KUALA LUMPUR, Oct 8 (Bernama) -- Malaysia’s minimum wage could be raised to RM1,900-RM2,000 but should be introduced gradually and tailored to different sectors and states to ease pressure on micro, small and medium enterprises (MSMEs), an economist said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said a targeted approach was needed because wage structures, workers’ skill levels and operating costs varied across industries, while labour market conditions also differed between urban and rural areas.
“The minimum wage is currently RM1,700 a month, up from about RM900 in 2012, and it has been raised gradually since then.
“The last revision was about two years ago, so perhaps it is time to raise it again to a higher level, possibly RM1,900 or RM2,000,” he told reporters after Bank Muamalat’s Corporate Economic Forum 2026.
Mohd Afzanizam said the minimum wage was intended to establish a floor for workers’ pay, as leaving wage-setting entirely to market forces might not always produce efficient outcomes.
However, he said the current RM1,700 rate applied uniformly across industries and states, potentially placing different levels of pressure on employers, particularly MSMEs.
“To arrive at a more appropriate level, perhaps the minimum wage could be considered on an industry-by-industry basis. If this can be implemented, it may gain greater support from businesses, particularly MSMEs,” he said.
He said implementation could be phased in, beginning with key sectors that contribute to gross domestic product, including agriculture, mining, manufacturing and services.
Mohd Afzanizam said any increase should balance the interests of workers and employers to ensure the policy remained fair and sustainable.
While higher minimum wages were important and broadly welcomed by workers, he said rising labour costs could put pressure on business operations, particularly for MSMEs.
A sector- and state-based approach could therefore better reflect differences in labour market conditions while making a higher minimum wage more manageable for employers, he added.
-- BERNAMA