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The proposal to introduce a minimum starting salary of RM2,500 for fresh graduates requires careful consideration and a clear implementation framework to prevent wage imbalances, particularly among small and medium-sized enterprises (SMEs). Mydin Mohamed Holdings Bhd managing director Datuk Ameer Ali Mydin said salary increases were important to help workers cope with the rising cost of living. However, he stressed that any policy on graduate salaries should take into account job responsibilities, skill levels and employee productivity.
According to Ameer Ali, setting starting salaries based solely on academic qualifications could create dissatisfaction among existing employees, especially those with years of experience who earn the same amount or less than newly hired graduates.
“If an existing employee is earning RM2,300 and a fresh graduate comes in at the same salary, it could raise questions among the current workforce,” he said in a special interview on Astro AWANI’s Fokus Minggu Depan programme. He explained that employers might then face pressure to review salaries across their organisations to maintain fairness, rather than making adjustments only for workers affected by minimum wage requirements.
Skills mismatch remains a major concern
Ameer Ali also highlighted the mismatch between graduates’ qualifications and the skills required by employers as a key issue that must be addressed before introducing a standard starting salary. He noted that graduates continuing to struggle to secure employment despite holding academic qualifications indicated a need for closer alignment between education and industry requirements. In his view, improving the employability of graduates requires more than setting a salary benchmark. Their skills and capabilities must also match the demands of the labour market. He cautioned that enforcing a uniform salary policy without considering differences in job functions and employers’ financial capacity could place additional pressure on businesses, particularly SMEs, which generally have fewer financial resources than larger corporations.
Despite these concerns, Ameer Ali emphasised that wage growth should not be overlooked, warning that workers’ purchasing power would continue to decline if their incomes failed to keep up with rising living expenses. He said businesses would need to find ways to improve productivity and manage higher labour costs, including through greater adoption of automation and artificial intelligence (AI).
“When costs rise, employers need to find ways to become more productive. One approach is through automation and the use of AI. Otherwise, cost pressures will continue to increase,” he said.
The shift towards automation could help businesses improve operational efficiency, although it also highlights the importance of ensuring that workers develop the skills needed to adapt to changing workplace demands. The debate over graduate starting salaries comes as the government has agreed to raise Malaysia’s minimum wage from RM1,700 to RM2,000 per month, effective June 2027. The increase is expected to benefit more than four million workers nationwide.
Prime Minister Datuk Seri Anwar Ibrahim said the adjustment was intended to narrow the gap between wages and productivity while helping workers cope with the rising cost of living. The government has also highlighted the need to address a situation in which household incomes have not increased at the same pace as the prices of goods and services. While a higher starting salary could offer fresh graduates better financial security, Ameer Ali’s remarks underscore the need for a balanced approach that considers workers’ welfare, fair pay structures, graduate employability and the ability of businesses to remain competitive. Ultimately, the effectiveness of any salary policy will depend not only on the wage level introduced but also on how well it aligns with productivity, industry needs and the financial realities faced by employers.
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