26th August 2026 - 3 min read
The Malaysian Trades Union Congress (MTUC) wants the minimum wage raised from RM1,700 to RM3,100, an 82.4% increase that it says is needed to keep up with the cost of living. The Federation of Malaysian Manufacturers (FMM) has rejected the proposal, warning it could put too much pressure on businesses and the wider labour market.
The debate comes as the government reviews the current minimum wage, ahead of the next mandatory review due in February 2027.
MTUC secretary-general Kamarul Baharin Mansor said RM3,100 reflects the rising cost of food, housing and transport. He also pointed to workers who stay on RM1,700 for years without a raise, saying pay should rise as workers gain experience.
For employers, such a large increase could affect more than just workers currently earning the minimum wage. Businesses may also need to raise salaries for supervisors and more experienced staff to maintain the pay gap between different levels of workers.
That is one reason FMM has pushed back on the proposal. FMM president Jacob Lee Chor Kok said the RM1,400 increase would be unprecedented, with minimum wage increases having been more gradual in the past, from RM800 and RM900 in 2013 to RM1,700 in 2025.
FMM also compared the proposed rate with minimum wages in neighbouring countries, which remain lower: about RM570 to RM820 in Vietnam, RM1,080 to RM1,280 in Thailand, and around RM1,300 in Metro Manila.
MTUC’s push comes as data shows younger workers are still earning less than they did before the pandemic. In 2024, workers aged 25 to 29 had a median monthly salary of RM2,095. That’s still 5% below the RM2,206 median recorded for the same age group in 2019, according to the Department of Statistics Malaysia. This was the only age group whose median pay had not returned to pre-pandemic levels.
Bank Negara Malaysia deputy governor Marzunisham Omar has also warned that Malaysia is seeing wage compression, with the pay gap between entry-level workers and more qualified employees becoming smaller. He said starting salaries for qualified professionals are now close to the minimum wage, while around 35% to 36% of workers are in jobs that require lower qualifications than they actually have. This suggests Malaysia still does not have enough high-skilled jobs to absorb its graduates.
Stagnant pay also affects what young workers can afford to buy, particularly housing. Dr Wan Arnidawati Wan Abdullah of the Malaysian Research Institute on Ageing said Malaysia’s house price-to-income ratio is around 4.7, compared with 3.0 as the level generally considered affordable. In other words, homes remain expensive relative to what people earn.
That helps explain why a higher salary does not always mean a better financial position. If wages rise while housing and other living costs remain high, workers may see little improvement in what they can afford.
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Iman writes about personal finance with curiosity. She is interested in the stories behind money, the hesitation around big decisions, and the small habits that shape financial futures. Off the clock, she is either dissecting a film or climbing her way up the leaderboard in her favourite games.
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