Sarawak Bank Employees Union CEO Andrew Lo said that a higher minimum wage in East Malaysia was necessary to reflect the higher cost of living in Sabah and Sarawak, due to logistical challenges and the vast geographical area, reported The Borneo Post.

Lo said the union also supported a regionalised wage model for developed areas like Kuala Lumpur, Johor, Miri, Kota Kinabalu, and Penang, where the minimum wage should be at least RM2,500.

He said while Sarawak contributed significantly to the economy through its natural resources, workers there still faced a disparity in wages compared to those in Peninsular Malaysia.

He was responding to calls from the Associated Chinese Chambers of Commerce and Industry of Malaysia and the Federation of Malaysian Manufacturers for Malaysia to adopt a state-based minimum wage system.

The groups had argued that a blanket minimum wage nationwide might not account for regional disparities in cost of living, economic development, and labour market conditions.

The new minimum wage, a RM200 increase from the previous rate of RM1,500, took effect on Feb 1.

On Feb 2, human resources minister Steven Sim said the government would continue to implement a uniform minimum wage across the country.

He said his ministry’s technical committee had considered various models over the past year, including a geographical-based minimum wage, before deciding on the current nationwide rate of RM1,700.