KUALA LUMPUR (Feb 1): The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said it is time to consider formulating different minimum wages based on states and local conditions, instead of relying on a single national minimum wage rate that doesn't account for regional differences in cost of living, economic development and labour market conditions.

This echoes the Federation of Malaysian Manufacturers' (FMM) sentiment a day earlier, which argued that the “one-size fits all” approach under the single national minimum wage is not appropriate, given the economic disparity between the less developed and developed states.

The continued implementation of this blanket minimum wage at increasingly higher rates might have an uneven impact across states and industries, the FMM had said, citing varying economic conditions and costs of living between states and regions.

Echoing the FMM's sentiments, the ACCCIM, which acts as a unified voice for the Chinese business community in the country since it was founded in 1921, raised its concern that the blanket approach would result in businesses, especially micro, small and medium businesses in less developed states, struggling to cope with higher operating costs, given the current challenging environment.  

While it is understandable that the minimum wage be raised given the current state of cost-of-living conditions and inflation, the ACCCIM said a set of regional minimum wages that takes into account socio-economic and demographic differences would be a more effective approach. This would allow for a more balanced approach, reflecting the cost of living, economic development, and labour market conditions specific to each region, said ACCCIM president Datuk Ng Yih Pyng.

Ng also flagged that the new national minimum wage — rising from RM1,500 to RM1,700 from Saturday and potentially benefiting 4.37 million workers — may result in "potential pass-through effects, resulting in higher prices of goods and prices".

"We hope that businesses would be able to partially absorb increases in cost to ensure no significant increases in the prices of good and services", and that "an increase in the minimum wage must be matched with a corresponding rise in productivity growth through upskilling and reskilling to maintain a low cost per unit of output produced".

The ACCCIM also called on the government to carefully manage the proposed implementation of a multi-tiered levy, especially for small and medium enterprises, and to reconsider the mandatory contribution to the Employees Provident Fund (EPF) for non-citizen workers, given increasing business costs.

"The ACCCIM urges the government to continue supporting businesses in the adoption of technological, digitalisation and automation, as well as implementing upskilling and reskilling programmes for a future-proof manpower," Ng added.

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