A minimum wage is the minimum amount of remuneration that an employer is required to pay wage earners for the worker performed during a given period, which cannot be reduced by collective agreement or an individual contract. During the 14th general election campaign, Pakatan Harapan (PH) made 10 promises as part of their manifesto. One of them includes the implementation of the minimum monthly wage of RM1,500 will be increases gradually and to be standardize the minimum wage for the private sector across the country as of 1 January, 2019. Due to the country’s current economy, the government can only afford a RM50 increase in minimum wage for workers in the peninsula and RM130 for those in Sabah dan Sarawak. On the new government policy of the minimum wage, my critical view as a human resources manager is I would like to share my point of critical view of the advantages and disadvantages on the new government policy of the minimum wages.
The main purpose of a minimum wage is to improve the income of low-wage earner. The raising of the minimum wage, Malaysia can come out of middle-income trap. The main reason for the income gap is the median wage, which is the difference in employers’ capability and capacity in both parts of the country, to pay wages to their employees and that is the minimum income is lower in East Malaysia. The Government had to ensure the minimum wages rate is not too high to the extent of having a negative impact on the employers and the national economy while at the same time not too low to be insignificant.
To become a high-income nation with inclusiveness, wages at the bottom have to be lifted up The new minimum wage would result in the hiring of more local workers than the foreign workers. The ratio of local to foreign workers could be reduced in the future so that the local workers can contribute to the country’s economy. it is because our industries will be too dependent on foreign workers and local workers will be jobless because the government did not pay them with a high cost. Our industrialization must give the opportunity to our local workers instead of discriminating. Hiring the foreign workers will bring the benefits and also harm and threaten to our country.
The raising in the minimum wage would help stimulate the economy growth and benefit everyone else due to increased economic activity. Increasing the minimum wage significantly and regularly is an essential step towards consolidating the nation’s economic growth. In terms of raising wages, companies should be encouraged to provide skills training for employees and improve the management system to enable employees to enhance their productivity. The government could not drastically increase the minimum wage due to country’s financial standing.Businesses have to transform by moving up the value chain by investing in higher technology to increase labour productivity as well as reduce the nation’s dependence on unskilled foreign labour. The Government recognize that some Malaysian employers may face a new challenges as they adjust to the new wages policy.
For the employers, this policy should encourage them to invest in higher technology by moving up their value chain and in the long run reduce depending on forcing employees. Any drastic increase in salaries would create other problems for industries and could jeopardize the nation’s competitiveness. It is wider for the minimum wage to be raised gradually in the coming years so that employers do not close down their businesses due to the high operating costs that would lead to employee retrenchment. The best business practices would be avoiding retrenchments which might result in losing talent in an organization.
Retrenched workers will also be given help to search job, career counselling and training. The government also urged employers and traders not raise the prices of goods and services once the new minimum wage is implemented. The government is committed to fulfilling its promise within the next five years and would be continue reviewing the minimum wage every two years. The disadvantages of raising the minimum wage may be increasing in the living of cost.
The RM50 increase to the minimum pay is far too law in view of today’s cost of living. I believe that this amount of money as take-home pay to support the family, children education and the daily living expenditure is not enough for a small family to live on, especially in the big cities. The government need to take into consideration the cost of living and operation cost that has to be borne by employers, and the plea of people living and working in Sabah, Sarawak, and Labuan to increase minimum wage and help them better deal with the rising cost of living. In conclusion, I believe the implementation of the minimum monthly wage for Malaysia will result in the improve income of low-wage earner, hiring more local workers than the foreign workers, stimulate national economic growth, create other problems for industries and could jeopardize the nation’s competitiveness and increasing the living of cost. I believe on the new government policy of the minimum wages can bring our country step forward as a developing country in the future through inclusive and sustainable growth.
