KUALA LUMPUR, Aug 24 — The Federation of Malaysian Manufacturers (FMM) has rejected a proposal by the Malaysian Trades Union Congress (MTUC) to raise the national minimum wage from RM1,700 to RM3,100, cautioning that an 82.4 per cent surge is detached from prevailing economic realities.
FMM president Jacob Lee Chor Kok said that while the federation supports higher wages as Malaysia strives for high-income status, an abrupt RM1,400 increase in a single revision remains unprecedented. Such an adjustment, he stressed, cannot occur without weighing productivity gains, employer affordability, export competitiveness, inflation, and the ripple effects across entire company pay scales.
The pushback follows remarks on Sunday by MTUC secretary-general Kamarul Baharin Mansor, who framed RM3,100 as a necessary "living wage" benchmark. Kamarul argued against views that statutory reviews should not automatically trigger rate hikes, calling that position dismissive of low-income earners stuck at the baseline. He noted that the RM3,100 threshold reflects escalating costs for food, housing, and transport, citing instances of decade-long employees still earning RM1,700 due to rigid pay structures.
Under the National Wages Consultative Council (NWCC) Act, the next mandatory statutory wage review is slated for February 2027. The current RM1,700 threshold took effect in February 2025 and became mandatory across all employer categories in August 2025.
FMM pointed out that statutory minimum wage revisions since 2013 have always been gradual, rising incrementally from RM900 and RM800 in 2013 to RM1,700 in 2025. With enterprises still adapting to the latest rate, the federation cautioned that raising the baseline to RM3,100 would place it uncomfortably close to Malaysia's formal sector median wage of RM3,167 recorded in December 2025.
Such wage compression would compel employers to lift pay scales for supervisors, technicians, and skilled staff to maintain internal pay differentials, driving total operational payrolls far beyond the direct cost of minimum-wage adjustments. FMM warned this burden would fall hardest on small and medium enterprises (SMEs) and labour-intensive manufacturers, raising the risk of business closures, operational relocations, and reduced entry-level hiring.
Highlighting regional dynamics, FMM warned that a RM3,100 threshold would widen the gap between Malaysia and competing Asean manufacturing hubs. Minimum monthly wages currently range from roughly RM570 to RM820 in Vietnam, RM1,080 to RM1,280 in Thailand, RM560 to RM1,450 across Indonesian provinces, and around RM1,300 in Metro Manila. Widening this divide without equal productivity gains risks dampening Malaysia's industrial edge.
FMM urged that all wage revisions remain anchored within the tripartite NWCC framework, relying on empirical data including productivity indices, cost of living, sector-specific health, and employer balance sheets. Any upcoming adjustment must remain moderate, predictable, and paired with ample notice.
The federation also called on the government to widen fiscal support for SMEs in Budget 2027 through competitive tax structures and expanded incentives for automation, digitalisation, and upskilling to drive a "virtuous cycle" of sustainable wage growth.
"The distinction between a statutory minimum wage, which provides a basic wage floor, and the broader aspiration for a living wage must be properly recognised," Lee said, adding that the sustainable path to better pay runs through productivity, skills and business growth rather than a single large increase in the statutory floor.
