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  • Writer's pictureBait Al-Amanah

Sudden raise in minimum wage could cripple firms, warns FMM

Chong Yoong Wen, an economist with think tank Bait Al-Amanah, said raising the minimum wage would see funds intended for investment into improving productivity go to paying increased salaries instead.

As a result, he said the policy would impact the scalability of businesses in the country, especially since 90% of them are micro, small and medium enterprises (MSMEs).

“As labour costs rise, cost-push inflation (an overall price increase resulting from higher wages and raw materials) may occur. This coincides with the weak ringgit, which affects the importation of raw materials,” said Chong.

Read more here.

Photo credit : Bernama

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