Bersama warns minimum wage hike an 'attractive headline', but won't solve structural low pay

Bersama has argued that while raising the minimum wage might make for an “attractive headline” in Putrajaya’s Budget 2027, the measure alone is unlikely to solve Malaysia’s structural low-wage issues.

The party’s statement came amid debate over the government’s proposal in Budget 2027 to raise the minimum wage from RM1,700 to RM2,000 in June 2027, while temporarily exempting micro, small and medium enterprises (MSMEs) with annual sales below RM50 million.

In a joint statement today, Bersama co-leader Lee Chean Chung and spokesperson Sum Dek Joe cautioned that the measure could create unequal wage protection and loopholes, as businesses approaching the RM50 million threshold will be incentivised to split their operations to remain exempt.

“Moreover, many Malaysians earning below RM2,000 a month work in MSMEs and could miss out on the wage increase, while foreign workers employed by larger companies would benefit.

“How can a minimum wage policy leave behind the very low-paid Malaysian workers it is supposed to help?” the duo questioned.

Highlighting that Malaysia’s wage growth “remains weak” despite the government first introducing a minimum wage policy in 2013, Lee (above) and Sum attributed the matter to “wage compression.”

This, they said, stems from how real wages have failed to keep pace with productivity, while wages for skilled workers have grown more slowly than those for low-skilled workers.

“Another minimum wage increase may make for an attractive headline in the Madani government's election budget, but sustainable wage growth requires businesses to become more productive and create better-paying jobs,” they emphasised.

Alternative budget

As such, they pointed to the alternative budget presented by Bersama co-leader and former economy minister Rafizi Ramli prior to Prime Minister Anwar Ibrahim’s tabling of Budget 2027 in the Dewan Rakyat on Oct 9.

READ MORE: Bersama's Budget 2027: Not 'business as usual', and what it would do instead

Under the shadow budget, Bersama proposed an expanded Progressive Wage Policy (PWP) and a multi-tier levy to encourage businesses to raise wages while reducing their dependence on cheap and low-skilled foreign labour.

According to the 153-page document on the shadow budget, the PWP, as advocated by Bersama, provides a mechanism for the government to intervene without immediately shifting the entire cost of wage adjustments onto employers.

As part of the national wage transition programme, the government would co-fund temporary wage increases when employers raise salaries according to recommended wage levels, and workers undergo training to improve productivity.

Bersama’s budget allocated RM1.8 billion annually for five years to massively expand the PWP, with the party estimating that the policy could benefit approximately 2.5 million Malaysian workers over five years.

This is compared to just over 51,000 workers who received benefits under the existing minimum wage measures as of end-2025.

The goal, the party said, is to build a wage ladder where the minimum wage protects the lowest-paid workers, while progressive wages ensure that skills, experience, and productivity are rewarded throughout a worker's career.

Bersama also proposed automation, artificial intelligence (AI), and robotics transformation tailored to SMEs using foreign workers’ levy, so that they can be supported to hire less but pay more to individual employees.

The party’s budget outlined a tiered migrant worker levy of RM500, RM1,500, or RM3,000 a year per worker, with migrant worker quotas tied to the number of local workers employed by a firm and the wages paid to them.

Yesterday, the Government Backbenchers Club proposed that the Human Resources Ministry, in collaboration with the Economy Ministry, carry out an impact assessment six and 12 months after the implementation of the minimum wage increase.

Its chairperson Dr Zaliha Mustafa said the assessment should consider real wages after inflation, employment rates, working hours, productivity and business conditions to ensure the minimum wage hike genuinely improves workers' well-being.

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