KOTA KINABALU: Now is neither an appropriate nor the best time to raise the minimum wage for employees because employers will not be able to absorb or bear additional costs amidst the current economic uncertainty.
Kota Kinabalu Chinese Chamber of Commerce and Industry (KKCCCI) president Datuk Michael Lui said businesses were finding it harder and harder to sustain with the country’s economy badly affected by the global economic slowdown, inflation and weakening of the Malaysian ringgit.
Lui said this in response to Prime Minister Datuk Seri Najib Abdul Razak’s announcement of a rise in the minimum wage from RM900 to RM1,000 per month for employees in Peninsular Malaysia, and from RM800 to RM920 for employees in East Malaysia effective July 1, 2016 when the latter tabled Budget 2016 in Parliament on Friday.
Lui hoped that the government would consider postponing the implementation of the minimum wage increase till the global and domestic economy recovered.
“It will be a double whammy for businesses and employers if the new minimum wage rates are implemented.
“This will cause businesses that are unable to cope to shut down or resort to layoffs, which I believe is not the outcome both employers and employees want.”
Lui stressed that he was not against raising the minimum wage, but the increment should be postponed to a more appropriate time to ensure a win-win situation for both employers and employees.
He said raising the minimum wage at this time would only lead to a potential mutually destructive outcome for both employers and workers.
Lui was also puzzled as to why the increment for minimum wage was RM100 for Peninsular Malaysia and RM120 for East Malaysia.