being.
"The implementation of a higher minimum wage is a good move because it has the potential to help improve the people's livelihoods and purchasing power, which will stimulate the country's economic growth.
"Workers can afford better necessities like food, shelter and education as well as increase their purchasing power, which will then drive demand for goods and services,” he said.
He added that it would also indirectly encourage workers to be more productive as they will feel more appreciated and be more motivated to work harder.
However, Dr Nik Maheran, who is now with Universiti Malaysia Kelantan, said that small and medium industries (SMI) could face difficulties meeting the much higher cost of wages following the increase in minimum wage.
"As such, the government must ensure there are adjustments in other policies, such as tax and incentives, to balance the negative effects that may arise from the increase in minimum wages.
"In an unstable economic situation, the implementation of a higher minimum wage could be risky if not accompanied by continuous economic growth,” he said. - Bernama
