Govt Urged to Categorise Minimum Wages Based on Zones

The Malaysia Retailers Association (MRA) has urged the Human Resources Ministry to classify minimum wages into zones.

According to the group, many Malaysian workers have chosen to return to their hometowns where living costs are lower while simultaneously earning the same pay as city workers due to the increased national minimum wage rate.

Unfortunately, this has resulted in a labour scarcity, particularly in the Klang Valley, and "compression wage adjustments" for individuals making RM1,500 and above in the retail sector.

Consumers in Malaysia, who are already dealing with substantial inflation expenses of all kinds, are also impacted by these pressures.

 

Re-categorising consumers structure

In place of the present B40, M40, and T20 income groups, MRA President Datuk Andrew Lim Tat said the government should reclassify consumers into three groups: 

• The bottom 60% of income earners (B60), 

• the middle 20% earners (M20), and 

• the top 20% earners (T20).

MRA advised the government to provide a stimulus package to the B60, which would also help Malaysian consumers. Lim also said that the B40, M40, and T20 no longer exist.

At a recent press conference, he stated that many people suffered financial losses and dislocation over the last three to five months.

He continued by saying that the government shouldn't interfere with the mechanism of the market as supply and demand will naturally drive prices upward without it.

 

Retail sector's woes

MRA wished the government would permit the retail sector to hire foreign workers for both frontline work and office work to address Malaysia's labour shortage and high unemployment rate.

According to the government, Malaysia's unemployment rate has decreased to 4.1%. Still, the association is sceptical of the data since it might include gig workers and does not accurately reflect the country's present predicament.

The workforce expects shorter working hours, flex time, and more pay regardless of productivity, although there are many open positions but few applicants.

Therefore, any income and salary increases must be supported by equivalent increases in productivity, Lim said.

 

The weakening currency and GST

Additionally, MRA asked for Bank Negara Malaysia to address the weakening ringgit of Malaysia, which is currently at its second-lowest level since the 1997 financial crisis.

As of now, the government intends to replace the present Sales and Services Tax with the Goods and Services Tax (GST) (SST).

The MRA recommended that the GST be re-instituted in two years at a lower rate of 3%, with corresponding decreases in personal and corporate income taxes.

It argued that the GST was an effective consumption tax due to its wide base, which allowed the government to spend more on both national development and aiding underprivileged communities.

MRA planned to organise a "retail stakeholders dialogue" with the National Action Council on Cost of Living and the Domestic Trade and Consumer Affairs Ministry to address the declining ringgit and inflationary pressures.

 

Consequently, MRA asked the government to develop better programmes or schemes to support Malaysian consumers throughout this inflation period.

 

Source: The Malaysian Reserve