Sanaa:Malaysia's minimum wage might see an increase to RM1,900-RM2,000, but it should be introduced gradually and tailored to specific sectors and regions to mitigate the impact on micro, small, and medium enterprises (MSMEs), according to an economist.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Mohd Afzanizam Abdul Rashid, emphasized the need for a targeted approach due to the varying wage structures, skill levels of workers, and operating costs across different industries. The labor market conditions also differ significantly between urban and rural areas.
The current minimum wage in Malaysia stands at RM1,700 per month, a rise from RM900 in 2012, having been increased gradually over the years. The last adjustment occurred about two years ago, and Mohd Afzanizam suggested it might be time for another increase to RM1,900 or RM2,000. He made these remarks following Bank Muamalat's Corporate Economic Forum 2026.
The minimum wage aims to establish a baseline for workers' pay, as relying solely on market forces might not yield efficient outcomes. However, the uniform application of the current RM1,700 rate across industries and states could exert varying degrees of pressure on employers, particularly affecting MSMEs.
Mohd Afzanizam proposed that a more appropriate minimum wage level could be determined on an industry-specific basis. Such an approach might garner more support from businesses, especially MSMEs. He suggested that the implementation begin with key sectors contributing significantly to the gross domestic product, such as agriculture, mining, manufacturing, and services.
He also highlighted the importance of balancing the interests of workers and employers to ensure the policy remains fair and sustainable. While higher minimum wages are generally welcomed by workers, rising labor costs could strain business operations, particularly for MSMEs. A sector- and state-based strategy could more accurately reflect labor market differences, making a higher minimum wage more manageable for employers.