Negative Impact Of Minimum Wage In Malaysia

The report also pointed out the new wage policy will have a greater impact in sabah is set 40 4 higher than the current average salary of rm577 followed by sarawak rm800 vs. In the latest salaries wages survey report 2016 released by the department of statistics malaysia dosm the median monthly salaries and wages received by paid employees was rm1 703. California was among the first states to launch minimum wage hikes towards the living wage of 15 per hour by 2022 a 50 hike over 2012.

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The majority of surveyed economists believe a 15 00 per hour minimum wage will have negative effects on youth employment levels 83 adult employment levels 52 and the number of jobs available 76.

Negative impact of minimum wage in malaysia. Recently the states of new york and california approved bills that would increase the minimum wage to 15 an hour. A recent study by the congressional budget office entitled the effects on employment and family income of increasing the federal minimum wage was conducted to determine how increasing the. In releasing the list of 57 cities and towns that will be affected yesterday listed below the ministry of human resources mohr said in a statement that the minimum wage would remain at rm1 100 a month in areas that are not considered part of these.

It noted that the minimum wage rates payable to an employee who works in a place of employment in any city council or municipal council area would be rm5 77 an hour or rm1 200 monthly. The government has mandated that the new rm1 200 monthly minimum wage be implemented on jan 1 2020 in 57 cities and towns across malaysia. Although this may sound like good news a lot of employees are dissatisfied with the decision.

The policy sets a minimum wage of rm900 per month rm4 33 per hour for peninsular malaysia and rm800 per month. Nearly three quarters of these us based economists oppose a federal minimum wage of 15 00 per hour. Potential impact of the minimum wage policy on the malaysian economy introduction malaysia implemented a minimum wage policy on 1 january 20131 thereby joining more than 150 other countries that already have minimum wage laws in place.

The gazette which was released by the human resources ministry on jan 10 stated that the minimum wages order 2020 will take effect on feb 1. According to nurhisham the consensus rule of thumb is that a minimum wage has little negative effects up to 40 of the median wage. The current average salary of rm758 whereby in peninsular malaysia the minimum wage of rm900 is set 20 4 below the market equilibrium wage of rm1 131.

This paper revisits the issues and concerns associated with the implementation of the malaysian minimum wage order mwo 2012 and its impact on the various stakeholders on the cost of doing business. While a minimum wage increase could benefit some people there are plenty of negative effects of this increase to consider as well.