KOTA KINABALU, July 31 ― The Malaysian International Chamber of Commerce and Industry (MICCI) Sabah urged the government to reconsider raising the minimum wage to RM1,500 nationwide, claiming that the move will have adverse effects in the state which already suffers from a higher cost of doing business.

Its chairman, Datuk Wong Khen Thau, said the move would be too drastic for Sabah-based companies which are currently paying a minimum wage of RM920, and would have to fork out about RM330 more per employee.

"Increasing the minimum wage here may create several waves ― companies may have to close down, or cut down on workers to offset the costs. But the most likely scenario is that the added cost of business will be passed on to the end user. This will make living costs more expensive than it already is and cause the state to be less competitive,” Wong told a press conference today.

The Pakatan Harapan government, in its election manifesto had proposed the rate be increased from RM1,000 in Peninsula Malaysia and RM920 in Sabah and Sarawak to RM1,500 nationwide, within its first 100 days in government.

The RM500 increase will be borne equally by employers and the government.

Wong proposed that the government revise the current rate to RM1,100 for Sabah.

"MICCI Sabah proposes that the minimum wage be revised to RM1,100 with a government subsidy of RM100 be paid directly to employees while the company put up RM80,” he said, arguing that Sabahan companies were already burdened by higher logistics costs.

He said that to ensure productivity was increased in tandem with minimum wage, the government has to encourage school leavers, who are the biggest minimum wage recipient group, to continue studies to a minimum diploma level in order to support industries with a skilled workforce.

Wong said that studies show that only 50 per cent of school leavers in Sabah will continue their education either at tertiary level or vocational schools, while the others opt to enter the workforce because they felt the minimum wage was sufficient.

"We feel this figure is alarming and will result in an underskilled workforce that cannot support a successful economy,” said Wong.

He said that SPM school leavers who enter the work force immediately should not be eligible for a RM1,500 minimum wage salary until they have worked in the same industry for five years.

The group also proposed that that the government "legalise” illegal immigrants and stateless people in Sabah by providing a form of documentation that will allow them to find work and contribute positively to the state.

"The state government should approach the federal government to recruit illegals from Sabah to work in West Malaysia rather than recruit from Nepal and Bangladesh.

"This does not mean granting them citizenship though,” he added.

Wong also urged the new Federal government to complete projects by the previous government that would benefit Sabah, such as the Pan Borneo Highway, the Sabah International Convention Centre and upgrade the Sepangar Bay Container Port, which he said are economic game changers for the state