Wong in a press conference divulging the MICCI’s proposal on minimum wage in Sabah.
KOTA KINABALU: Minimum wage in Sabah needs to be reviewed in line with the Pakatan Harapan government’s manifesto to increase the minimum wage rate from RM920 to RM1,500.
Malaysian International Chamber of Commerce and Industry (MICCI) Sabah branch chairman Datuk Seri Panglima Wong Khen Thau said the minimum wage should be re-evaluated in two tiers in the case of Sabah, as East Malaysian companies are not as capable to sustain the higher rate, compared to those in West Malaysia.
“For the first tier, we propose that the minimum wage be increased to RM1,100 with RM100 subsidised by the government to be paid directly to employees, in essence, local workers. This is for SPM holders with no further qualifications.
“The second tier is for graduates with at least a diploma or recognised technical training, as well as SPM holders with a minimum of five years’ working experience in the industry. The rate we propose for this tier is RM1,500 with RM250 subsidised by the government.
“By doing this, we hope it will encourage students to further their studies after SPM or at least obtain certification from training institutes. This in turn will develop a more skilled workforce.
“As for the government subsidy, it may not be needed after a term of five years, for example, once the industry improves,” he explained.
Wong added that aside from producing quality workforce, the proposed two-tier minimum wage for Sabah would also provide higher pay for the workforce and achieve the government’s initial proposal and manifesto, creating a “three-win” situation.
He reasoned that a lower minimum wage rate is necessary as cost of doing business in East Malaysia is higher compared to West Malaysia, due to reasons such as logistics costs resulting in higher input costs.
Industries in Sabah believe that increasing the minimum wage from RM920 to RM1,500 would create cost push inflation which could further increase the cost of doing business here, he said.