Citing failed prophecy, SMEs reject MEF’s latest claim of wage floor calamity

KUALA LUMPUR, May 6 ― Small and medium businesses have questioned the validity of the Malaysian Employers’ Federation (MEF) claim that 30,000 people will lose their jobs when the new minimum wage is increased in July.

SME Association of Malaysia president Michael Kang pointed out that MEF’s 2012 claim that the previous minimum wage policy would lead to the closure of 200,000 small businesses had not come true.

“(I) do not agree. I also want to know where the figure come from. On what basis? I do not agree with the figure as well,” Kang told Malay Mail Online.

“(The rates) should be realistic at current economic conditions. Minimum wage is just a guideline. As you know, local staff already earning more than RM1,000, so minimum wage will not affect local staff,” he added.

Kang said that the impact of the new rates ― RM1,000 monthly for peninsular workers and RM920 monthly for those in Sabah, Sarawak and Labuan ― will probably affect small businesses that rely heavily on foreign workers, but assured that most of them will not be closing down any time soon.

This week, state news agency Bernama reported MEF executive director Datuk Shamsuddin Bardan as saying that 30,000 people may lose their jobs once the Minimum Wage Order 2016 (MWO 2016) is enforced on July 1.

In 2012, news portal The Malaysian Insider reported Shamsuddin as claiming that the introduction of the minimum wage then ― RM900 monthly for peninsular workers and RM800 a month for those in East Malaysia and Labuan ― would jeopardise 4 million jobs and make it difficult for 200,000 small businesses to continue operating.

Shamsuddin told Malay Mail Online recently that MEF could not validate their 2012 claim as it was unable to obtain data.

“We also did not follow up on the subject matter, so there’s no real evidence on the impact of that particular move. No, unfortunately, we were not able to get the data,” he said.

Shamsuddin said he based his latest claim on some feedback from employers, but did not elaborate.

Datuk Seri Najib Razak announced when tabling Budget 2016 that the minimum wage would rise to RM1,000 in the peninsula and RM920 in Sabah, Sarawak and Labuan, up from RM900 and RM800 in 2013.