Govt backbenchers propose six- and 12-month impact assessment on minimum wage hike

PARLIAMENT | The Government Backbenchers Club has proposed that the Human Resources Ministry, in collaboration with the Economy Ministry, carry out an impact assessment six and 12 months after the implementation of the minimum wage increase.

Its chairperson Dr Zaliha Mustafa (Harapan-Sekijang) said the assessment should consider real wages after inflation, employment rates, working hours, productivity and business conditions to ensure the minimum wage hike from RM1,700 to RM2,000 starting June 2027 genuinely improves workers' well-being.

PARLIAMENT | The Government Backbenchers Club has proposed that the Human Resources Ministry, in collaboration with the Economy Ministry, carry out an impact assessment six and 12 months after the implementation of the minimum wage increase.

Its chairperson Dr Zaliha Mustafa (Harapan-Sekijang) said the assessment should consider real wages after inflation, employment rates, working hours, productivity and business conditions to ensure the minimum wage hike from RM1,700 to RM2,000 starting June 2027 genuinely improves workers' well-being.

She said Malaysia’s employee compensation share of gross domestic product (GDP), which remains at 33.9 percent, indicates room for improvement in distributing economic returns to workers.

“This wage increase also impacts business cost structures, particularly for labour-intensive enterprises. Some employers may absorb the higher costs through profits and productivity, while others might adjust prices, working hours and hiring.

“We must also consider the risk of increased payroll costs being passed on to consumers through price adjustments for goods and services,” Zaliha said when debating the Supply Bill (Budget) 2027 in the Dewan Rakyat today.

In view of this, Zaliha proposed a targeted productivity support package offering small-scale automation assistance, digital technology adoption, and upskilling training to help enterprises boost productivity without passing the full cost increase to consumers.

She also urged the Domestic Trade and Cost of Living Ministry to step up monitoring of prices for essential goods and services before and after the new wage rate takes effect.

“If income increases by RM300 a month, we want to ensure most of that raise stays as additional purchasing power and savings for the people. If the cost of living rises significantly alongside income, the impact of the minimum wage hike will fail to achieve its true purpose,” she said.

- Bernama