High demand: The manufacturing sector, which includes those handling plastics, electronics and metal parts, relies heavily on foreign labour, which makes up to 80% of the workforce, say industry players.
JOHOR BARU: With orders dropping by at least half compared to the pre-pandemic period, Johor’s businesses are finding it tough to raise their workers’ minimum wage to RM1,700 per month.
South Johor Foundry and Engineering Industries Association president Lim Kok Kiong urged the government to consider postponing the implementation of the RM1,700 minimum wage from the current RM1,500, which was supposed to come into effect starting Feb 1.
“Industry players thought that business will get better after the economy reopened following the end of the Covid-19 movement control orders. Many even ordered new machinery in anticipation of the projected increase in order.“However, in reality, it has been more than three years, yet the amount of orders received has not recovered to the way it was before,” he told The Star.
Lim said the manufacturing sector, which includes those handling plastics, electronics and metal parts, relies heavily on foreign labour, which can be as high as 80% of the workforce.
“Although the association does not object to increasing the minimum wage for workers, it is not the right time for it,” he said, adding that many local factory staff are already earning a basic pay of more than RM1,700 each month.
He added that besides foreign workers’ wages, business operators are also forking out money for their accommodation, meals and transportation, amounting to more than RM2,000 per person each month.
Johor Baru Traders and Hawkers Association president Roland Lim said it was unfair for business owners to pay workers with no skills a minimum wage of RM1,700. He said these days, many new foreign workers come to them with no skills or experience in the particular industry they are hired for.
“Business owners usually have to spend time and money to train them. We received complaints from our members that it is a challenge to train foreign workers – many will cry, threaten to quit or complain to their agent when we tell them off for not taking instructions well,” he said.
“And by the time we train them to become familiar with the job, their two-year permit period is almost up and they have to return to their home countries,” Roland said, adding that the government should consider a three- to five-year permit period for foreign workers to address this issue.
“At this rate, Malaysia will become a ‘training ground’ to produce skilled workers who go on to contribute to the economy at their home country or other countries.”
He also said the increase would cause a snowball effect and cause the price of goods and services to go up.
He said his association opposes the increase in the minimum wage as it will impose further burdens on them, adding that the guild will raise this issue to the Human Resources Ministry soon.
When tabling Budget 2025, Prime Minister Datuk Seri Anwar Ibrahim announced that the government agreed to raise the minimum wage from RM1,500 per month to RM1,700 per month effective Feb 1.
Anwar, who is also Finance Minister, said the enforcement of the RM1,700 monthly minimum wage for employers with fewer than five employees will be delayed by six months so that it takes effect from Aug 1.
