Couriers Association warns of ‘domino effect’ of RM1,500 minimum wage policy

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KUALA LUMPUR (March 25): The Association of Malaysian Express Carriers (AMEC), while praising the government’s decision to implement the RM1,500 minimum wage policy, however, warned of “the domino effect about companies.

In a statement released Thursday, March 24, CHHA President Teong Teck Lean said the move was somewhat drastic.

He said the salary increase of around 25% was not only for the lower income bracket but also included their superiors due to salary scale adjustments for companies as a whole.

Teong, who is also the CEO and Managing Director of GD Express Carrier Bhd, said that with intense competition between domestic and foreign players in the market, any policy without systematic oversight would make it difficult for industry players to maintain business.

He added that courier industry service providers are drastically cutting prices below cost to stay operational.

He explained that local players are not able to compete with foreign service providers on a level playing field as the latter are backed by international multinational corporations that can absorb longer-term losses unlike local companies.

Teong said that could lead to domestic service providers, especially courier companies, shutting down because they cannot sustain losses year after year.

“This will directly affect more than 150,000 employees, more than 80% of whom belong to the B40 category (40% lower income).

“More than 85% of these employees are low-income bumiputera. In total, some 600,000 people (including employees’ families) will be affected when the playing field is not level,” he said.

Teong said the government, while raising minimum wages, must take a more active role in ensuring fair competition, so that domestic players are able to withstand increases in operational costs.

“It would also help the local courier industry continue to employ and support its workforce for the longer term,” he said.

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