Microeconomics: Minimum Wage Will Cause Unemployment and Inflation
ECO 162
Microeconomics
Title : Minimum wage will cause unemployment, inflation, say employers, economists
Group: JBM1123u
Group Members: Muhammad Asyraff bin Ab Hamid
2010357469
: Mohamad Lukman bin Abd. Manaf
2010114997
: Muhammad Faiz bin Mustafa
2010504183
Lecturer: Miss Diana binti Mazan
Executive Summary Minimum wage policy will lead to surging unemployment, “black market” labour and inflationary pressure, employers and economists have warned. Datuk Seri Najib Razak announced on Monday a base wage of RM900 for the peninsula and RM800 in Sabah and Sarawak with a grace period of six months, or doubles that for micro-enterprises. “When employers refuse to hire at the minimum wage, desperate workers will look to the black market and agree to take less than that,” said Wan Saiful Wan Jan, chief executive of libertarian think-tank Institute for Democracy and Economic Affairs. The government began working on a minimum wage policy last year after over a decade of pressure from labour unions during which productivity rose by 6.7 per cent annually but real wages inched up by just 2.6 per cent each year. Malaysian Employers Federation executive director Shamsuddin Bardan also said that in some cases, such as plantation workers in Sabah, a minimum wage of RM800 would double salaries. “On top of that, if Najib wins elections as expected, subsidy cuts will resume. In the end there will be very little positive impact for workers,” said Hafiz Noor Shams, an economist at a leading investment bank. Shamsuddin suggested instead that instead of “using the force of law,” the government should incentivize both employers and employees to upgrade the skill base of the workforce. The Human Resources Ministry says three-quarters of the 12 million-strong workers are unskilled. When there are un skilled workers, there are hard to give them a high salaries. This is because. It take time to make them
Microeconomics
Title : Minimum wage will cause unemployment, inflation, say employers, economists
Group: JBM1123u
Group Members: Muhammad Asyraff bin Ab Hamid
2010357469
: Mohamad Lukman bin Abd. Manaf
2010114997
: Muhammad Faiz bin Mustafa
2010504183
Lecturer: Miss Diana binti Mazan
Executive Summary Minimum wage policy will lead to surging unemployment, “black market” labour and inflationary pressure, employers and economists have warned. Datuk Seri Najib Razak announced on Monday a base wage of RM900 for the peninsula and RM800 in Sabah and Sarawak with a grace period of six months, or doubles that for micro-enterprises. “When employers refuse to hire at the minimum wage, desperate workers will look to the black market and agree to take less than that,” said Wan Saiful Wan Jan, chief executive of libertarian think-tank Institute for Democracy and Economic Affairs. The government began working on a minimum wage policy last year after over a decade of pressure from labour unions during which productivity rose by 6.7 per cent annually but real wages inched up by just 2.6 per cent each year. Malaysian Employers Federation executive director Shamsuddin Bardan also said that in some cases, such as plantation workers in Sabah, a minimum wage of RM800 would double salaries. “On top of that, if Najib wins elections as expected, subsidy cuts will resume. In the end there will be very little positive impact for workers,” said Hafiz Noor Shams, an economist at a leading investment bank. Shamsuddin suggested instead that instead of “using the force of law,” the government should incentivize both employers and employees to upgrade the skill base of the workforce. The Human Resources Ministry says three-quarters of the 12 million-strong workers are unskilled. When there are un skilled workers, there are hard to give them a high salaries. This is because. It take time to make them