UMNO Youth chief Datuk Dr Muhammad Akmal Saleh has warned that Malaysia’s planned minimum wage increase from RM1,700 to RM2,000 could lead to higher prices for goods and services if employers pass the additional wage costs on to consumers.
Akmal said that although more than four million workers are expected to benefit from the increase, the government must also consider its potential impact on millions of other workers who will not be covered by the policy.
He cautioned that those who do not receive a pay rise could still face a higher cost of living if businesses raise prices to offset their increased wage bills.
“When the cost of paying wages increases, can we be confident that large companies will be willing to reduce their profits? Or will these additional costs ultimately be passed on to consumers through higher prices?” he said in a Facebook post on Saturday.
“Only some workers will receive a wage increase, but the entire population could end up bearing the cost of higher prices. This is the domino effect the government must consider.”
Prime Minister Datuk Seri Anwar Ibrahim announced the increase during the presentation of Budget 2027 on Friday. The new minimum wage of RM2,000 a month is scheduled to take effect in June 2027, benefiting more than four million workers nationwide.
Anwar said the measure was part of the government’s efforts to narrow the gap between workers’ productivity and wages, while addressing cost-of-living pressures caused by incomes failing to keep pace with rising prices.
Akmal stressed that he supported higher wages for workers but argued that a policy intended to help the public should not ultimately place a greater financial burden on them.
He outlined six measures for the government to consider alongside the wage increase.
First, he called for regular monitoring of prices for goods and services after the policy takes effect, with firm action against businesses that impose unreasonable price increases.
Second, he urged stronger enforcement against cartels, profiteering and price manipulation to prevent businesses from arbitrarily passing additional costs on to consumers.
Third, he proposed targeted assistance for genuinely affected micro and small businesses, including temporary incentives, productivity training and support for automation.
Fourth, Akmal said the minimum wage increase should be implemented in stages and guided by data, taking into account employers’ financial capacity, worker productivity and differences in living costs across states and sectors.
Fifth, he called for broader protection for workers who do not benefit from the wage increase through skills development, better-paying job opportunities and a comprehensive review of wages.
Finally, he urged the government to publish transparent, regular reports on the policy’s effects on prices, corporate profits, employment opportunities and purchasing power.
“The people have the right to know whether this policy is genuinely helping them or merely shifting the burden elsewhere,” he said.
