SMEs warn Malaysia’s RM3,000 minimum wage target threatens margins without productivity boost

In a TV3 Money Matters interview, MEF adviser Datuk Shamsuddin Bardan cautioned that the 13th Malaysia Plan’s aim of a RM3,000 minimum wage by 2030 will hit micro, small and medium enterprises hardest, as their profit margins have slipped from around 15% to near 10%. He said imposing higher wages without boosting productivity is unsustainable, urging workers to gain new skills and firms to invest in automation, digitalisation and better processes.

Shamsuddin highlighted the need for low-cost financing, grants and practical guidance to help SMEs choose appropriate technology. He warned that without productivity gains, businesses may raise prices, burdening consumers and potentially increasing demand for government assistance. He noted that the Progressive Wage Policy’s voluntary wage-training link can offer temporary incentives but should not become a permanent subsidy.