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Business groups urge Putrajaya to defer minimum wage hike amid cost pressures
A group of business associations today urged Putrajaya to defer any plan to increase the statutory minimum wage, citing economic uncertainties and rising operating costs.
In a joint statement, the six organisations said the government should review the timing of any increase, given the pressures currently facing businesses, particularly small and medium-sized enterprises and local retailers.
"The associations recognise the importance of improving workers’ incomes.
"However...
A group of business associations today urged Putrajaya to defer any plan to increase the statutory minimum wage, citing economic uncertainties and rising operating costs.
In a joint statement, the six organisations said the government should review the timing of any increase, given the pressures currently facing businesses, particularly small and medium-sized enterprises and local retailers.
"The associations recognise the importance of improving workers’ incomes.
"However, businesses, particularly SMEs and local retailers, are currently facing significant pressures from rising operating, logistics, energy, rental, inventory, and labour costs, as well as increasing competition from international brands," they said.
They added that the ongoing conflict in the Middle East was creating further uncertainty over oil prices, transportation, and logistics costs, while adding inflationary pressure across the supply chain.
The statement was signed by the Bumiputra Retailers Organization, Malaysia Retailers Association, Malaysia Retail Chain Association, Majlis Tindakan Ekonomi Melayu, Malaysia Shopping Malls Association, and Federation of Sundry Goods Merchants Associations of Malaysia.
The appeal came days after former finance minister Lim Guan Eng said the government was expected to announce an increase in the RM1,700 minimum wage when Budget 2027 is tabled.
However, Entrepreneur Development and Cooperatives Minister Steven Sim said the cabinet had decided to exempt micro, small, and medium enterprises from the new minimum wage increase, for now.
READ MORE: Cabinet exempts MSMEs from new minimum wage hike, for now
Hike could fuel inflation
The groups also responded to a proposal by the Malaysian Trades Union Congress (MTUC) to raise the minimum wage from RM1,700 to RM3,100.
They said the proposed increase would amount to an 82.4 percent rise, which could further erode business margins and place additional pressure on companies already facing challenging operating conditions.
The additional costs could ultimately be passed on to consumers through higher prices, further adding to existing inflationary pressures, they said.
"The associations therefore appeal to the government to hold any proposed increase at this juncture and allow businesses more time to navigate the current economic uncertainties.
"In particular, the associations believe it would be prudent to allow the current geopolitical situation to stabilise and energy prices to return towards more sustainable levels, around US$70 per barrel, before imposing a significant additional cost burden on businesses."
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As if the “leader” is going to listen being a populist politician.
The government should NOT dictate minimum wages without addressing minimum productivity + performance expectations. You cannot regulate the cost of labour while leaving businesses to bear all the risks.
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