KUCHING: Sarawak's Malaysian Trades Union Congress (MTUC) is upset business leaders in the country continue to cling to antiquated policies and myopic views in opposing the increase of minimum wage.
Its secretary Andrew Lo said it is not true that increasing minimum wage could eventually lead to higher unemployment.
He said increasing minimum wage could reduce the dependency on foreign workers, which is one of the objectives of introducing minimum wage.
He was responding to Sarawak Housing and Real Estate Developers' Association (Sheda) president Augustine Wong Chung Ho's recent statement that increasing minimum wage could eventually lead to a higher unemployment rate as some employers and companies would end up hiring fewer workers.
Wong also said based on previous experiences, minimum wage hikes have proven to cause prices of goods to rise.
However, Lo said, prices of goods have increased and inflation was at a higher level before minimum wage was introduced in 2010.
"By continuing to oppose the increase of minimum wage, Sheda is cutting its nose to spite its face. Eventually no one, except those rich business owners, would be able to purchase property," he said.
"Besides, the lower income group actually spends most of their income on consumer goods, hence, any objection to minimum wage hikes, is also reducing spending on consumable goods, therefore, affecting businesses, especially the small medium enterprises (SME)," he added.
Lo said that increasing minimum wage would benefit the country as higher wages would lead to more spending power, which will in return increase domestic demand and reduce the country's exports.
He said it will also spur productivity growth as employers have to invest in more efficient production methods instead of relying on millions of low paid workers, mostly foreigners.
"Malaysia has fallen behind Singapore, Hong Kong and Taiwan as well as South Korea mainly due to antiquated views of businesses," Lo said.
"We will soon fall behind Vietnam, Indonesia and the Philippines and we can notice that Indonesian workers are no longer coming in huge numbers and we have to resort to Bangladeshis," he added.
Last week, Human Resources Minister Datuk Seri M Saravanan said a new minimum wage of "around RM1,500 a month" is expected to be implemented before the end of this year.
He said the new rate had yet to be finalised, as the ministry was awaiting Cabinet approval.
In February 2020, Malaysia's minimum wage was raised to the current RM1,200 per month from RM1,100 per month previously.
