Higher minimum wage reduces Malaysia's dependence on foreign workers, says minister Liow

Malaysian Transport Minister Liow Tiong Lai said that more of his countrymen would be willing to take up jobs they used to shun if the minimum wage was increased.
Malaysian Transport Minister Liow Tiong Lai said that more of his countrymen would be willing to take up jobs they used to shun if the minimum wage was increased. PHOTO: AFP

PORT DICKSON (The Star/Asia News Network) - More Malaysians will be encouraged to take up jobs they previously shunned once the minimum wage is increased, says Malaysia Transport Minister Liow Tiong Lai.

Liow said the move, proposed by Prime Minister and Finance Minister Najib Tun Razak in his Budget 2016 speech last Friday, is also in line with Malaysia's goal to become a high-income nation by 2020.

Najib proposed increasing the minimum wage for private sector workers in Peninsula Malaysia from RM900 to RM1,000 (S$295 to S$329), and from RM800 to RM920 (S$263 to $302) in Sabah, Sarawak and Labuan from July 1 next year.

The raise will not apply to domestic workers.

"We have been talking about reducing the number of foreign workers in Malaysia, but it is unfortunate that the numbers have increased to millions now," Liow told reporters after opening the refurbished Telok Kemang MCA office in Port Dickson.

He said reducing Malaysia's dependence on foreign labour is important if the country wished to move from being a labour intensive to a high-tech nation.

Liow made the comments after he was asked to respond to the Federation of Malaysian Manufacturers's (FMM) request to defer the minimum wage raise until the economy has stabilised for fear of its impact on small businesses.

FMM also said the government's move to increase the income ceiling for mandatory contribution to Socso (Social Security Organisation) from RM3,000 to RM4,000 was yet another increase in the cost of doing business particularly to small and medium enterprises.

Liow said the government had been talking about a need to cut the number of foreign workers long enough.

"We gave the signal a long time ago. We need to start implementing this as the number of foreign workers has reached serious proportions," he added.