PETALING JAYA: Efforts to raise wages should be accompanied by measures to improve productivity, skills and business growth, particularly among small and medium enterprises (SMEs), says MCA vice-president Datuk Seri Dr Wee Jeck Seng.
He said SMEs were already facing rising costs and could come under greater pressure if policies focused only on raising wages and increasing government allocations without improving business productivity, orders, access to financing and market competitiveness.
“Wage increases have to be accompanied by improvements in productivity, skills training and employees’ career development,” he said in a statement on Thursday (Sept 24).
Wee said the Progressive Wage Policy should uphold the principle of “productivity for wages”, with support for businesses to train employees, adopt automation and digital tools, and expand into export markets.
He said the government should also consider measures to improve productivity through manufacturing upgrades, logistics, the digital economy, high-value agriculture, tourism, TVET and technology-driven SMEs.
He said this was particularly important as SMEs made up 96.2% of businesses in Malaysia in 2025, totalling 1.29 million establishments and contributing 39.7% of the country’s gross domestic product.
“Many are not large corporations earning huge profits, but restaurants, small manufacturing factories, retailers, family businesses and service providers.
“If a small business earns only a few thousand ringgit in profit each month, but is required to raise wages, shoulder higher compliance costs and bear various new expenses, it cannot simply conjure up more money,” he said.
He said the possible impact could include higher prices, fewer new hires, shorter operating hours, greater use of automation or even business closures.
Wee said the government’s push to raise incomes and narrow wage gaps was not misplaced, but businesses also needed more opportunities to grow.
“Workers need better incomes, but businesses must also have business opportunities.
“Without viable businesses, there are no wages. If businesses collapse, even a higher minimum wage means little to those who have lost their jobs,” he said.
Wee also said the government’s decision to increase development resources for Kedah, Kelantan, Perlis, Terengganu, Sabah and Sarawak should not be measured solely by how much had been spent.
Instead, the focus should be on whether the spending generated private investment, high-value industries and better-paying jobs.
