Ringgit notes are seen in this photo taken in Kuala Lumpur August 4, 2019. — Picture by Ahmad Zamzahuri
She pointed to the work of economist David Card whose research into minimum wage and the effects of immigration on labour costs made him one of three recipients of the 2021 Nobel Prize for Economics. “Interestingly, the spokesman for the MEF also mentioned that Malaysian workers are paid far higher than minimum wage rates, so the hike could potentially reduce an over-reliance on foreign labour, which has been a significant vulnerability for some firms, particularly during the pandemic,” she added.
“The government should strengthen distribution capacities and make grants available for micro, small and medium enterprises especially to digitise and automate wherever needed. This is how they can stay competitive in a post-pandemic era,” she said. MTUC secretary Kamarul Baharin Mansor also called for the wage increase, citing the continuous rise in the cost of goods, which he said was uncontrolled.
He added that not all businesses recover the same way and many are still struggling with the lack of manpower, early closing times, as well as loss of customers, as their business model does not work anymore in the pandemic era. Juita concurred with Lee, adding that Bank Negara Malaysia will introduce measures in the second half of the year to curb inflation and further price increases.“There should be a concerted effort to deploy needed policies to ensure minimum wage can increase while curbing higher inflation and prices. Other measures like subsidies and set price ceilings are already used to curb the increase in the price of goods and services,” she said.
Source: Financial Digest (financialdigest.net)