Tuesday, January 31, 2023

After minimum wage increase, M’sians are worried of another round of price hikes

Social NewsAfter minimum wage increase, M'sians are worried of another round of price...

On Saturday (19 March), Prime Minister Datuk Seri Ismail Sabri Yaakob has announced to increase the minimum wage from the current RM1,200 to RM1,500 and it was well-received by the public.

However, people are now worrying that the salary hike will lead to another round of price hikes as businesses take the opportunity to increase price of goods and services at will.

Source: The Star

Nonetheless, most businesses would not be bothered to give their employees a pay rise if there were no minimum wage legislation.

Following the announcement to increase the minimum salary, some businesses had objected to the proposal and claimed that it will be burdensome for some small businesses, especially when labour costs are a substantial part of their overheads.

They explained that if they try to increase prices further, they will risk losing customers, and this can result in them closing down. With this, businesses will be forced to pass on this cost to consumers.

At the end of the day, consumers would have to bear the consequences and this vicious cycle will continue.

With that, raising the minimum wage is not a sustainable solution to combat the rising cost of living.

The implementation of the RM1,500 minimum wage will begin on 1 May nationwide except for micro, small and medium enterprises (SMEs).

The minimum wage is to protect low-income employees against excessively low wages.

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