KUCHING: The government’s decision to increase the minimum wage to RM1,700 by February 2025 has been met with both optimism and concern.
Economist Abu Sofian Yaacob welcomed the move, saying it would boost employee morale and productivity.
While acknowledging that some businesses might face short-term cost increases, he argued that the long-term benefits outweigh the challenges.
“As employees have more disposable income, they will spend more, which will benefit the economy,” he told Sarawak Tribune.
Regarding the six-month delay for employers with fewer than five employees, Abu Sofian suggested that these micro-enterprises should focus on improving their services and premises to better adapt to the higher wage.
“This will help them thrive in a more competitive market,” he added.
Meanwhile, economist Datuk Ahamed Kameel Mydin Meera agreed that the wage hike could be a catalyst for economic growth.
He explained that higher wages would increase aggregate demand, leading to increased production and economic activity.
“It will also attract talent from overseas,” he said.
Ahamed Kameel supported the six-month delay for micro-enterprises, saying it would provide them with a necessary buffer to adjust to the rising wage costs without jeopardising their financial stability.
