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Why minimum wage of RM1.5k is good for the economy
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ADUN SPEAKS |  Our economy has many problems. One of them is our dependency on migrant workers. To some employers, the excuse is that Malaysians do not want to do the 3D jobs - dirty, dangerous and difficult/demeaning. Hence, their argument for hiring migrant workers.

However, the BN government has allowed millions of migrant workers to be brought in to take up those jobs, at a very low wage that Malaysians refused. So it is not that Malaysians reject such jobs, the problem is of exploitation.

Making migrant workers do the work for wages that no Malaysians would is not only exploitative and unethical, it is forcibly suppressing the growth of wages for the entire workforce, especially low wage earning Malaysians.

As the wages of workers stagnate, they are contributing less to growing consumer spending. The implementation of GST and stagnating wages has caused low-income workers to get less value for the same amount of money.

Consumer growth stagnates as well. This is the key cause for our small and medium enterprises (SMEs) feeling the pinch.

In fact, to encourage Malaysians to take up these 3D jobs, there must be better wages to make the jobs more attractive for Malaysians. This has shown to work by one of Penang’s Municipal Councils.

This is why a minimum wage of RM1,500 is not only good for workers, it is also in the interest of business owners and employers. It will not hurt jobs and businesses. 

Some employers use scaremongering tactics to silence workers’ demand for fairer pay by asking employees to choose between low or lowered wages, and not being employed at all.

However, the facts paint a very different picture.

Here are the reasons why minimum wage of RM1,500 is good for our economy:

  1. A minimum wage increase during periods of economic turmoil does not have a negative impact on job growth. On the other hand, an increase in minimum wage provides for positive skew on job growth as compared to economies that didn’t.
     
  2. Putting more money in the people pockets with a higher minimum wage will enable minimum wage earners to contribute towards consumer spending. This will provide a jumpstart to reawaken a cycle of growth in consumer spending.
     
  3. An increase in minimum wage will translate into increasing demand for goods and services. Businesses will, in turn, gain more from a reinvigorated market and more competitive prices of goods due to a higher demand. 

Lest we forget, a minimum wage should be the minimum pay a worker needs to live on, which means, it is inextricably linked to living costs.

When the rise in living costs is not complemented with a realistic rise in wages for workers, there is all the more reason to raise the minimum wage.


HOWARD LEE CHUAN HOW is the state assemblyperson for Pasir Pinji.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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