Implement living wage for all sectors

By the Editorial Team · Tuesday, October 6, 2026

Malaysia is facing growing pressure to establish a living wage for both local and migrant workers, with advocates urging government support for small businesses to manage the transition. Implementing a living wage is seen as essential to address wage stagnation despite rising living costs and to ensure fair pay that sustains consumer demand and economic stability.

Calls are mounting in Malaysia for the government to implement a living wage across all sectors, covering both local and migrant workers, amid ongoing concerns about the impact of wage increases on businesses, particularly Micro, Small and Medium Enterprises (MSMEs).

Advocates argue that objections raised by employers and business associations, warning that higher wages could burden MSMEs and prompt some companies to relocate, have not been borne out by past increases in the minimum wage. Malaysia has raised its minimum wage several times in recent years without experiencing significant negative effects on business sustainability or relocation trends.

To address any transitional challenges for smaller enterprises, proponents urge the government to offer targeted assistance to MSMEs for a finite period, helping them adjust to wage adjustments. They emphasize that wage increases should apply equally to Malaysian and migrant workers to prevent employers from favouring cheaper foreign labour, which could undermine job opportunities and income levels for local workers.

The dependence on migrant labour has been a contentious issue, with critics arguing that businesses increasingly rely on foreign workers instead of prioritizing employment for Malaysians. This trend has raised concerns about wage suppression and the overall well-being of the domestic workforce.

Economic data underlining this debate highlights that over recent decades, Malaysia’s cost of living and GDP have both increased notably, yet worker wages have not kept pace. The disparity between profits retained by employers and compensation received by employees has widened, prompting calls for a more equitable distribution.

Budget 2027 has been identified as a timely opportunity for the government to introduce a living wage that better reflects current economic conditions. Advocates contend that while businesses may continue to caution against raising wages, ensuring that workers earn sufficient income is crucial for sustaining consumer demand and supporting the broader economy.

The debate over wage policy in Malaysia underscores the balancing act between fostering a competitive business environment and promoting fair labor standards in a changing economic landscape.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.