KUALA LUMPUR: The proposed increase in the minimum wage from RM1,500 to RM1,700, effective February 1, 2025, is expected to enhance various aspects of life for many citizens.
Economic analyst Assoc Prof Dr Ahmed Razman Abdul Latiff explained that this increase, revealed by Prime Minister Datuk Seri Anwar Ibrahim during the Budget 2025 announcement, could significantly empower workers by improving their purchasing power and energizing the economy.
“An elevated minimum wage allows workers to afford more nutritious meals, better living conditions, and opportunities to save and invest,” he stated during a discussion with Bernama.
He emphasized that this change would also positively impact traders as consumers would likely spend more.
During the Budget 2025 session on Friday (Oct 18), Anwar, who also holds the position of Finance Minister, announced that the enforcement of the RM1,700 minimum wage would be postponed for companies with fewer than five employees until August 1, 2025.
Additionally, financial expert Prof Datuk Dr Nik Maheran Nik Muhammad noted that the wage increase could help bridge the income gap between lower and higher-income groups, thereby fostering social well-being.
“The move to increase the minimum wage is a commendable one, as it holds the potential to enhance livelihoods and purchasing power, thereby stimulating economic growth in the country.”
“Workers will find it easier to access essential items such as food, housing, and education, resulting in heightened demand for goods and services,” he remarked.
He also added that this wage increase could encourage workers to enhance their productivity, as they will feel more appreciated and motivated to excel.
However, Dr Nik Maheran, now affiliated with Universiti Malaysia Kelantan, pointed out that small and medium-sized enterprises (SMEs) might struggle with the increased wage costs.
“The government must take measures to adjust other policies, such as tax incentives, to alleviate the potential adverse effects of the minimum wage hike.”
“In an unpredictable economic climate, raising the minimum wage could pose risks unless it is accompanied by steady economic growth,” he warned. – Bernama