Sector-based minimum wage not viable, says chamber
KOTA KINABALU: Sectoralbased minimum wage may discourage job seekers from working in sectors that pay less, said Kota Kinabalu Chinese Chamber of Commerce and Industry (KKCCCI) president Datuk Michael Lui.
For instance, he said people might not want to work in factories that pay only RM900 compared to other sectors with higher salaries. “Sectoralbased minimum wage is not a viable measure,” he said when commenting on Human Resource Minister M. Kulasegaran’s recent announcement on replacing the standardized minimum pay of RM1,100 nationwide with different minimum salaries by sectors.
Furthermore, Lui said the government should have engaged with leaders of industries, chambers of commerce and trade associations to discuss the proposal for sectoral-based minimum wage last year rather than attempting to remedy the situation after employers complained about their predicaments caused by the increase of minimum wage to RM1,100 across the country beginning this year.
“It is confusing for employers to switch to different minimum wages by sectors because we have started implemented the RM1,100 minimum pay.”
He said the study on sectoralbased minimum wage should have been done in May last year with the change of government, rather than looking at a new mechanism when complaints arose now.
“Decision makers ought to do their homework and consult the stakeholders, including chambers of commerce and trade associations, because their decisions have a big impact on the country and society.”
Lui said many employers, both in Kota Kinabalu and smaller townships, were adversely affected when the minimum wage was raised to RM1,100 this year from previously RM920 in Sabah and Sarawak and RM1,000 in Peninsular Malaysia, to the point where businesses had undergone retrenchment or were on the verge of closing down.
“I believe many individuals have gone jobless, especially those without skills.”
He said people from villages were having difficulty finding jobs because they had no education qualification or skills as employers were now more selective in hiring workers to commensurate with the higher minimum wage.
“Employees who are spared from retrenchment are required to increase their efficiency and improve work attitude.”
He added foreign investors would also consider other countries such as Indonesia and Thailand where labour costs were lower with the increasing minimum wage in Malaysia.
Federation of Sabah Industries (FSI) president Datuk Chong Hon Len said implementation of the proposed sectoral-based minimum wage would involve a complex mechanism.
“At the moment, there is no mechanism for sectoral-based minimum wage yet.
“We believe the mechanism for implementing this will be rather complex,” he said.
Nonetheless, Chong said the government must engage stakeholders from various industry sectors before rolling out the new minimum wage.
“In the context of Sabah, I hope the government will engage with Sabah Employers Association (SEA) which represents broader sectors,” he said.
SEA said on Tuesday that the proposed setting of minimum wage based on sectors is a step backward.