SME and retail groups urge delay to minimum wage increase
A survey of 333 businesses found 95.8% favoured postponing an immediate nationwide increase and introducing any higher wage floor in phases.
The SME Association of Malaysia and Malaysia Retail Chain Association (MRCA) urged the government on Oct 2 to hold off raising the minimum wage above RM1,700. Both groups said businesses facing difficult operating conditions need any future increase to be phased in so they can manage cash flow.
At a joint press conference, MRCA president Datuk Liew Bin pointed to cost pressures from the expanded sales and service tax, competition from Chinese e-commerce platforms and external challenges, including war.
SME Association of Malaysia national president Dr Chin Chee Seong said its survey drew responses from 333 businesses. Of those, 95.8% preferred postponement and a phased approach if the government raises the wage floor. Chin identified manufacturers as the sector most concerned.
Nearly half opposed an increase to RM2,000 from RM1,700, while 6.6% backed a level of around RM2,200. About one-fifth supported higher pay but wanted it deferred until business and economic conditions improved.
Nearly two-thirds reported worse business conditions than a year earlier; 8.4% reported improvement. About 93% expected pressure to increase pay for employees earning above the new minimum, while around three-quarters anticipated substantially higher operating costs.
Respondents wanted pay to reflect skills, productivity and employers’ financial capacity. About three-quarters sought tax relief or incentives rather than an immediate wage rise, and more than half sought reduced regulatory costs.
Chin said the government’s deferral for micro, small and medium enterprises (MSMEs) might offer limited long-term help. He also acknowledged their difficulty retaining and recruiting staff against larger employers able to meet higher wage requirements.
Entrepreneur and Cooperative Development Minister Steven Sim Chee Keong said planned support includes Progressive Wage Policy subsidies to link pay growth with productivity. Further measures to help graduates obtain suitable jobs and fair wages will be announced in Budget 2027, scheduled for Oct 9.
