KUALA LUMPUR (Dec 1): The Small and Medium Enterprises Association (Samenta) has urged the government to get inputs from SMEs on the Progressive Wage Model prior to implementing the trial run next year.

National president Datuk William Ng said the quantum of increment to be suggested by trade unions and groups representing large employers may not be reflective of the financial capability of SMEs.

Furthermore, any increment of productivity and profitability in any sector may not reflect the disparity in productivity gained by larger firms and SMEs, he added.

In a statement, Ng urged the Economy Ministry to quickly bring the conversation to the SMEs, which may or may not be represented by the employer associations, and whose specific needs and challenges may not have been adequately represented in the policy discussion surrounding the Progressive Wage Model.

Ng noted it is a deplorable state of affairs that more than half of all Malaysians are earning below subsistence wage and it is a common myth that SMEs do not want to pay more for talents with the right skills.

"In our recent survey in September, two out of three SMEs named talent shortage as their primary challenge.

“As such, no right-thinking SME owner would hold out on paying more to workers if their business margins permit it,” Ng said.

Ng said if the government is concerned about reducing income inequality in Malaysia, forced wage increments must not be the only tool.

"To force businesses, especially SMEs, to pay more without a concurrent, sustained, and evidence-backed increase in productivity, would only be converting the low wage problem into a low margin problem that our SMEs are now encountering," he said.

Samenta is supportive of any effort to raise the income of Malaysians while at the same time remaining committed to supporting the Madani Economy and raising the base-level for Malaysians.

The Progressive Wage Policy White Paper was tabled at the Dewan Rakyat on Nov 30.

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