KUALA LUMPUR: The minimum wage is set to rise from RM1,500 to RM1,700 as of February 1, 2025, a change anticipated to enhance the quality of life for many.
According to economic analyst Assoc Prof Dr Ahmed Razman Abdul Latiff, this increase, which was announced by Prime Minister Datuk Seri Anwar Ibrahim during the Budget 2025 presentation, will allow workers to have greater purchasing power, contributing to a healthier economy.
“By elevating the minimum wage, individuals will be able to buy better-quality food, find more comfortable housing, and save or invest their money,” he shared with Bernama.
This adjustment is expected to benefit retailers, as consumers will have more disposable income.
Anwar, who is also the Finance Minister, noted during the Budget 2025 announcement on Friday (Oct 18) that the implementation of the RM1,700 minimum wage would be delayed for businesses with fewer than five employees until August 1, 2025.
Meanwhile, financial expert Prof Datuk Dr Nik Maheran Nik Muhammad pointed out that increasing the minimum wage could help close the income gap between low and high-income individuals, thus fostering improved social well-being.
“Raising the minimum wage is a strategic move that can bolster livelihoods and purchasing power, leading to economic growth in the nation.”
“Workers will be able to secure better necessities such as food, housing, and education, subsequently increasing demand for goods and services,” he mentioned.
Additionally, he suggested that this rise in wage could also lead to increased productivity among workers, as they would feel more valued and encouraged to perform better.
Nonetheless, Dr Nik Maheran, currently with Universiti Malaysia Kelantan, warned that small and medium enterprises (SMEs) might encounter challenges in coping with the higher wage expenses.
“The government must ensure there are adaptations in other policies, such as taxation and incentives, to counterbalance potential negative impacts from the wage hike.”
“In a fluctuating economic environment, increasing the minimum wage could be risky if not supported by consistent economic growth,” he cautioned. – Bernama
