The Impact of Minimum Wage Policy on Small Medium Enterprises’ Productivity in the Manufacturing Sector

Objective – This study's aim is to identifies the minimum wage policy implementation and its impact on SMEs in Malaysia. It addresses the question of the level of SME's awareness and their readiness towards the implementation of the policy and improving productivity. Methodology/Technique – Data were collected through questionnaire distribution and literature study. Analysis was conducted via a descriptive method. Findings – The solutions identified in addressing the problem include the need to increase labour productivity, lower operational costs and change organizational methods. Novelty – The discussions of this paper provide an in-depth understanding of the issues related to how the policy affects company's competitive advantage and financial performance. Type of Paper: Empirical