Minimum wages for Sabahan in private sector : Latest News Update

Numerous trade and commerce organisations in the State are calling on the Government to implement the recently announced RM800 minimum wage in phases, if not review it altogether. Federation of Sabah Manufacturers President Datuk Wong Khen Thau, who represented them, said in principle they do not object to the minimum pay announcement, but hoped it would be implemented in a way that would bring about a win-win situation to employers and employees.

He said in a press conference here Thursday that it was obvious employees will always want better pay, but whether or not employers can afford to pay is another matter. "If this new announcement is carried out and enforced, there will be three scenarios which are most likely to happen and steps employers can take, the first being passing down the cost to consumers, closing shops or businesses, or finding alternatives to absorb the extra expenses.

"I would like to see what would result from the first two scenarios, because of course if prices of goods go up, it means that even with the extra amount of money earned, consumers can still only buy the same amount of goods or services. "So there is no point in the increase of the minimum wage," Wong said.

On the other hand, he said if given a gradual implementation for a period of three years, say a 15 per cent raise annually based on the current average minimum wage of RM577, the amount will reach about RM900, which is already higher than the minimum pay announced. He said the Government should be coming up with policies or systems whereby the living standard of people will increase following the increase of pay, without affecting the prices of goods and services. "We are also not happy to hear what a Federal Minister said about there being bound to be inflation and hike in prices when pays are increased. The minimum wage should not affect the employers adversely.

We know that the cost of goods, services and operational costs here are higher compared to Peninsular Malaysia, and by right we in Sabah should get more in terms of the minimum wage," Wong said. "But many people do not know that the scenario in Sabah is different because if we look at statistics given out by the Government, the current average minimum wage for the peninsula is about RM1,131, Sarawak RM738 and Sabah RM577," he stated.

The major beneficiary, he pointed out, is actually Sabah (despite the fact that there was no representative from the Sabah industry in the National Wage Consultative Council), because the minimum wage was increased from RM577 to RM800. "However, is it fair to the employers who need to bear all the higher overhead costs such as Cabotage policy, taxes and so on? Not all are able to cover these costs, especially the small and medium enterprises," he said, adding that tackling the costs of operations is actually more important now.

Adding to this, Wong said it was hard to implement the system overnight because the Government should be getting more investment into the State and reducing overhead operational costs if it really wants to improve the living standard of the people here. "And the term minimum wage is not even the total household income as perceived and misinterpreted by so many parties, including politicians. The term minimum wage is only the starting point of an employee's salary regardless his or her qualifications," he said.

More problems will arise from here in an organisation, he explained, because those who have been working longer have higher academic qualifications or higher posts will definitely want a better pay, too, if the newly employed can get RM800 as a start. "The people on the ground should be consulted before a policy is implemented, because the consultants or advisers might only be giving their views based on the book and not reality," he added.

Meanwhile, those in favour of these suggestions include the Sabah Timber Industries Association, Sabah Printers Association, Sabah Housing and Real Estate Developers Association, Cycle and Motor Parts Traders Association, Malaysian International Chamber of Commerce and Industry (Sabah), Sabah Furniture Association and the Sabah United Chinese Chamber of Commerce.