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Wage hike boosts growth

15 Jan 2020 / 18:31 H.

THE RM100 minimum wage hike to RM1,200 in 56 towns and cities is reasonable.

It reflects the reality of workers struggling with the higher cost of living in major cities and towns.

It should not cause any significant impact on the bottom line of employers. The Human Resources Ministry’s policy measure lines up with the administration’s mandate of greater inclusiveness and accountability.

Also, a wage hike will increase purchasing power, thus boosting economic growth.

A higher minimum wage can help to reduce reliance on foreign labour and encourage local workers to fill vacancies.

The wages to GDP ratios of higher performing economies, namely Singapore with 43%, Taiwan 46.2%, South Korea 43.7% and Japan 51.9%; compared with Malaysia’s 35% shows that our wages have remained stagnant.

Higher wages for workers boosts our consumer market as household consumption is the largest component of aggregate demand at 50-60% for Malaysia.

Sze Loong Steve Ngeow

Kajang

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