30,000 Workers May Lose Their Jobs If Minimum Wage In Malaysia To Be Raised In July?

More bad news than good?

Cover image via Blogger

While Malaysians celebrated Labour Day over the long weekend, there was more good news as the minimum wage in Malaysia will be raised come 1 July

Image via Reuters

The Minimum Wage Order 2016 (MWO 2016) will take effect on July 1 this year for all employers regardless of the number of employees under the organisation or company.

Human Resources Minister Datuk Seri Richard Riot Jaem said the Act, which was gazetted on April 29, covers all employees in the private sector except domestic helpers as per the PGM 2012.

Under the PGM 2016, the minimum wage set by for Peninsula is RM1,000 per month or RM4.81 per hour, and RM920 per month or RM4.42 per hour for Sabah, Sarawak and Labuan.

However, the Malaysian Employers Federation (MEF) has urged the government to postpone the implementation of MWO 2016 as thousands of Malaysians may be jobless

Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan

Image via MTUC

Malaysian Employers Federation (MEF) executive director, Datuk Shamsuddin Bardan said about 30,000 employees, especially at lower level, may be retrenched if MWO 2016 was enforced.

"Employers have to bear high cost if MWO 2016 is enforced and will retrench workers before July to reduce operating cost and retrenchment benefits," he told Bernama.

Shamsuddin said the workers to be retrenched come from sectors such as oil and gas, banking and finance, insurance and retail.

"This situation is worrying and the government should help local companies to survive during difficult times and to retain employees."

Additionally, the ex-president of SME Association of Malaysia has warned that consumers may end up having to pay more for goods and services as a result of the minimum wage raise

Former SME Association of Malaysia president Teh Kee Sin was reported as saying that business owners and employers will be burdened by the new minimum wage, and they will likely shift the increased operational cost directly to buyers.

“Consumers would definitely have to pay more. In the end, it will also be hard for those earning the RM1,000 minimum wage,” he was quoted as saying by The Star.

He also reportedly said that the government should look into training and skills development as the minimum salary should not be seen as a temporary step to boost the country into a high-income nation status by 2020.

The Malaysian Trades Union Congress (MTUC), however, has refuted these claims because the salary increase was not that high

Malaysian Trades Union Congress (MTUC) secretary-general N Gopal Kishnam

Image via MTUC

"The probability of retrenchment or even closure of business because of rising labour costs is small. Employers have to resort to such action only when the economic situation really deteriorated," Malaysian Trades Union Congress (MTUC) secretary-general N Gopal Kishnam said.

Gopal said the increase in minimum wage was a bonus to the Malaysian workers who are facing an uncertain global economic situation.

"In addition to help reduce the burden borne by them, MTUC hopes the salary increase will encourage the workers to be more productive," he added.

Speaking of which, local professionals are willing to work in '3D' (dirty, difficult and dangerous) sectors abroad to earn a better living:

Last February, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, challenged Malaysian youths to take up the '3D' (dirty, difficult and dangerous) jobs that are usually aimed at migrant workers: