KUALA LUMPUR, 7 February -Beginning 1 February, 4.37 million workers in Malaysia who receive the minimum wage each month can now breathe a sigh of relief.

this as the basic salary they will receive will increase by RM200, from RM1,500 to RM1,700.

The RM200 increase is significant for those with low incomes and struggling to make ends meet, especially for those who have families, as well as those who live in urban areas where everything is expensive compared to rural areas.

This salary increase will certainly help, to some extent, reduce the burden of the cost of living, as it will increase the people's purchasing power.

At the same time, it will stimulate the country's economic growth through increased demand in the domestic market.

It may also allow employees to increase their savings or start saving for use in times of emergency.

A high minimum wage is also a factor in attracting youths to fill the local job market, which can ultimately reduce the country's dependence on unskilled foreign workers.

In determining the new minimum wage rate, various factors are taken into account.

Among them, the current poverty line income, median wage, changes in the consumer price index, productivity growth, actual unemployment rate and inflation rate.

It is also determined by the government based on the recommendations of the national wage consultative council, following consultations with the public.

The Basic Living Expenditure (PAKW) is also used as a basic reference in setting the minimum wage, to ensure that household needs can be met, especially in urban areas.

In addition, it also serves as a mechanism to reduce income inequality, especially for private sector workers.

In short, the periodic review of the minimum wage rate is not done arbitrarily, without thorough research or discussions with other parties.

Last Sunday, Human Resources Minister, Steven Sim said the minimum wage policy will be improved from time to time, through engagement sessions with various parties.

These sessions will also refine the implementation of the new minimum wage rate.

This includes examining its implementation based on geography and the economic conditions of a locality.

Indeed, these two factors should be taken into account, considering the economic conditions and cost of living in each locality are different.

What is important is to find a balance between the price of goods and the wages of workers.

It will not be useful if salaries increase, but the price of goods also increases.

In reality, there will definitely be an increase in the price of goods in the market following an increase in wages.

Here, enforcement by the relevant ministry is important to curb any unreasonable increase in the price of goods.

Due to this concern, the Minimum Wage Order, which came into effect on 1 February 2025, only applies to employers who employ five employees and above.

For employers with fewer than five employees, the new rate will take effect on 1 August.

The postponement allows time for necessary adjustments in wage structures and operations.

Non-compliance is an offence under the National Wages Consultative Council Act 2011 (Act 732) and may result in penalties.

In conclusion, while it may be that increasing the minimum wage is not the solution to the cost of living issues facing the people, it can certainly help ease the burden on the people, especially the lowest income earners.

If viewed from one perspective, increased wages will increase worker productivity.

Why? Because workers who receive a wage increase will feel happier and more motivated to improve performance.

This in turn will provide benefits and profits to employers.

In reality, however, the situation is an endless cycle.

That concludes Editor's Pick prepared by RTM Radio News editor, Masniza Awang Kechik and translated by Karmila Badri.

This is the author's personal view and does not necessarily represent the views or official position of RTM.