IPOH, Nov 4 — Human Resources Minister M. Kulasegaran today urged employers to focus on the “big picture” rather than fret over how much the hike in minimum wage for all workers will cost them.
He said that if companies embraced Industry 4.0, which seeks to advance the production of goods through automation and data exchanges, matters such as minimum wage would become minor.
“Minimum wage is just a small section of the big picture,” he told reporters at Perkeso’s Deepavali open house at Ipoh Town Hall here.
Kulasegaran was asked to respond to disgruntlement from the Malaysian Employers Federation (MEF) over the government’s Budget 2019 announcement that minimum wage will be raised to RM1,100 monthly.
MEF executive director Datuk Shamsuddin Bardan claimed last Friday that the move would only benefit the 1.8 million foreign workers in Malaysia, signalling an outflow of money.
Kulasegaran said Shamsuddin’s argument was flawed, adding that foreigners only made up 15 per cent of workers nationwide.
“When it was RM1,050, no such argument was taken,” the minister pointed out.
He acknowledged that foreign workers would repatriate most of their income to their home country, but added that some of their earnings would still be spent locally.
“When you earn RM1,050, you do not take out all the money. Some money will be spent here,” Kulasegaran said.
He also emphasised that the government had consulted all groups prior to announcing the floor wage increase and most agreed the sum was fair.
“All parties were consulted prior to this. Sometimes the government has to make bold decisions and this was one of the issues that the government felt it was overdue, hence the increase,” he said.
He pointed out that the ruling Pakatan Harapan's election manifesto aims to raise minimum wage to RM1,500.
“We need to see as we become a more developed and have efficient economy, good salaries being paid is a criterion.
“Many asked why many Malaysians are working in Singapore? It is for the higher income,” he said.
Kulasegaran also said the labour market would unlikely be impacted by the government’s move to reduce employers’ contribution to the Employees Provident Fund in its efforts to encourage continued work for Malaysians aged 60 and above.
“We will amend the Employment Act to regenerate and re-energise it. The amendment will give empowerment to those above 60 to come back to work and enjoy benefits.
“As it is, the law is curtailing as if one is not important after they reach 60 years. We want to make it current so those above 60 years can be part and parcel of the working population,” he said.
He said the government is looking at increasing the retirement age beyond 60.
“The prime minister had asked if the retirement age should be increased. I think there is no retirement age. We all have to work to become active,” Kulasegaran said.
* A previous version of this story contained an error which has since been corrected.