KUALA LUMPUR: The proposed raise in minimum wage from RM1,500 to RM1,700 effective February 1, 2025, is anticipated to significantly enhance living conditions for many.
According to economic analyst Assoc Prof Dr Ahmed Razman Abdul Latiff, this increase, announced by Prime Minister Datuk Seri Anwar Ibrahim during the Budget 2025 session, could lead to improved purchasing power for workers, stimulating a more vibrant economy.
“Raising the minimum wage allows people to purchase more nutritious food, secure better housing, and have the opportunity to save and invest,” he said in an interview with Bernama.
This change is also expected to benefit retailers, as consumers will likely have more disposable income.
During the Budget 2025 announcement on Friday (Oct 18), Anwar, who is also the Finance Minister, indicated that the RM1,700 minimum wage enforcement will be delayed for employers with fewer than five employees until August 1, 2025.
Meanwhile, financial expert Prof Datuk Dr Nik Maheran Nik Muhammad indicated that the increase could help narrow the income gap between low and high-income individuals, thus fostering social well-being.
“Implementing a higher minimum wage is a constructive move, as it has the potential to improve the quality of life and purchasing power of citizens, thus promoting economic growth.”
“Workers will be better able to afford essential items such as food, housing, and education, which will in turn increase demand for various goods and services,” he added.
He also suggested that the wage hike could motivate workers to enhance their productivity as they will feel more appreciated and motivated to work harder.
However, Dr Nik Maheran, who is with Universiti Malaysia Kelantan, cautioned that small and medium industries (SMIs) may face difficulties in meeting the increased wage demands.
“The government must ensure there are adjustments in other policies, like taxation and incentives, to counterbalance any negative repercussions from the wage increase.”
“In a turbulent economic environment, a higher minimum wage could pose risks if it is not accompanied by sustained economic growth,” he concluded. – Bernama
