The Muamalat Newsletter Vol.1 2023

17 FEM Newsletter | June 2023 References Azmi, A. (2022, May 20) Article ‘Malaysia Puts New Minimum Wage into Effect. IMoney Magazine. Retrieved from https://www.imoney.my/articles/malaysia-new-minimum-wage DOSM (2021) ‘Salaries and Wage Survey Malaysia 2020’ https://www.dosm.gov.my/v1/index.php?r=column/ cthemeByCat&- cat=157&bul_id=VDRDc0pGZHpieEUwMDNFWHVHSnpkdz09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09 DOSM. (2023, March 9). Key Statistics of Labour Force in Malaysia, January 2023. Department of Statistics Malaysia. https:// www.dosm.gov.my/v1/index.php?r=column/ cthemeByCat&cat=124&bul_id=M2hJVXBzai81ejZBWU1ESFozQkhG- dz09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09 ESCAP, U. (2022). Handbook on Policies, Promotion, and the Facilitation of Foreign Direct Investment for Sustainable De- velopment in Asia and the Pacific. Ghee, T. C., Mooi, S. K., & Sang, M. L. M. (2015). An Initial Review of the Implementation of the Malaysian Minimum Wage Order: A Case for A Win-win Intention, Implementation and Enforcement. The Journal of Developing Areas, 313–324. Hall, R. E., & Müller, A. (2012). Viewing Job-seekers Reservation Wages and Acceptance Decisions through the Lens of Search Theory. Working paper, Stanford University. Harasztosi, P., Lindner, A., Auerbach, A., Bátyi, T., Bodnár, K., Best, M., Dellavigna, S., French, E., Horváth, H., Hoynes, H., Katz, L., Köll˝, J., Kézdi, G., K˝ Orösi, G., Manning, A., Mondragon, J., Nadler, C., Machin, S., Muraközy, B., … Zidar, O. (2019). Who Pays for the Minimum Wage? American Economic Review, 109(8), 2693–2727. https://doi.org/10.1257/AER.20171445 Hirsch, B. T., Kaufman, B. E., & Zelenska, T. (2015). Minimum Wage Channels of Adjustment. Industrial Relations: A Journal of Economy and Society, 54(2), 199–239. https://doi.org/10.1111/irel.12091 Hirsch, D. (2011). A Minimum Income Standard for the UK in 2011. York: Joseph Rowntree Foundation. Lee, J. X., & Yuen, J. L. F. (2015). Will Minimum Wage Translate into Higher Productivity? A Case Analysis of Manufacturing Firms in Malaysia. International Journal of Education and Research, 3(4), 453-464. Lemos, S. (2006). Anticipated effects of the minimum wage on prices. Applied Economics, 38(3), 325-337. MBLS. (2022). Wages in Malaysia: The Story Behind the Statistics. Malaysian Bureau of Labour Statistics. Minimum Wage Order (2022) https://lom.agc.gov.my/ilims/upload /portal/akta/outputp/ 1730859/PUA%20140%20(2022). pdf Ministry of Human Resources (MOHR), 2013. Employment and Labour Statistics 2013: Implementation of the Minimum Wages Policy. Retrieved from. http://www.mohr.gov.my/index.php/en/i-statistics. Ministry of Human Resource Malaysia (MOHR) (2022) Repot Statistik Pekerjaan dan Pemburuhan Siri 2 https://www.mohr.gov . my/ebook/istat_bil2_2022/mobile/index.html Neumark, D., & Nizalova, O. (2007). Minimum Wage Effects in the Longer Run. Journal of Human Resources, 42(2), 435- 452. Neumark, D., Wascher, W. L., & Wascher, W. L. (2008). Minimum Wages. MIT press. Rebrov, A. V. (2012). Factors of the Formation of Worker’s Motivation. Sociological Research, 51(2), 37-56 Sabia, J. (2015). Do Minimum Wages Stimulate Productivity and Growth? IZA World of Labor, ISSN 2054-9571, Institute for the Study of Labor (IZA), Bonn, https://doi.org/10.15185/izawol.221 Seow, R. Y. C. (2023). Response to MinimumWage Shock in Malaysia: SMEs’ Channel of Adjustment. Journal of Economics and Sustainability, 5(1), 1–19. https://doi.org/10.32890/jes2023.5.1.1 Tajuddin, S. A. F. S. A., Hasan, F. A., Muhamad, S., & Sulaiman, N. F. C. (2021). Estimating the Foreign Workers’ Effect of Minimum Wage in Malaysian Manufacturing Sector. Kasetsart Journal of Social Sciences, 42(1), 123–128. https://doi.org/10.34044/j. kjss.2021.42.1.19 minimum wage may result in a 4% rise in food prices and a 0.4% increase in overall pricing. Harasztosi et al. (2019) assert that customers bear the majority of the cost increase caused by the minimumwage hike, with a 75% burden. However, this option may not be feasible for all companies, particularly MSMEs that are already facing higher costs of operation and production. To sum up, the Malaysian government’s decision to raise the minimum wage from RM1,200 to RM1,500 had mixed effects on businesses, workers, and consumers. According to DOSM, the labour force did not experience any negative effects from the minimum wage increase, possibly because the increase in employment was greater than the decrease in employment. However, the increase in the minimum wage may lead to a further decline in Malaysia’s competitiveness in the low-skilled labour force, and foreign labour dependency may decrease due to a smaller gap in labour costs and greater responsiveness from local labour. The minimum wage hike may result in an improvement in labour productivity, well-being, and competency across different sectors. Lastly, the minimum wage increase may also exacerbate the impact of inflation on consumers. Authors’ email: 1. floraanthonysamy94@gmail.com 2. richard-seow@hotmail.com