KUALA LUMPUR, March 16 — A survey by the largest Chinese-based business association shows that a slight majority of small and medium enterprises (SMEs) are in favour of minimum wage.
Fifty-three per cent of SMEs surveyed by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) were agreeable to the government’s proposal to enforce the minimum wage policy to protect workers’ welfare while 47 per cent disagreed.
File photo of a farmer collecting oil palm fruits in Hulu Selangor. Many SMEs face problems in hiring workers in the agriculture, farming, timber, fishery and gardening industry. — Reuters pic
The issue of a legally mandated minimum pay has pit employees against employers, with associations representing the former saying that it needed to match the rising cost of living while employer associations say that it should be linked to productivity.
The ACCCIM survey found that new businesses under three years old were the most supportive of placing a floor to wages while businesses related to travel and entertainment and imports and exports were found to be the most opposed to it.
ACCCIM treasurer C.S. Tang was quoted in news reports as recommending that the priority should be total take-home income of workers rather than a one-size-fits-all salary figure.
“There should be classes (for different companies),” he told reporters at the third ACCCIM SME conference.
RAM Ratings chief economist Yeah Kim Leng said the findings were a welcome one.
“It’s heartening to note that a majority are agreeable to minimum wages,” he said. “This is something unexpected.”
Yeah said that if some businesses found it difficult to pay minimum wages, they might have to relook their business models.
The issue of minimum wage has also been linked to the huge influx of foreign labour, with critics contending that foreign workers tend to work for lower pay thus distorting the labour market and depressing wages.
Many businesses however counter that they are unable to find suitable local workers.
The ACCCIM study also found that just over half, or 57 per cent of SMEs, hire 100 per cent local staff.
Thirty per cent of respondents from the agriculture, timber, fishery, farming and gardening, and construction and contracting sectors however have their staff made up of more than 50 per cent foreign workers.
More than 60 per cent of the SMEs in the survey said that they face problems in hiring workers, with the most acute in the hotel industry (79 per cent), followed by agriculture, farming, timber, fishery and gardening industry (76 per cent) and manufacturing (72 per cent).
Yeah said companies would have to look at ways to raise productivity, possibly by using automation or offering higher salaries to attract more productive employees.
“It is a challenge to be welcomed to reduce reliance on cheap, foreign workers,” he said.
He noted that some sectors in Malaysia appeared to be overstaffed, for example, restaurants in Malaysia tending to employ more staff than restaurants in developed countries.
“Craftsmen and trade workers can earn as much or more than white-colllar professionals in advanced economies,” he said.
Newswire Reuters earlier this month quoted sources as saying that the Cabinet had approved a minimum wage of RM800-900 or slightly above the unofficial poverty line income of RM760.
It also said that the timing of the introduction of minimum wage appeared to be part of an effort to shore up incomes and votes ahead of widely expected general election this year.
