Malaysia Raises Minimum Wage to Enhance Automated Production

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By: Eugenia Lotova
Since first implementing a minimum wage in January of 2013, the Malaysian government further increased minimum wage payments to workers as of July 1, 2016. This is part of the government’s New Economic Model, which aims to make Malaysia a high-income economy by 2020. Officials believe that the extra cost to employers will encourage a shift towards increase in productivity and investment in technology, thereby reducing reliance on labor-intensive manufacturing practices.

In addition, a rise in the minimum wage may inspire Malaysians to take jobs with increased salaries and decrease the Malaysian economy’s reliance on foreign workers. Understanding this policy will likely be of great importance for wage sensitive industries as well as companies seeking to supply consumer goods to the Malaysia market.