Announced last night:
PUTRAJAYA: The minimum monthly wage for private sector employees in the Peninsular has been set at RM900 and RM800 for those in Sarawak, Sabah and Labuan, said Prime Minister Datuk Seri Najib Tun Razak on Monday.
It covers employees in all economic sectors except those in the domestic service sector, such as maids and gardeners.
It works out to RM4.33 per hour for those in the Peninsular while employees in Sarawak, Sabah and Federal Territory of Labuan are to be paid a minimum of RM3.85 per hour...
...The rates will take effect six months from the date the Minimum Wage Order (Perintah Gaji Minimum) is gazetted.
However, the effective date for small-time employers or micro enterprises is extended by another six months in order to give them the space and opportunity to make preparation so that their businesses would not be affected, he said.
Najib said the 12-month grace period did not cover professional firms such as dental and medical clinics, legal, architecture and consultants...
...Najib also explained that the different rate of minimum wage between the Peninsula and Sarawak, Sabah and Labuan was due the variation in wage structures and the noticeable cost of living in those places.
However, the Government hoped that within the next two to three years, the minimum wage for Sabah, Sarawak and Labuan can be streamlined with the one in the Peninsular.
At the level set, unemployment and inflationary effects should be fairly minimal. RM900 is less than the 40% threshold against average per capita income which is the norm among developed economies and well below the 45% threshold which research suggests wage floors start causing significant unemployment. The copouts for including certain benefits and payments in kind as well as the 6/12 month implementation period, suggest that take-home pay might not actually improve much for workers already earning close to the minimum wage.
What would be interesting here is that we have something of the nature of a natural experiment – statistically testing the before- and after-effects of implementing a minimum wage. But at this level, below where we would expect anything significant to turn up, it’s purely of academic interest.
But I’m happy for those workers who are getting the forthcoming bump in pay – assuming of course it turns up as a real increase.