Malaysia has decided to set a minimum wage of M800 to M900 per month, depending on location
http://www.todayonline.com/World/EDC120313-0000053/KL-sets-minimum-wage-between-RM800-RM900
Two weeks ago, a newspaper reported that a complaint by Malaysian employers that a minimum wage will cause 90% of the workers in small companies to lose their jobs, as the profit margin of these companies cannot sustain the minimum wage.
The employers overlook an important fact. The minimum wage will apply to all businesses. Their competitors will also have to bear the higher cost. The higher cost has to be passed to consumers through higher prices. And the lower income earners can afford the higher prices, as they earn higher wages, due to the minimum wage.
An important outcome is that the rental component that is embedded in the prices will become relatively smaller, compared to wages. This is a good and fair outcome. It is better to have the proper balance between wages, rental and profit.
Without a minimum wage or other regulations protecting workers, the wages will be be depressed by market forces. This has led to the high disparity between the high and low income levels, i.e. the widening wage gap, whic his bad for society.
http://www.todayonline.com/World/EDC120313-0000053/KL-sets-minimum-wage-between-RM800-RM900
Two weeks ago, a newspaper reported that a complaint by Malaysian employers that a minimum wage will cause 90% of the workers in small companies to lose their jobs, as the profit margin of these companies cannot sustain the minimum wage.
The employers overlook an important fact. The minimum wage will apply to all businesses. Their competitors will also have to bear the higher cost. The higher cost has to be passed to consumers through higher prices. And the lower income earners can afford the higher prices, as they earn higher wages, due to the minimum wage.
An important outcome is that the rental component that is embedded in the prices will become relatively smaller, compared to wages. This is a good and fair outcome. It is better to have the proper balance between wages, rental and profit.
Without a minimum wage or other regulations protecting workers, the wages will be be depressed by market forces. This has led to the high disparity between the high and low income levels, i.e. the widening wage gap, whic his bad for society.
2 comments:
This minimum wage propaganda is a smoke screen for election for the existing Government who is very desperate for votes. They do not give a damn to workers, they just want their votes. Nobody in town areas will work for 800 and 900 ringgit for full time. The full-timer minimum wage in town areas now is 1200 ringgit excluding meals. In cities, probably they cost a lot more.
The minumum wage for Indonesian maid is 600 ringgit. Meals, accomodation,clothing, levy, fees and trips are not included. The total cost is about 1100 rinngit a month.
The worker union knows the politicians' trick. They just want to set up minimum wage framework first. They will come back to hike it later. Good move.
I have just completed experiment on Living on Minimum Wage in Malaysia
Definitely challenging ..try living on it each month.
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