Human Resources Minister R. Ramanan says the RM2,000 minimum wage was set after careful evaluation of factors including its impact on inflation and prices.
PUTRAJAYA: The new RM2,000 minimum wage, which takes effect in 2027, was set following a careful evaluation of various factors, including its impact on inflation and the prices of goods, says Human Resources Minister Datuk Seri R. Ramanan.
He said the National Wages Consultative Council (NWCC), chaired by Tan Sri Zainal Rahim Seman, thoroughly examined the matter before submitting its findings to Prime Minister Datuk Seri Anwar Ibrahim for a final decision.
“We have calculated this very carefully. The minimum wage increase is not sudden and does not go up to the RM3,000 to RM3,500 range suggested by many experts out there.
“We didn’t go to that extent because a lot of them do not see the resulting increase in prices and inflation,” he told a press conference on the Minimum Wage Order 2027 here today.
“When we tabled this to the Cabinet and discussed it with the Prime Minister, he also needed to be convinced that this was the proper way forward before making the decision,” he added.
Ramanan said the government was implementing the policy in phases to give businesses, especially micro, small and medium enterprises (MSMEs), time to adjust their operations.
“We cannot stifle them; they need room to breathe. If we pressure every segment of the industry, inflation will definitely rise and everything will go up. Therefore, we need to implement it systematically and in phases,” he said.
Asked whether the Human Resources Ministry (KESUMA) had received complaints about the new announcement, Ramanan said it had received various views and remained open to feedback.
“There are many people out there giving their comments and opinions on what the salary should and should not be.
“However, this is carefully thought of and carefully planned. It is to make sure the economy can sustain this salary increase,” he said.
Previously, Anwar announced that the government had agreed to raise the minimum wage from RM1,700 to RM2,000 effective June 2027, which will benefit over four million workers.
He reportedly said MSMEs with sales revenue below RM50 million would be exempted from the new rate to allow them time to adjust their business models.
The government will also reform the workers’ income framework by introducing a starting minimum wage of RM2,500 a month for semi-skilled workers and graduates, Anwar added.