KUALA LUMPUR (Sept 28): The Federation of Malaysian Manufacturing (FMM) has called for any review of the minimum wage to be negotiated through the National Wages Consultative Council’s tripartite process, with factors including productivity, cost of living and employers’ capacity to pay taken into account.
The statement follows Prime Minister Datuk Seri Anwar Ibrahim’s comments that the government will announce more decisive measures on wages in Budget 2027, to be tabled on Oct 9.
FMM president Jacob Lee Chor Kok said employers recognise the need for better wages, but the ability to absorb higher payroll costs varies between companies.
“Many larger firms already pay above the statutory minimum wage, while smaller manufacturers and labour-intensive businesses generally have less room to absorb a sudden increase in payroll costs,” said Lee in the statement.
Profits of a small number of highly successful corporations should not be taken as representative of the wider business community, with Lee noting that micro, small and medium enterprises (MSMEs) accounted for 96.1% of business establishments in 2024, based on figures from SME Corporation Malaysia.
FMM said many larger companies already pay above the statutory minimum wage, while smaller manufacturers and labour-intensive businesses generally have less room to absorb a sudden increase in payroll costs.
The manufacturing association said a steep and uniform adjustment could also affect wages above the minimum level, as employers may need to adjust the pay of experienced operators, technicians and supervisors to maintain differences based on skills, experience and responsibilities.
The group said it supports wage growth linked to improvements in worker productivity, skills and business performance.
It said manufacturers also need to invest in machinery, technology, training and production capacity to generate productivity gains while managing costs for materials, energy, freight and financing.
FMM said companies with strong and sustained profits should consider whether employees are sharing in those gains through better wages, bonuses, skills development and opportunities for career progression.
At the same time, it said a minimum wage increase that exceeds a company’s ability to absorb higher payroll costs could lead some manufacturers to review prices, hiring or production plans, although their ability to pass on higher costs would be constrained by competition and customer contracts.
“Negotiation among workers, employers and government is essential to reaching a minimum wage that improves incomes, recognises workers’ contributions and allows businesses to remain viable,” said FMM.