KUALA LUMPUR — The Federation of Malaysian Manufacturers (FMM) has rejected a proposal by the Malaysian Trades Union Congress (MTUC) to raise the national minimum wage from RM1,700 to RM3,100.
FMM president Jacob Lee Chor Kok said the proposed increase of over 80% was too high and did not match current economic conditions.
While FMM supported higher wages in line with Malaysia’s goal to become a high-income country, a sudden increase of RM1,400 increase would hurt especially small and medium enterprises.
Any wage increase must consider productivity, employers’ ability to pay, export competitiveness and inflation. It should also consider how higher minimum wages would affect the salaries of other workers, Lee said in a statement.
He was responding to MTUC secretary-general Kamarul Baharin Mansor’s call yesterday for RM3,100 as a decent living wage to guide or be used as a point of reference in setting the new minimum wage.
Kamarul had cited the rising costs of food, housing and transport for the increase. He also pointed to workers who had been employed for years but were still earning RM1,700 because of fixed salary structures.
Lee said there was a need to distinguish between the statutory minimum wage and the wider goal of a living wage.
“The distinction between a statutory minimum wage, which provides a basic wage floor, and the broader aspiration for a living wage, must be properly recognised,” he said.
Rather than a single, large increase in the minimum wage, Lee said a better way to achieve high wages was for more government support for SMEs, including tax measures and incentives for automation, digitalisation and worker training, so that companies could achieve better productivity, skills and business growth.
Lee said businesses were still adjusting to the last increase to RM1,700 last year, and a drastic increase to MTUC’s desired level would hit SMEs and labour-intensive manufacturers the hardest. Lee warned of impacts such as business closures, companies relocating operations elsewhere and fewer entry-level jobs.
“Malaysia could also become less competitive with other Asean manufacturing countries,” he added.
He cited, as comparisons, the maximum minimum wage in other Asean countries, such as RM820 maximum in Vietnam, RM1,280 in Thailand, and RM1,450 in Indonesia.
Lee said raising Malaysia’s minimum wage to RM3,100 without similar gains in productivity could weaken the country’s position as a manufacturing hub.
The current minimum wage of RM1,700 took effect in February 2025. It became mandatory for all employers in August 2025.
Under the National Wages Consultative Council (NWCC) Act, the next mandatory review of the minimum wage is due in February 2027. – August 24, 2026