RM2,700 minimum wage? Reduce dependence on foreign workers for it to work: Minister

Higher minimum wage needs to come with lower dependence on foreign workers and greater reliance on technology, says Datuk Seri Johari Abdul Ghani.
Facebook/ Johari Abdul Ghani 

If a RM2,700 ($697.95) minimum wage is to be achieved, then reliance on foreign workers needs to be significantly reduced, said second finance minister Datuk Seri Johari Abdul Ghani.

In a Malay Mail Online report, Johari said 97% of Malaysia’s business sector is made up of small and enterprises (SMEs) which would be hard-pressed to run operations if made to pay the said amount as recommended by Bank Negara Malaysia (BNM).

In an annual report released last week, BNM estimated the living wage in Kuala Lumpur to be RM2,700 for a single adult, RM4,500 for a couple without child and RM6,500 for a couple with two children.

He said minimum wage limits should be increased gradually in stages and that lowering dependency on foreign workers as well as embracing technology can ease the process.

When asked if it is necessary to reduce the number of foreign workers, who usually cost less to hire, Johari replied: “Definitely. Definitely.”

“So if you want to make sure this country can afford a minimum wage of what Bank Negara has indicated, we need to slowly put attention into our automation, in all our businesses.”

He was speaking to the press after attending the launch of MBSB Bank Berhad at the Hilton Hotel in Kuala Lumpur.

He also noted that artificial intelligence needs to be utilised while industries heavily reliant on foreign workers need to go.

“Over time, we have to do away with this,” he said.

Putrajaya will impose more levies as part of the government’s plan to address the issue, according to Johari.

The minimum wage for Peninsular Malaysia was previously set at RM900 and RM800 for East Malaysia and Labuan.

In 2016, it was later revised to RM1,000 and RM920 for Peninsular Malaysia and East Malaysia and Labuan respectively.