Regarding the deferment of the RM1500 minimum wage for businesses in Malaysia with fewer than 5 employees to July 1, 2023, announced by the Minister of Human Resources, V. Sivakumar on December 27, 2022, we, Parti Sosialis Malaysia (PSM), urge Prime Minister YAB Dato’ Seri Anwar Ibrahim to take necessary actions to reverse the deferment of the new minimum wage and for the government to begin enforcing this order as planned, as early as possible in 2023.

As stated by SME Corp Malaysia, as of 2021, 78.6% of the registered 1.2 million MSMEs in Malaysia were microenterprises with less than 5 employees. They form the backbone of the Malaysian economy, particularly in rural and suburban areas where large corporations do not have a significant presence. Thus, legislation and regulations affecting these businesses will have a significant impact on the wellbeing of the most vulnerable Malaysian workers.

While the exception provided for microenterprises may seem reasonable to allow small business owners to adapt to the necessary changes, in reality, business owners already have a variety of tools and exceptions to lessen the business and administrative impact of the changes to the Employment Act 1955. Providing employers with yet another exception at the expense of the most vulnerable workers in Malaysia will unduly burden the working class at this time, where the rising cost of living and problems of inflation continue to plague our economy, while signaling that the Malaysian government does not prioritize the welfare of its citizens.

Malaysia’s economic recovery from COVID-19 has been driven by domestic demand, as indicated by Bank Negara Malaysia’s 2023 economic forecast. Raising the minimum wage at the earliest possibility will aid Malaysia in sustaining this recovery and mitigating the international economic downturn, while addressing the long-term challenge of raising our economic productivity and reliance on foreign labor and capital, which are key to ensuring the long-term health of Malaysia’s economy.

The key challenge faced by our country now is not “getting people back to work,” but ensuring that work is duly compensated, productive, sustainable and just, in a time where global supply chains and markets are uncertain. The government must demonstrate in the coming months that it is serious about tackling both the structural, long-term problems with Malaysia’s economy and addressing the plight of the working class, the most vulnerable segment of our society. Without such a commitment, the people will suffer, as will the legitimacy of any government that allows such negligence.

Vincent Loh
Workers’ Bureau
Parti Sosialis Malaysia