Budget 2027: Higher wages to boost purchasing power, productivity, say experts
Economists in Malaysia suggest that the 2027 Budget's minimum wage increase to RM2,000 and higher starting salaries for graduates will boost productivity and domestic demand. Experts emphasize that these changes should be supported by digitalization and worker training to help businesses manage costs.
Why it matters
Wage policy adjustments are critical for economic growth, inflation management, and addressing income inequality within a developing economy.
KUALA LUMPUR: The minimum wage increase from RM1,700 to RM2,000 a month and the RM2,500 starting salary for semi-skilled workers and graduates have the potential to boost purchasing power and improve the country's wage structure, say experts.
They said the initiatives announced by Prime Minister Datuk Seri Anwar Ibrahim in Budget 2027 on Friday (Oct 9) would ensure remuneration is more commensurate with workers' qualifications and skills.
Universiti Teknologi MARA (UiTM) Economics and Financial Studies Department senior lecturer Dr Mohd Rahim Khamis said paying salaries commensurate with qualifications and skills would boost productivity and contribute to economic growth.
"When workers are paid according to their qualifications and skills, it will increase their productivity. This, in turn, allows them to enjoy an income that matches their output, indirectly impacting the country's economic growth," he told Bernama.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in