Local workers to miss out on gains from wage hike: Employers

MALAYSIA: Only foreign workers will benefit from an increased minimum wage, the Malaysian Employers Federation (MEF) has argued in the latest counterpoint against a proposed increase in the minimum wage nationally.

MEF executive director Datuk Shamsuddin Bardan explained that this was because foreign staff — who hold many of the minimum wage roles in Malaysia — send remittances to their home countries instead of spending their salaries in Malaysia.

This. he added, meant there would not be a sizeable increased contribution toward Malaysia's economic growth.

Shamsuddin cited a 2018 study that showed around 1.8 million local employees benefitted from the minimum wage increase in that year. "At that time, we had more than two million foreign workers and those who benefited from the increase in the minimum wage were foreign workers," he said.

"Did they use their 'surplus' monies to boost the country's economy? The answer is 'no' because these foreign workers sent the money back to their home countries."

Shamsuddin says recent wage increases in both Indonesia and Cambodia were worth between 1.0 and 1.5% for the employers involved. This is much lower than the approximately 25% increase if Malaysia's minimum wage were to rise to MYR 1,500 as planned for May this year.

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