KUALA LUMPUR: An increase in the minimum wage to RM1,500 is likely to leave a price effect, that is the price of goods will increase, said Universiti Malaysia Sarawak (Unimas) Honorary Professor Datuk Dr Madeline Berma.
She said the increase in minimum wage could also cause a substitution effect because when the increase in the price of the goods was absorbed, often employers or operators would pass on additional costs to consumers.
"So there are those who do not enjoy the increase in minimum wage as macro-wise the price of goods goes up.
"For me, the issue is not only managing the minimum wage increase because what is affected is the rakyat as a whole. The issue of chickens and eggs and the supply chain is worth discussing.
"Another effect is that some employers say this is the best time to replace workers with machines or new technology instead of having to bear the burden of rising labour wages," she said during the Ruang Bicara programme entitled 'Cost of Living Rises, Salary Remains the Same... Until When? - Malaysian workers' on Bernama TV last night.
However, she said that it is true in economic terms that putting money in the hands of a consumer or individual will generate the economy because the income will be spent.
"As I had mentioned before, the target has to be right because many in the informal sector are in the low-income group," she said.
She said it is not time for a minimum wage increase of RM300 because many employers are currently 'surviving' on government subsidies. And the subsidies may end soon. I'm more worried about the timing because we need the micro, small, medium and large scale businesses to recover first.
"Should we add higher labour costs to the cost of capital, not to mention the supply chain that is blocked? I feel we should first let businesses breathe, I don't think they said totally 10 years not to raise the minimum wage.
"For me, now may not be the right time," she added.
-- BERNAMA
Bernama
Sat Feb 12 2022
Minimum wage could also cause a substitution effect when the increase in the price of the goods was absorbed. - BERNAMA photo
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.
NFOF will be operational in November 2024 with funding of RM1 bil
PM Anwar Ibrahim said NFOF will support venture capital fund managers to invest in startup companies with RM300 million set aside for 2025.
Minimum wage to increase to RM1,700 effective Feb 1, 2025
The Progressive Wage Policy would be fully enforced next year with an allocation of RM200 million, benefiting 50,000 workers.
Bursa Malaysia ends higher on Budget 2025 optimism
The benchmark index, which opened 1.85 points higher at 1,643.29, moved between 1,641.71 and 1,649.31 throughout the trading session.
Five important aspects relating to people’s lives in Budget 2025 - PM
The focus is on driving the MADANI Economy, speeding reforms, cutting red tape, raising wages, and tackling the cost of living.
Economic outlook: Govt plans to leverage, expand existing city transit system
The expansion aims to provide a more efficient and reliable public transportation network, reduce congestion, and improve accessibility.
Economic outlook: Budget 2025 to lay foundation for a digital-driven economy
The report said Budget 2025 will entail efforts to position Kuala Lumpur as a top 20 global startup hub by 2030 through the KL20 initiative.
Economic outlook: Corruption and lack of accountability hinder economic progress
Special Cabinet Committee on National governance is established to curb corruption, law reforms to modernise outdate regulations, MoF said.
National Wages Consultative Council will be strengthened
The govt will also incentivise hiring women returning from career breaks, offer job matching and improve care services facilities.
Economic outlook: Ensuring 11 years of compulsory education for all children
Budget 2025 will continue prioritising upskilling and retraining initiatives to equip workers with the latest skill sets necessary.
Consolidated public sector projected to record lower surplus of RM41.7 bil 2024
The MoF said the consolidated general government revenue is estimated to increase slightly to RM384.7 billion in 2024.
PM announces substantial Budget 2025 hastening Malaysia to become Asian economic powerhouse
Datuk Seri Anwar Ibrahim said it would create jobs and also tackle financial leakages to enhance public spending efficiency.