FMM ready to support gradual increase in minimum wage

The Federation of Malaysian Manufacturers (FMM) is ready to support a gradual increase in minimum wage rather than immediately increasing the current RM1,200 to RM1,500.

FMM president Tan Sri Soh Thian Lai also urged for a tripartite discussion which would include key stakeholders of various economic sectors to be convened immediately to deliberate on the matter.

“In the current circumstances of the Covid-19 pandemic, where business conditions remain fragile for many, it must be recognised that any increase in business cost for manufacturers would have a spiralling multiplier impact on the economy and derail business and economic recovery.

“Adjustments to wages must be done progressively and considering multi-stakeholder impact.

“Manufacturers are generally concerned about an immediate increase to RM1,500 but are receptive for a gradual increase under the current minimum wages review to a quantum to be decided by the National Wages Consultative Council (NWCC).

“We strongly feel that a more gradual increase in the minimum wage rate would still be able to address the increase in the cost of living which we are all experiencing currently as a result of the pandemic and the supply disruptions that ensued.

“In addition, employers have always maintained that any increase in the minimum wages must commensurate with an increase in productivity as any steep increase in wage costs could adversely affect the overall costs and competitiveness of businesses,” he said in a statement.

Soh said industries were still facing risks posed by the Covid-19 Omicron variant that continue to impact global supply chains and logistic connectivity.

Businesses, he said, were also forced to adapt to other cost pressures, such as rising commodity prices, energy prices, labour supply shortages, that could derail their recovery efforts.

Although neighbouring countries such as Indonesia, Cambodia and Thailand are considering adjusting minimum wage in 2022, Soh pointed out that these countries opted for gradual adjustments as well.

“Indonesia is implementing an average increase of 1.09 per cent while the review is still in progress for Thailand.

“Cambodia, which only imposes minimum wages for garment, textile and footwear industry has introduced a minimum wage adjustment around 1.04 per cent.

“It should also be noted that these countries do not have one uniform minimum wage rate instead the minimum wage rates are based on provincial locations or only imposed on certain sectors unlike Malaysia,” he said.

Soh also said he believed employers could provide annual or contractual adjustments to wages, based on business performance, if the government enforces control measures to curb an increase in costs.

Previously, the Malaysian Trades Union Congress had urged the government to raise the monthly minimum wage from RM1,200 to RM1,500 and provide a minimum monthly cost of living allowance of RM300 for all employees.

Malaysia’s minimum wage for workers was last raised from RM1,100 to RM1,200 in February 2020.

NST