SBF: Raising minimum wage untimely

KUCHING: It is untimely to revise the national minimum wage to RM1,200 per month in light of the deteriorating economy and the bleak outlook for next year, says Sarawak Business Federation (SBF) secretary general Jonathan Chai.

He said it is fortunate that the revised rate would not cover the rural and coastal towns in Sarawak, but this would still have negative impact on the business operations in towns like Kota Samarahan, Bintulu, Sibu, Miri and even Kuching.

“I am of the opinion that the timing of this revision is not right in view of the deteriorating economy and the bleak outlook for next year.

“As disclosed by our chief minister last week, the unemployment rate among youths in Sarawak is at worrying level, and any revision of minimum wage at this time would not help to ease the problems.

“I have previously highlighted that the standardised national minimum wage has failed to take into account the disparity in the costs of living between different parts of the country,” he said when contacted yesterday to comment on the new policy effective Jan 1 next year.

Citing an example, Chai said with the minimum wage of RM1,200 per month, employers could hardly look for someone to work for them in the Klang Valley but this would not be the case elsewhere, like Kuching.

He said the minimum salary data from the Department of Statistics indicated that the ability of employers in Sarawak and Sabah to pay higher salary ‘is lesser compared to Peninsula’.

He said the same statistics also ‘indirectly indicated that higher minimum wage would affect the employability of the local job seekers’.

“While it is a noble intention of the government ‘to put an end to the persistent discrimination against Sabah and Sarawak by raising the minimum wage there to be equal to that of the Peninsula’, we must acknowledge there are basic issues to be addressed, especially the cost of transportation, lack of connectivity, and the lagging in development of infrastructure.”

Malaysian Trade Union Congress (MTUC) Sarawak, on the other hand, welcomed the new policy with open arms.

Its secretary Andrew Lo said higher wages would help the country cut down on its depedency on foreign labour.

“We welcome the move as the first of many increase. Higher wages will spur higher productivity and encourage employers to invest in innovation and more efficient manpower in planning and reducingthe number of foreign workers,” he said.

On Wednesday, the federal government announced raising the minimum monthly wage to RM1,200 in 57 cities and municipal councils while the minimum wage remains at RM1,100 a month for the rest of the country.

The new minimum wage would take effect from Jan 1, 2020 for all employers and the order would be gazetted soon in line with the cabinet decision, said Ministry of Resource Ministry.

The cities in Sarawak listed are North Kuching, South Kuching, Miri, Padawan, Sibu, Kota Samarahan and Bintulu.