Friday, March 24

Sheda against proposal of raising minimum wage level


Augustine Wong Chung Ho

KUCHING (Feb 7): Sarawak Housing and Real Estate Developers Association (Sheda) is against the suggestion of increasing the minimum wage level in the country.

In pointing this out, its president Augustine Wong Chung Ho said based on past experiences, raising the minimum wage had proven to cause prices of goods to spike.

“Thus, raising the minimum wage with the hope of it being able to increase the spending power of workers and stimulate the economy, might give the opposite effect,” he said in a statement.

Wong opined that the lower and middle-income households tended to spend a larger percentage of their incomes on consumable goods.

Another reason why Sheda was against the suggestion was that it could also negatively impact employment levels, he added.

“The negative of higher minimum wage could only be offset by the increase in productivity by the workers, or having companies trim down their manpower.

“Some employers are forced to pay more in wages and consequently, they would end up hiring fewer workers, which would eventually lead to higher unemployment rate.

“I think the workers who, perhaps, are willing to work for lower wages could be denied of job opportunities as a result of the government-mandated minimum wage policy.”

The policymakers, stressed Wong, should instead examine the underlining economic issues, such as how to cut down the costs of doing business, by reducing the bureaucratic red tapes, increasing efficiency and promoting productivity – all set to ensure that Malaysia would remain competitive globally.

He opined that the minimum-wage increase would only result in another round of inflation, where minimum wage earners would lose their jobs as the cost of living would continue to increase.