Prime Minister cum Finance Minister Datuk Seri Anwar Ibrahim announced the increase of minimum wage from RM1,700 to RM2,000 during tabling Budget 2027 in Parliament, citing the need to bridge the gap between worker productivity and wages as the cost of living continue to rise. Micro, small and medium enterprises (MSMEs) with annual sales revenue below RM50 million will be exempted from new minimum wage requirement to give them more room to manage their business. Prime Minister said “Compensation at employees accounted for just 33.9% of Malaysia's gross domestic product (GDP), highlighting the gap between economic output and the share going towards workers' incomes. The existing minimum wage only raises the income floor for workers, while skilled employees continue to face wages that do not adequately reflect their qualifications. The proposed reform aims to address that gap by setting a higher starting baseline for these categories.”
My friend, Senator Syed Shahir Syed Mohamud, former President of Malaysian Trade Union Congress (MTUC) in welcoming this good news, revealed that “The key to all the minimum wage is the value of money as purchasing power for livelihood. I have been hoping the Prime Minister to narrow the gap of private sector employees' minimum wage with the living wage of Government-Linked Companies (GLCs) & Government-Linked Investment Companies (GLICs) that rising from RM3,100 to RM3,400 per month. For worker to live with a family in KL needs RM3,000 for living expenses.”
I agree with Senator Syed that the future living wage in Malaysia should be benchmarked at RM3,400 per month, as officially introduced under Budget 2027. Unlike the national minimum wage, this living wage standard applies specifically to to certain sectors while serving as a target framework for broader wage reforms. In fact, under the Ministry of Economy's broader labor market goals, Malaysia is aiming to push the nationwide median monthly salary to RM3,500 by 2030. However, it does not guarantee a standard of living equally across Malaysia, with multiple dependents.
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