KUALA LUMPUR, March 15 — Small and Medium Enterprises Association (Samenta) Malaysia has urged the government to focus on upskilling Malaysians for higher paying jobs, instead of giving in to the frequent demands for a higher minimum wage.
Samenta national president Datuk William Ng said that the government should focus on attracting high-value industries that offer high-paying jobs and ensure that Malaysians are trained and reskilled for these jobs.
“In Penang and nearby Kulim alone, over 50,000 vacancies for engineers and technical remain unfilled, even though the industry is offering between RM3,500 and RM6,000 monthly salary for them.
“This is despite the best efforts of our public and private educational institutions to produce these skilled workers,” he said in a statement.
Ng pointed out that the industry has been consistently increasing salaries for workers even before the establishment of the minimum wage system.
“In the year 2010, the median salary for Malaysians was RM1,500, and by 2023, this number jumped to RM2,600 – a cumulative 73 per cent jump.
“Unfortunately, our proximity to Singapore and the weakening of the ringgit resulted in many of our trained and highly skilled workers being poached by our neighbour.
“The same RM1,500 in 2010 will get you S$635 but by 2023, that RM2,600 is only worth S$765 or a mere 20 per cent cumulative increment when in reality, the industry has steadily increased pay by a total of 73 per cent,” he explained.
Ng stressed that mandating a minimum wage is neither the most efficient nor the most effective way to increase the salary of workers.
“It is meant to be used sparingly, with the aim to raise the income for the lowest income earners.
“When done without a corresponding increment in productivity or business margin, it will hurt the increment and promotion prospects of more productive workers and distort the labour market as businesses are forced to reduce jobs,” he said.
He also said that many small and medium enterprises are already paying far above the current minimum wage.
“The Malaysian labour market is also highly efficient and employers who underpay will see themselves out of business.
“Any increment in minimum wage will not only affect the lowest income earners, but will have a cascading effect on salaries across the board — an unnecessary risk when the market is already reacting efficiently to the supply and demand of labour,” he said.
He suggested that businesses should consider implementing the proposed Progressive Wage Model that can align salary increment with productivity and skills as it would be a win-win for businesses and employees.
Ng further added that the job market also has changed significantly in post Covid-19 times.
“The gig economy is now the norm, with one out of four Malaysians working in the gig economy, while another one out of four having a gig job on top of their day job.
“Our definition of job, workplace, and even wages are outdated. In other words, the minimum wage system is an outdated solution to an outdated problem,” he said.
