SANDAKAN: Tanjong Papat assemblyman Alex Thien Ching Qiang has voiced support for raising low-income earners’ wages but cautioned that the Malaysian Trades Union Congress’s (MTUC) proposal to hike the national minimum wage to RM3,100 must be weighed against employers’ capacity and its ripple effects on the job market.
While acknowledging the government’s ongoing review of the current RM1,700 minimum wage, Thien argued that an immediate 82.4% jump could be too drastic, especially for micro, small and medium enterprises (MSMEs) that form the backbone of the economy, potentially forcing them to cut hiring, scale down operations, or even shut down.
He stressed that higher wages do not automatically translate into better living standards, as real purchasing power depends on controlling the cost of goods and services. If operational costs surge due to wage adjustments, businesses may pass the burden to consumers through price hikes, ultimately eroding any net gain for workers.
Thien also highlighted the risk of wage compression, where supervisors, technicians, and experienced staff who currently earn above the minimum would see their differentials shrink. Adjusting the entire pay structure across all levels simultaneously is a tall order for most MSMEs within a short timeframe.
Rather than relying solely on administrative wage mandates, Thien urged the government to help companies transition from low‑cost, labour‑intensive models to higher‑value activities through technology, automation, digitalisation, and innovation. This, he said, would sustainably boost productivity and profitability, enabling firms to pay better wages without compromising viability.
He proposed targeted support such as tax incentives, automation grants, skills training, technology transfer, and effective industrial policies to help MSMEs upgrade their capabilities. Only when corporate earnings improve and more value is created can employers afford to hire skilled talent and raise existing staff salaries meaningfully.
Thien concluded that the minimum wage is merely a safety net, not the ultimate goal of national wage policy. True wage reform, he said, lies in ensuring that corporate profits, productivity, and worker incomes grow in tandem – so that wage increases become an outcome of economic growth and innovation, not a recurring administrative cost that fuels an endless cycle of rising wages and rising prices. – James Leong
Thien stressed that higher wages do not automatically translate into better living standards.
