KUCHING, March 23 — The Sarawak Manufacturers’ Association (SMA) has proposed that the new minimum wage set for implementation on May 1 this year be a ‘guideline’ instead of a law to enable employers to raise their workers’ salary when they are able to do so.
Its president Joseph Lau said the association’s members were not against increasing the minimum wage from RM1,200 to RM1,500 but felt it was being introduced too quickly as they were still recovering from the impact of the Covid-19 pandemic.
He said the government should engage with the business sector more to gain further feedback on the matter, while noting that it might be a better option to set the minimum wage as a guideline instead of a law for the time being.
“We propose that it is set as a guideline for the companies to follow. Those who can follow, they follow, while those who can’t; they can do it another time. It will be more friendly, especially during this time.
“Business people actually know how to adjust the wages themselves, in the sense that, for example, if my factory wants to keep on running then I need to employ people, but if there is high turnover at my factory it means my wage is too low, so I will need to increase it,” he told The Borneo Post when contacted.
Lau said the association also hoped that the state government would also consider the matter carefully and help the manufacturing sector move forward in this difficult time.
“Like what our Premier had said, manufacturing is going to be one of the key roles in making Sarawak a developed region, so we have to make sure the manufacturers are surviving until the pandemic is over and productivity resumes to normal.
“We also want to be fair and once we are sure we can survive, we will try to make sure our wages are competitive for Sarawakians,” he said.
Last Saturday, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that the Cabinet had agreed to increase the minimum wage from RM1,200 to RM1,500 effective May 1.
The minimum wage was first enforced in 2013 under Minimum Wages Order 2012, which was set at RM900 then. The last revision was in 2020, when it was hiked to RM1,200 in 56 cities and towns, but remained at RM1,100 in other areas.
Lau pointed out that the RM300 hike was a ‘real jump’ for employers that comes too soon after the pandemic, and it would have repercussions on consumers.
“A lot of companies were suffering during the Covid-19 pandemic, and many manufacturers in Sarawak suffered too, and while we are starting to recover, this thing (minimum wage) comes up.
“As the minimum wage increases, it is not only an increase for the low-income workers but also the company’s human resources. Yet the productivity remains the same. This means the overall cost is going to go up, which will result in the end-product being more expensive,” he said.
Lau pointed out that when products increase in price, consumers would also suffer because they would have to pay higher prices for goods in the long run.
“The consumers also include those self-employed, farmers, and even the workers themselves. The situation will not help those who are already poor or those in the low to medium income groups,” he said.
Lau said the other concern was that in order to survive, companies might be forced to reduce their capacity.
“But the difficult scenario comes in when they cannot survive. If a company cannot survive then it may close down, and this will lead to unemployment.
“If more and more people become unemployed, it becomes another problem for the government,” he said. — Borneo Post Online
