Thorough Study Essential, Says Sarawak Chamber of Commerce and Industry
KUCHING: The Sarawak Chamber of Commerce and Industry (SCCI) has expressed agreement with the Sarawak government on the necessity of a comprehensive study before adjusting the minimum wage in Malaysia. The SCCI’s position aligns with Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg’s recent response to the United Nations Children’s Fund (UNICEF) recommendation to set the minimum wage at RM2,102 per month.
Support for Premier’s Cautious Approach
The SCCI fully supports Premier Abang Johari’s call for the federal government to undertake a proper assessment of the affordability and potential inflationary effects before implementing UNICEF’s suggested wage increase. “The Chamber agrees with the Premier that the federal government should conduct a proper study on the affordability and threat of inflation before considering UNICEF’s recommendation,” the SCCI stated to the New Sarawak Tribune.
Implications of UNICEF’s Proposal
UNICEF recently proposed increasing Malaysia’s minimum wage from RM1,500 to RM2,102, citing factors such as the cost of living, poverty line income, and productivity. This proposal has sparked a debate on the potential economic impacts of such an increase.
Last Sunday (May 19), Premier Abang Johari emphasized that the federal government, including Bank Negara Malaysia (BNM) and the Ministry of Finance, must evaluate the effects of this proposed increase on the market’s money flow.
Balancing Wage Increases with Inflation
Abang Johari acknowledged that higher wages could boost local consumption and stimulate the economy but warned about the risk of inflation. “If wages increase, local consumption will increase, which will further stimulate the economy. However, the only threat is inflation,” he noted.
The Premier stressed the importance of controlling wage increases to prevent runaway inflation. “We need to control wage increases with inflation; we also want to avoid sudden increases in prices. If our inflation rises, then there is no benefit to raising salaries, so our economic policy must be balanced,” he added.
As the Minister of Finance and New Economy, Abang Johari underscored the need for mechanisms to manage inflation effectively. “When we raise wages, we don’t want to raise wages without increasing purchasing power. There is no benefit in that,” he concluded.