Raising the floor for all wage earners

A group of high risk workers at factory area in Pasir Gudang, Johor. Some employers say the move to raise the minimum wage has come at the wrong time. – The Malaysian Insider pic by Seth Akmal, February 27, 2016.The move to raise the minimum wage in July has upset some employers, who argue that the timing is not right because the stuttering economy is hurting business, according to the Edge weekly in its latest edition.

The magazine’s Yen Ne Foo wrote that those who favour it say employers should not resist the new rate, which could make a difference to the lower-income group.

The Edge said that passing on the burden of services to customers was no novelty – teller machines had replaced bank officers, airlines had swapped travel agents for booking websites and self-operated laundry shops were taking over traditionally manned ones.

It said doubters of the self-service culture can be directed to the long queues at the payment counters at Ikea stores, a Swedish firm selling self-assembled furniture.

However, it said not all businesses can reduce staff cost simply by imposing a cost-saving, do-it-yourself (DIY) philosophy on customers.

By the same token, not all customers are willing to shoulder the weight of services which they deem they have already paid for, it said.

The weekly said that was partly why fretting over the rising cost of labour was such a persistent ailment among business owners.

It said the latest complaint among jittery employers, already preoccupied with the weak business environment, is the government’s decision to raise Malaysia’s minimum wage.

Based on Budget 2016 announced by Prime Minister Datuk Seri Najib Razak, the minimum wage would be increased from RM900 to RM1,000 a month for Peninsular Malaysia and from RM800 to RM920 for Sabah, Sarawak and the Federal Territory of Labuan for all sectors except domestic work in July 2016, it said.

The Edge said this was the first increase of the legal wage floor since the minimum wage policy was implemented in January 2013.

It said trade union groups consider the hike long overdue because under the Minimum Wage Order 2012, the rate should have been reviewed every two years and an increase (if any) announced in 2015.

Even then, the Malaysian Employers Federation (MEF) has led the call for the government to reconsider the timing of the wage hike, saying that the move inappropriately burdens the employer.

Many other industry groups and trade associations polled by The Edge share the same view.

Citing MEF executive director Datuk Shamsuddin Bardan the magazine said employers’ reluctance to fork out more for wages at this juncture stems from Malaysia’s stuttering economy.

In 2015, businesses were hard hit by domestic fiscal reforms and what policymakers call “external headwinds”.

Domestically, consumers are confronted with the rapidly rising cost of living, spurred on by the implementation of the goods and services tax and the government’s subsidy rationalisation scheme.

For the complete stories on raising the minimum wage, get a copy of the latest edition of the Edge for the week of February 29 – March 6 available at newsstands now. – The Edge Markets, February 27, 2016.