Minimum wage hike could boost Sabah's Economy

The Star

13-05-2025

Sabah Human Resource Department director Zulkfli Wan Setapa talking to the media while Science, Technology and Innovation Minister, Datuk Dr Mohd Arifin Mohd Arif (right) and Federal Human Resources Ministry secretary-general, Datuk Azman Mohd Yusof (second right) look on.
KOTA KINABALU: The increase in Malaysia's minimum wage from RM1,500 to RM1,700 per month could boost the economy, says Sabah Human Resource Department director Zulkfli Wan Setapa.
He explained the concept as the 'velocity of money.'
'By increasing the minimum wage, each worker receives an additional RM200. In Sabah, 75% of the 2.1 million workforce earns approximately RM1,500 per month. This means about one million workers will benefit.
'If each of them receives RM200 more, that amounts to RM200mil injected into the economy every month,' he said.
Zulkfli said this after presenting appointment letters to 48 Sabah Labour Advisory Council (SLAC) permanent committee members at the Shangri-La Tanjung Aru Resort on Tuesday (May 13).
The ceremony was officiated by Chief Minister Datuk Seri Hajiji Noor, who was represented by Science, Technology and Innovation Minister, Datuk Dr Mohd Arifin Mohd Arif.
Zulkfli said that since these workers still fall below the poverty line, with incomes under RM2,800 per month, they are likely to spend their entire earnings.
'Imagine RM200mil spent on essentials like rice, that is income for rice sellers. Then those sellers may buy vegetables, passing the money along. The vegetable sellers may buy fish, and the fishmongers might use the money for their children's tuition.
'If the velocity of money is 10 times, that RM200mil becomes RM2bil circulating monthly. Annually, that is RM20bil injected into the economy, and this will stimulate Sabah's economy,' he explained.
He also acknowledged that unemployment in Sabah remains relatively high but said that state-level plans are in place to address the issue.
'We are focused on creating more job opportunities and encouraging Sabahans working in Peninsular Malaysia to return home and contribute to our local economy,' he said.
Zulkfli also touched on employment conditions, noting that workers in Sabah are legally entitled to 14 public holidays, adding that employers may provide more if they wish.
'The same applies to annual leave, the minimum is eight days for new employees, but some companies offer more, even up to 20 days. As long as they meet the legal minimum, it's up to the employer's discretion.'
Also present at the event was the Federal Human Resources Ministry secretary-general, Datuk Azman Mohd Yusof.