Malaysia to unveil minimum wage plan

Malaysia will announce plans for a minimum wage this month, a government official said, bringing the nation in line with Southeast Asian neighbors strengthening support for those with lower incomes.

Prime Minister Najib Razak and his Cabinet have yet to complete the plan, according to the official, who spoke on condition of anonymity because the talks are private. Reuters reported earlier today that the Cabinet had approved a minimum wage of RM800 (US$264) to RM900.

Najib is preparing for elections due in early 2013, and a minimum wage would follow an October budget that featured cash payments to low-income families -- a step that’s helped increase his approval rating.

Thailand and Vietnam plan to boost minimum pay, and Singapore last month introduced a permanent program for handouts to low-income people as policy makers throughout the region seek to address wealth gaps as Asia leads global growth.

“It’s clear that elections are the motivation but what is unclear is if this will be a blanket minimum wage or whether it will be differentiated by sectors or by state,” said Kit Wei Zheng, an economist at Citigroup Inc in Singapore.

“There will be a loss of competitiveness if it’s a blanket hike across all sectors. The government is aware of the pitfalls.” Najib announced in October 2010 that Malaysia intended to adopt a minimum wage policy as part of its long-term economic planning. “We are waiting for the government to make a decision,” said Shamsuddin Bardan, executive director of the Malaysian Employers Federation. “We have expressed our concerns about the rates and sectors to be involved during our consultations.” -- Bloomberg