Higher minimum wage may discourage hiring of fresh graduates, warns business group

The Miri chapter of the Sarawak Bumiputera Entrepreneurs Chamber has flagged potential employment challenges arising from the proposed RM2,500 minimum wage requirement, suggesting employers may shift hiring preferences toward experienced workers over entry-level candidates.

According to the business group, companies facing higher wage obligations may opt to recruit staff who already possess industry experience rather than invest in training programmes for inexperienced graduates. This hiring strategy would allow employers to maintain productivity levels without incurring additional costs associated with onboarding and skills development.

The concern reflects a broader debate surrounding minimum wage policies in Malaysia, where business representatives argue that wage floors must be balanced against employment creation objectives. Policymakers have previously acknowledged the need to support both wage earners and job creation in the economy.

The development underscores tensions between workers' income expectations and employers' labour cost considerations, particularly in states like Sarawak where business chambers wield significant influence in policy discussions. Industry stakeholders are expected to engage further with government authorities on the implementation timeline and potential transitional measures for affected businesses.