Government must aid SMEs in the implementation of hike in Minimum Wage
As most businesses prepare for the May 1 implementation of the new RM1,500 minimum wage, questions persist over whether SMEs can afford the extra expense.
The new standard comes as the economy continues to recover from the Covid-19 outbreak.
Despite the complete adoption of a minimum wage in January 2013 and subsequent increases in 2016 and 2019, data from Malaysia’s Statistics Department (DoSM) revealed that SMEs grew every year from 2013 to 2019.
From 2013 to 2019, the DoSM revealed that SMEs grew by over 5% a year using GDP.
The growth rates were: 6.4% (2013), 13.5% (2014), 6.2% (2015), 5.2% (2016), 7.2% (2017), 6.2% (2018), and 5.8%. (2019).
When the Covid-19 pandemic hit Malaysia in 2020, SMEs’ GDP fell by 7.3%, the worst growth rate recorded by DoSMs since 2003.
“The two-year pandemic led to a very unequal recovery last year, with SMEs growing far slower than the 5.6% average GDP growth.