KUALA LUMPUR: The head of a business group has described as “too harsh” a call by a Sarawak union for businesses that could not afford to pay the new minimum wage of RM1,700 to close shop.
William Ng, chairman of the Small and Medium Enterprises Association (Samenta) said the statement issued by the Sarawak Bank Employees’ Union on Wednesday amounted to chest thumping.
“We must understand that SMEs include many small family businesses that are barely breaking even. We must not go so far as to advocate that those who can’t afford to pay more should close shop,” he told FMT.
“We are in this together, in the spirit of tripartism – and as such, threats and chest thumping are unnecessary,” said Ng, who previously warned that raising the minimum wage could affect SMEs.
He also claimed that some 156,663 SMEs closed shop following the steep 25% increment in minimum wage in 2022.
The Sarawak union had also accused groups such as the SME association of “fear mongering and incoherent rhetoric” about widespread business closures due to the increase in minimum wage.
Ng agreed that more must be done to raise the low wages but said “sweeping regulations” like increasing the minimum wage will result in further wage compression for the M40.
It would also disproportionately affect businesses in lower income states, including Sabah and Sarawak, he said.
“Once this minimum wage is enforced and it results in job loss, who will be accountable for that?” he said.
Bersatu calls for moratorium
Separately, outgoing Bersatu Youth chief Wan Ahmad Fayhsal Wan Ahmad Kamal reiterated the call by opposition leader Hamzah Zainudin to postpone the enforcement of the RM1,700 new minimum wage, which takes effect in February 2025.
He said that the Malay business community took issue with the minimum wage proposed by the government.
“We call on the government to halt the implementation with at least a one year moratorium. Let there be more consultations between SMEs and the government,” he said at a forum on Thursday.
He added that the policy must be made sector-based rather than enforcing a blanket rule.
Source: https://www.freemalaysiatoday.com/category/nation/2024/10/28/many-small-family-businesses-barely-breaking-even-says-trade-group/