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Malaysian Prime Minister Anwar Ibrahim. / EPA, Yonhap News

Malaysia is considering raising the minimum wage and improving pay for skilled labor as key policy measures ahead of the announcement of its 2027 government budget on the 9th of next month.

According to Malaysian daily The Star on the 26th local time, Prime Minister Anwar Ibrahim signaled at a Universiti Teknologi MARA (UiTM) alumni event that day that the upcoming budget will include robust policies ensuring fair wages and jobs commensurate with educational and skill levels.

"While national productivity has risen steadily, wage growth has failed to keep pace," he said, stressing that the government will pursue wage reform policies to ensure gains in productivity translate into real income growth for workers.

Malaysia's statutory monthly minimum wage currently stands at 1,700 ringgit (about 570,000 won), which took full nationwide effect in August 2025. The government has already raised the monthly minimum wage to 3,100 ringgit (about 1.03 million won) for government agencies and government-linked investment companies (GLICs), and is reportedly weighing further hikes in the private sector.

Markets are also giving weight to the possibility of an additional increase. CGS International Securities (CGSI) Malaysia recently projected in its report titled "Budget 2027 Preview: Staying the Course" that if the government maintains its wage increase trajectory, an additional bump of 200 to 300 ringgit (about 70,000 to 100,000 won) per month would be feasible.

If realized, this projection could see the monthly minimum wage rise to as much as 2,000 ringgit (about 670,000 won).

Pay raises for highly skilled labor are also a key focus of discussion. Malaysian Human Resources Minister Ramanan hinted on the 22nd that "there will be good news" regarding the 2027 budget, suggesting the potential for improved pay levels for graduates of technical and vocational education and training (TVET).

He stated that consideration could be given to raising salaries for certain skilled workers—currently in the 8,000 to 12,000 ringgit (about 2.68 million to 4.02 million won) per month range—up to 16,000 ringgit (about 5.36 million won).

Wages are also cited as a structural challenge facing the Malaysian labor market.

According to the Department of Statistics Malaysia, about two-thirds of Malaysian workers are employed in semi-skilled or low-skilled occupations. Their median monthly incomes stand at 2,223 ringgit (about 740,000 won) and 1,758 ringgit (about 590,000 won), respectively.

A study by the nonprofit policy research organization Khazanah Research Institute also found that 7 out of 10 Malaysians do not feel the benefits of national economic growth.

Former Klang MP Charles Santiago emphasized, "Despite national economic expansion, many citizens are not fully sharing in its benefits," adding, "The 2027 budget must serve as a turning point to overhaul Malaysia's low-wage structure."

                                                                                                          Hong Seong-a