Will a Minimum Wage Bankrupt Malaysia?
Slug: Malaysia minimum wage Reporter: Clarence Chua Date: 18/05/2012 INTRO: For the irst time in history! Malaysia has set a minimum wage " e#pecte$ to %ene it &'2 million wor(ers in the country' )t was announce$ earlier this month an$ was cele%rate$ %y Malaysian wor(ers! especially those on low wages in rural areas' *ut some 80+ o these in$ustries coul$ go out o %usiness un$er the new salary structure' )s Malaysia in $anger o going %an(rupt, Clarence Chua has more' TEXT: -enny Fransesca! who is in her &0s! struggle$ or years to ma(e en$s meet e.en though she wor(e$ ull time at a ast oo$ restaurant in Sarawa(! east Malaysia' -enny was $oing her legal stu$ies part time an$ now has a /o% in human resources' *ut she says the con$itions or uns(ille$ wor(ers remain the same' -enny clip 1 0 emale/1nglish2//: 3) you are an uns(ille$ wor(er! the pay is .ery low in Sarawa(' 1.en i you wor( with one o the ast oo$ restaurants they pay you less than & ringgit an hour you (now' 4hat is a%out only 500 ringgit a month! that6s may%e a%out 150 7S $ollars or a month' Some amilies /ust cannot sur.i.e' 4his was a ew years ago %ut ) $on6t thin( the situation has change$ .ery much' 8ages ha.e not gone up %ecause many are hiring cheap oreign la%ours'9 *ut things are a%out to change' 1arlier this month :rime Minister ;a/i% Ra<a( announce$ the go.ernment woul$ en orce a minimum wage " a%out &00 7S $ollars in :eninsular Malaysia an$ 2=0 7S $ollars in 1ast Malaysia' >s yet there is no in$ication as to when it will come into orce' *ut once a $ate is announce$! most companies will %e re?uire$ to pay the minimum wage within si# months' 4his will apply to %oth pu%lic an$ pri.ate sectors'
4he news has small an$ me$ium in$ustries worrie$ that the pay rises coul$ result in millions o /o% losses' Shamsu$$in *ar$an is the e#ecuti.e $irector o the Malaysian 1mployers Fe$eration' @e e#plains why some smaller companies may su er' Sham clip 1 0male/1nglish2//: 3)n the Malaysian conte#t most o them are not price i#ers! they are price ta(ers' 4heir clients are %asically the ones who i# the price or them' 4hey are not a%le to pass the cost to their clients' 4heir margin o pro it is not .ery high' For them to increase the wages %y 80+ is going to %e a %ig challenge'9 Shamsu$$in agrees the pay rise is %ene icial to Malaysians in the long run' *ut he thin(s employers shoul$ %e gi.en more time an$ le#i%ility to implement the policy' Sham clip 2 0male/1nglish2//: 3) the go.ernment gi.es the employers something li(e three years to implement the policy! we can say that irst year we a%sor% &0+ o the cost! secon$ year we a%sor% another &0+ an$ in the ourth year we go ull swing! %ut that (in$ o proposal was not accepte$'9 4he Malaysian 4ra$e 7nion Congress or M47C has %een pushing or a minimum wage or more than a $eca$e' >lthough they eel that 500 7S $ollars woul$ %e a airer amount or wor(ers! ha.ing a minimum wage at all is a %ig step orwar$' A' Ra/ase(aran is a mem%er o the 8age Council! an$ also M47C6s ormer secretary general' @e stresse$ that there shoul$ %e no more $elays in implementing the minimum wage' Ra/a clip 1 BMale! 1nglishC: 34he whole thing a%out this $iscussion has %een going on or the last two years' So they ha$ the i$ea' 4o say once it is announce$ an$ then it must %e gi.en two years an$ three years! it is not a air re?uest' ) there are companies an$ employers who are una%le to pay! they woul$ ha.e to close $own! so %e it' Dou shoul$ not %e thin(ing a%out $oing %usiness! ma(ing pro it %y e#ploiting wor(ers %y paying low wages' 8e %elie.e that %y raising the rate! more locals will ta(e up the /o%! so that way you re$uce the $epen$ency on oreign wor(ers9' Many %elie.e the pay rise is $esigne$ to appeal to wor(ers! as Malaysians go to the polls later this year' >n election also means the go.ernment will spen$ more money'
8ith this mi# o unemployment an$ increase$ spen$ing! ormer prime minister Mahathir Mohama$ warne$ that Malaysia may ace a Aree( economic trage$y o its own' *ut :ro essor -ayapalan Easipillai rom Monash 7ni.ersity Malaysia *usiness School %elie.es that ?uestions surroun$ing the minimum wage are in late$' -aya clip 1 0male/1nglish2//: 3Minimum wages will not lea$ to surging unemployment %ecause the la%our mar(et itsel is acing an acute shortage o la%our' 4here woul$ %e a $ownwar$ a$/ustment o %ene its pro.i$e$ %y employers' For e#ample! less holi$ays! lower health %ene its an$ wor(ers will ha.e to wor( longer hours' 4he ?uestion o %an(ruptcy is ar etche$' ) $on6t really see that happening %ecause Malaysia is ortunate to ha.ing commo$ities etc FF petroleum! oil palm an$ the last thing that coul$ happen is to repatriate the oreign la%our'9 *ut he agrees the go.ernment shoul$ cur% o.erspen$ing an$ ocus on long term initiati.es such as e$ucation! rather than cash han$outs' -aya clip 2 0male/1nglish2//: 3) you ta(e 100 thousan$ employees an$ use the money to gi.e them some goo$ e$ucation the latter woul$ %e %etter rom an economic perspecti.e %ecause you will see greater yiel$s coming up'9 4his is Clarence Chua in Euala Gumpur or >sia Calling'
