KUALA LUMPUR – The minimum wage increase from RM1,700 to RM2,000 a month and the RM2,500 starting salary for semi-skilled workers and graduates have the potential to boost purchasing power and improve the country’s wage structure, say experts.
They said the initiatives announced by Prime Minister Datuk Seri Anwar Ibrahim in Budget 2027 on Friday would ensure remuneration is more commensurate with workers’ qualifications and skills.
Universiti Teknologi MARA (UiTM) Faculty of Business and Management’s Economics and Financial Studies Department senior lecturer Dr Mohd Rahim Khamis said paying salaries commensurate with qualifications and skills would boost productivity and contribute to economic growth.
“When workers are paid according to their qualifications and skills, it will increase their productivity. This, in turn, allows them to enjoy an income that matches their output, indirectly impacting the country’s economic growth,” he told Bernama.
He said the RM2,500 starting salary also has the potential to narrow the gap between the qualifications and income of graduates and semi-skilled workers, while encouraging the local workforce to continue contributing to national development.
Meanwhile, Malaysia University of Science and Technology (MUST) economist Prof Emeritus Dr Barjoyai Bardai said the RM300 minimum wage increase, or about 17.6 per cent, could stimulate domestic demand as low-income earners typically spend most of their income on daily necessities.
“Therefore, the wage increase can stimulate domestic demand, especially in the food, retail, transport and services sectors,” he said.
He said employers must increase productivity through technology and worker training, while support such as financing for digitalisation and retraining is crucial to help micro, small and medium enterprises (MSMEs) adjust to higher labour costs.
Universiti Putra Malaysia (UPM) Faculty of Educational Studies’ Professional Development and Continuing Education Department head Assoc Prof Dr Nor Wahiza Abdul Wahat said the minimum wage increase would improve workers’ financial and psychological wellbeing.
“Additionally, in human resource management, reasonable remuneration is an important factor in reducing the tendency of workers to leave an organisation, especially in sectors with high turnover rates,” she said.
UNI Malaysia Labour Centre (UNI-MLC) president Datuk Mohamed Shafie BP Mammal said the implementation of the new wage policy must consider worker protection and employers’ capabilities, especially MSMEs.
“At the same time, UNI-MLC believes the implementation of this new wage policy requires a comprehensive study to ensure workers’ interests remain protected,” he said in a statement.
He said tripartite negotiations between the government, employers and trade unions are vital to refine the policy’s implementation and balance worker welfare with the country’s economic development needs.
When tabling Budget 2027 themed “Reaching for the Skies, While Anchored on Our Values”, Anwar said the government had agreed to raise the minimum wage from RM1,700 to RM2,000 effective June 2027, benefiting over four million workers.
The Finance Minister said MSMEs with annual sales below RM50 million are exempted from the new rate to give them time to adjust their business models. – October 11, 2026