KOTA KINABALU: Small and medium enterprises (SMEs), which make up 95 percent of the industries in Sabah, will invariably be affected by the minimum wage policy.
Federation of Sabah Manufacturers (FSM) president Datuk Seri Panglima Wong Khen Thau said the idea of the minimum wage policy was to benefit the employees, however, the employers’ perspective must also be looked into.
He said industries do not deny that employees must earn a decent salary to have a decent living standard. But when the industries are not able to absorb the cost of implementing the minimum wage, would the government be able to step in to assist the industries for a period of time and not at the expense of consumers? he enquired.
In the Malaysian context, Wong said employers in Sabah were complaining because of gap between the previous average salary and the minimum wage was far wider here than that in Sarawak and Peninsular Malaysia.
In Peninsular Malaysia, the average monthly wage was RM1,131, hence the RM900 minimum wage there was actually below average. In Sarawak, the average wage was RM728, and the RM800 minimum wage was only slightly above that figure.
In Sabah, the average monthly wage was RM577 and the difference of more than RM200 was too big a gap, Wong said.
“We are not objecting to the RM800 minimum wage policy, but how many employers can sustain that?” he asked.
Wong pointed out that the minimum wage policy would not have an impact on major hotels or big companies as they were already paying their employees more than RM1,000 a month.
The policy would affect the small and medium industries (SMIs), SMEs, sundry shops and coffee shops, which make up more than 95 per cent of the industries in Sabah, he said. He warned that businesses would start to feel the impact in July this year.
On ways to overcome the impact of the policy, Wong said there were no easy solutions.
The government could come in and enforce the policy, asking people not to buy from profiteers, or setting up Kedai Rakyat to sell goods for the people, although Wong was not agreeable that the government should actually come into the market to do business.
On the other hand, the government could revise the policy or have another policy to help companies that suffer, he said.
For example, exemption from minimum wage policy or subsidy for small enterprises over a period of time.
A good policy should be a policy that include consultations from the people on the ground, Wong said.
Now that the minimum wage policy is in place, what Wong feared most has happened, that is the prices of products have started to increase.
“Business people are simple, they find ways to survive. In order to survive, the small players who have little profit margins have to pass down the cost to consumers. This would defeat the whole purpose of the minimum wage policy,” he said.
“High income does not equate to high standard of living. For the same amount of money, people could buy less because the price has gone up,” Wong said.
The minimum wage policy would also trigger a chain reaction on the salaries of employees on all levels. If the minimum pay is RM800, Wong said, supervisors or managers could not be paid RM850 anymore.
“If managers or supervisors get RM850, the next level also has to be upscaled,” he explained.
Wong stressed that people do deserve a decent living because when people cannot survive, they would not work and would return to their villages. However, government policies must be a win-win situation to all and hoped that the relevant authorities could work out on the issues.