The new minimum wage policy should be implemented progressively to prevent disruptions to the economy, Governor of Bank Negara Malaysia, Nor Shamsiah Mohd Yunus said.
The new minimum wage of RM1,500 will come into force on May 1, a 25% jump from the previous minimum wage of RM1,200 which was set in 2020.
The Governor also stressed the importance of getting policy reforms right, just as the economy is recovering from the Covid-19 pandemic and dealing with increasing uncertainties due to geopolitical tensions.
Under current circumstances, the implementation of the new minimum wage would need to take into account the uneven recovery across industries, she said.
“There should be a clear and transparent roadmap for all firms to plan accordingly on their road to recovery,” she said.
She stressed that a progressive implementation would be crucial to reduce disruption and inflationary pressures considering geopolitical uncertainties
“What we must do is to minimise the disruptions on this front. We should give affected firms time to adjust, and the phased approach as announced by the government would help,” she added.
BNM deputy governor, Shaik Abdul Rasheed Abdul Ghaffour also touched on the issue of minimum wage. Whilst he opined that the minimum wage as an important policy to safeguard workers’ welfare, it also helped address imbalances in bargaining power between workers and their employees. However, it was also crucial that the revised minimum wage must go hand-in-hand with other reforms.
He added that the ability to attract quality investment is vital to create more value-added and high-paying jobs, and workers have to play their parts too by upskilling i.e. to raise their productivity and adjust to the times, especially given the new opportunities in the digital and environmental, social and governance (ESG) space.