KUALA LUMPUR: The minimum wage is set to increase from RM1,500 to RM1,700 starting February 1, 2025, a move likely to enhance the quality of life for many.
Economic analyst Assoc Prof Dr Ahmed Razman Abdul Latiff remarked that this increase, revealed by Prime Minister Datuk Seri Anwar Ibrahim during the Budget 2025 discussion, will allow workers to enjoy improved purchasing power, contributing to a more dynamic economy.
“An increase in the minimum wage means workers can afford healthier food, better housing options, and the ability to save or invest,” he stated during a discussion with Bernama.
He added that retailers will also benefit, as consumers will have more money to spend.
In the Budget 2025 presentation on Friday (Oct 18), Anwar, who also holds the position of Finance Minister, announced that the enforcement of the RM1,700 minimum wage would be postponed for employers with fewer than five employees until August 1, 2025.
Additionally, financial expert Prof Datuk Dr Nik Maheran Nik Muhammad noted that raising the minimum wage could help close the income gap between low and high-income groups, thereby enhancing social well-being.
“The introduction of a higher minimum wage is a positive step that has the potential to improve livelihoods and increase purchasing power, leading to national economic growth.”
“Workers will be better positioned to meet their basic needs for food, shelter, and education, resulting in increased demand for goods and services,” he added.
Moreover, he indicated that such a wage increase could also lead to higher productivity among workers, as they feel valued and motivated to excel in their roles.
However, Dr Nik Maheran, currently with Universiti Malaysia Kelantan, expressed concerns that small and medium industries (SMIs) might struggle with the higher wage burden.
“The government should ensure that there are adjustments in other areas, such as tax incentives, to help mitigate the negative impacts that may arise from the wage increase.”
“In an unstable economic situation, a higher minimum wage could be risky if not matched with continuous economic growth,” he warned. – Bernama
