ALOR STAR: The Kedah Chinese Chamber of Commerce and Industry (Kedah CCCI) is ready to support its members and engage constructively with stakeholders amid a potential minimum wage increase this year.
Its president, Ang Saik Chong, said the prospect of a significant increase in minimum wage, as advocated by economists and consumer groups, presents a complex challenge for businesses in the state.
He said the chamber recognised the importance of ensuring equitable wages for workers while weighing the potential impact on enterprises, especially small and medium enterprises (SMEs) which are crucial to the state's economy.
"While demands for a 40 per cent increase to RM2,100 per month signal a commitment to addressing income inequality and improving the quality of life for workers, businesses in Kedah are understandably concerned about the impact on their operations.
"SMEs, in particular, face the prospect of higher operating costs, which could put a strain on their financial viability and market competitiveness," Ang said in a statement today.
Any adjustment to the minimum wage must be carefully managed to support the workers' welfare without jeopardising the sustainability of businesses, he added.
"As discussions unfold, it is crucial for the government to engage in meaningful consultations with businesses to understand their concerns and explore solutions that strike a balance between the interests of workers and businesses."
He warned that a substantial increase in minimum wage could raise concern among foreign investors regarding cost, potentially affecting the state's draw as an investment destination.
"Another aspect to consider is, foreign workers often remit a portion of their income back to their home countries.
"A significant minimum wage increase could lead to a higher outflow of money from the local economy, impacting overall financial flows."
Ang said it was important to note that many technical personnel and skilled workers in Kedah already earned salaries above the proposed minimum wage.
"For these professionals, the focus may shift towards ensuring their wages remain competitive and reflect their expertise and contributions to businesses.
"Employers will need to consider how to maintain salary differentials and reward technical skills appropriately in light of any minimum wage adjustments," he added.
He said businesses were also likely to adopt various strategies to mitigate the impact on their operations.
"These strategies may include a focus on productivity improvements, such as investing in technology and upskilling employees to enhance efficiency.
"Cost optimisation measures, such as reviewing expenses and streamlining processes, will also be crucial to maintain competitiveness.
Ang further commented that businesses might also need to reassess their employment policies, potentially adjusting staffing levels, working hours and employee benefits.
"Collaboration with relevant authorities to advocate for supportive measures, such as incentives or training programmes, could also help businesses navigate the challenges posed by wage increases."
On March 14, Human Resources Minister Steven Sim announced that the government would review the minimum wage this year, taking into account both employer and employee perspectives.
He said the review would be guided by the National Wages Consultative Council Act 2011.
