Minimum wage hike will spur Sabah's economy
Zulkfli (left), Azman (centre), and Mohd Arifin at the SLAC appointment ceremony.
KOTA KINABALU (May 13): The recent increase in the minimum wage from RM1,500 to RM1,700 per month is expected to significantly stimulate Sabah's economy, said Sabah Human Resource Department (JTK Sabah) director Zulkfli Wan Setapa.
'I'll give you an example. In economic terms, this relates to the velocity of money. With the RM200 increase, every worker will have more to spend,' he said.
'In Sabah, about 75 percent of the 2.1 million workers earn around RM1,500 per month. That's roughly one million workers who will benefit from the increment. Multiply that by RM200, and you get RM200 million injected into the economy every month,' he added.
Zulkfli was speaking to the media after the handing over of appointment letters to 48 permanent members of the Sabah Labour Advisory Council (SLAC) at the Shangri-La Tanjung Aru Resort on Tuesday. The event was officiated by Science, Technology and Innovation Minister Datuk Mohd Arifin Mohd Arif who represented the Chief Minister.
Zulkfli pointed out that since many of the wage earners fall below the poverty line (defined as earning under RM2,800/month), the additional income is likely to be spent entirely on necessities.
'Imagine RM200 million spent on essentials like rice. That's RM200 million in income for rice sellers. The rice sellers might then spend on vegetables, the vegetable vendors on fish, and the fishmongers on tuition for their children. This chain reaction keeps the money circulating,' he explained.
'If the velocity of money is 10 times, that RM200 million can translate to RM2 billion circulating in the economy each month. Over a year, that's RM20 billion — a major boost for Sabah's economy.'
He also acknowledged that unemployment in Sabah remains relatively high but assured that the State Government is implementing more effective strategies to address the issue.
'We're focusing on job creation and also encouraging Sabahans working in West Malaysia to return and contribute to the local economy,' he said.
On another note, Zulkfli addressed concerns regarding public holidays and leave entitlements for workers in the state.
He clarified that under current labour laws, employers are required to provide a minimum of 14 public holidays per year.
'Anything beyond that is up to the employer. Some may voluntarily offer more. The same goes for annual leave — the statutory minimum is eight days, but some employers provide 10, 12, 15, or even up to 20 days.
What's important is that they meet the minimum requirement,' he said.
Also present at the event was Datuk Azman Mohd Yusof, Secretary-General of the Federal Ministry of Human Resources.
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