Small, medium industries stall minimum wage as polls loom

(The Malaysian Insider) – Putrajaya is still locked in talks with stakeholders over its first minimum wage policy after small-medium industries (SMI) warned that 80 per cent of active businesses could fold, cutting four million jobs from the labour market under a blanket floor wage.

The National Wages Consultative Council that advises the government on wage policy will meet today for further updates on a minimum wage that Datuk Seri Najib Razak was earlier slated to announce this month.

File photo of workers waiting for their transport to go to
work in Kuala Lumpur. Chinese industry associations have
called for a staggered implementation of minimum wages.
— Reuters pic

But The Malaysian Insider understands that pressure from employers has forced the federal government to come back to the table although any delay will upset trade unions who say a base wage is long overdue.

“I don’t think he can do it this month but he may do it if he wants to call elections soon,” Malaysian Employers’ Federation (MEF) executive director Shamsuddin Bardan said.

Bloomberg reported last Friday that government officials are preparing for June 3 federal polls and Najib is due to announce a minimum wage of just under RM1,000 a month to win support from low and unskilled labour that makes up 75 per cent of the workforce.

Households earning under RM1,500 per month also make up 40 per cent of the population. The prime minister remained coy last night over the election date but said he hoped for a strong margin of victory if not a two-thirds parliamentary majority.

The Malaysian Insider also learnt that the 16 mainly Chinese industry associations that called a press conference on March 6 to call for a staggered implementation of floor wages had first gone to MCA president Datuk Seri Dr Chua Soi Lek for help before lobbying Putrajaya directly.

The Barisan Nasional (BN) government, which has been unable to win back Chinese support so far, has since held several meetings with the associations which are largely made up of SMIs.

These companies, who say they make up 99 per cent of operational companies and employ 59 per cent of all workers, are mostly labour-intensive and will be hardest hit by a hike in wage bills.

They have instead asked for certain sectors and micro-enterprises to be exempted. They also want to be given anywhere between 12 and 18 months to implement a minimum wage that has been reported to be set at RM900 and RM800 for Peninsular and east Malaysia respectively.

But the Malaysian Trades Union Congress (MTUC), the umbrella body that represents 800,000 workers from 390 labour unions, insists that such demands are unreasonable as the minimum wage is reviewed every two years.

“So what’s the point? By the time they have to implement it, it’ll be under review.

“I think the PM will and has to announce it by this month. They can’t change the agreed figures,” MTUC secretary-general Abdul Halim Mansor told The Malaysian Insider.