Samat Ali
MIRI (Feb 13): Local business owners are warning that implementation of the RM1,500 minimum wage could affect post Covid-19 economic recovery and may hurt many of those already hit hard by the pandemic.
Sarawak Bumiputra Entrepreneurs Chamber (DUBS) Miri chairman Samat Ali has criticised the announcement by Human Resource Minister Datuk Seri M. Saravanan on Feb 5, saying that increasing the minimum wage would cause further financial strain among employers in the nation.
“It is not the time for this since businesses is only beginning to recover their loss after being forced to closed due to movement control order caused by the Covid-19 pandemic.
“Instead, the government should have think of a more holistic way of helping to rebuild our country’s economy, without burdening the employers while at the same time, able to assist the workers.
“Hiring workers do not only cover their basic wage, but also contributing to their Social Security Organisation (Socso) and Employees Provident Fund (EPF). Not to mention all the operating costs that has inflated due to the pandemic. The domino effect is becoming unbearable,” he told The Borneo Post yesterday.
DUBS Miri’s Young Entrepreneurs Chamber (Dewan Muda) head Hafidz Rohani also opposes raising the minimum wage, and suggested that the government revise the decision so as to allow local businesses catch their breath amidst the pandemic.
Hafidz Rohani
“The increment of 25 percent from the RM1,200 minimum wage is really not ideal, in view of the current economic situation. We need to look at the real picture of what is happening now. Price increases for inputs on almost everything, causes margin to shrink to the extent where there are businesses suffering losses every day, but had to persevere to continue surviving,” said the entrepreneur.
Hafidz added that, as an employer, he did his best giving between three to seven percent of increment to his employees based on their work performance, saying that most employers in the country do value their workers with salary increment.
“The government should play the significant role of stabilizing the country’s economy ensuring that the economic recovery is heading the right direction and that the people are benefiting from it. We also like this to be postponed to not hurt the people and businesses,” said Hafidz.
Another food entrepreneur, Fatimah Abdul Hamid said her factory actually needs more workers under the low-skilled and low entry level. However, if the government chose to enforce the RM1,500 minimum wage, it will financially burden her business and it may not able to weather through this pandemic.
“The RM1,500 minimum wage could probably be implemented by (a) bigger company, but it will certainly impact small and medium enterprises (SMEs). The government must revise the decision before things got out of hand,” she warned.
DUBS secretary Abdul Razak Joni said increasing minimum wage to RM1,500 would mean that the prices of goods and services will also be increase, as businesses need to balance their cost and expenses.
“In the end, it is the consumers who are hurt the most because they are the one paying for it,” he said adding that he hoped the government could expedite the process of foreign labour as the latter are much cheaper than local work force.