Kuala Lumpur:The Malaysian government's decision to increase the minimum wage from RM1,700 to RM2,000 and to set a starting salary of RM2,500 for semi-skilled workers and graduates is anticipated to enhance purchasing power and improve the nation’s wage structure.
According to BERNAMA News Agency, the initiatives, announced by Prime Minister Datuk Seri Anwar Ibrahim in Budget 2027, aim to align worker remuneration with their qualifications and skills, which experts believe will drive productivity and economic growth.
Dr. Mohd Rahim Khamis from Universiti Teknologi MARA highlighted that paying salaries in accordance with skills and qualifications boosts productivity and contributes to economic progress. He noted that the RM2,500 starting salary could narrow the gap between the income of graduates and semi-skilled workers, encouraging sustained national development contributions from the local workforce.
Prof Emeritus Dr Barjoyai Bardai of Malaysia University of Science and Technology pointed out that the 17.6 percent increase in minimum wage could stimulate domestic demand, particularly in sectors like food, retail, transport, and services, as low-income earners spend a significant portion of their income on essentials.
He emphasized that for employers, increasing productivity through technology and training is essential, and support such as financing for digitalization and retraining will be crucial to help micro, small, and medium enterprises (MSMEs) adapt to higher labor costs.
Assoc Prof Dr Nor Wahiza Abdul Wahat from Universiti Putra Malaysia stated that the wage increase would improve both the financial and psychological wellbeing of workers, potentially reducing turnover rates in high-turnover sectors.
UNI Malaysia Labour Centre president Datuk Mohamed Shafie BP Mammal stressed the need for comprehensive studies to ensure worker protection and the capacity of employers, particularly MSMEs, to implement the new wage policy. He advocated for tripartite negotiations between the government, employers, and trade unions to balance worker welfare with economic development needs.
Prime Minister Anwar, while presenting the budget themed "Reaching for the Skies, While Anchored on Our Values," announced that the minimum wage hike, effective June 2027, is expected to benefit over four million workers, with exemptions for MSMEs with annual sales below RM50 million to allow them time to adjust their business models.