Why wage subsidy is very important to the economy.
We recently saw the very hotly debated i-Sinar. Some say the requirements are too tough. Frankly, if one does NOT need it as a last resort, please do not apply for it. This is for a new handphone or downpayment for a new car. This is for people needing the money for meals because their income has stopped. Period. If there are still other ways, try other ways first. Anyway, I think I am talking mostly to myself but it’s okay, this is my blog, I can talk all I want.
2.64 million employees to benefit
We have an announcement about wage subsidy where a total of RM12.5 billion has been approved for a total 322,177 employers and 2.64 million employees. News in themalaysianreserve.com here. Briefly, on average every employer who gets this are hiring around 8 people. This wage subsidy is a super important component to the economy but this is NOT aimed at making employers profitable. Its sole aim is to keep everything as normal as possible. Businesses to still operate and employees to still have their jobs. Perhaps with a lower pay even but the subsidy comes in as additional assistance.
Much of these would be spent by the working people and this will provide a multiplier effect to the economy. Just in case some may not understand why RM12.5 billion may have an effect of up to RM50 billion to the economy here’s a brief. One gets a salary of RM1,500. Spends the money at the nearby convenience store. The convenience store could stay open and they will order from the wholesaler. The wholesaler can stay alive and they will order from the manufacturer. The manufacturer could continue operations and pay their workers who will use the money to repeat the process of consumption.
Savings for rainy days
This is why any monetary assistance has to be as direct as possible to the source versus just giving any business a huge amount of money. Seriously, we kept telling people to have 6-12 months of savings so that we could survive some months when we lose our jobs. I just want to remind all businesses again that survival is a joint responsibility as well. Save for rainy days should be applicable to all. Not just the employees themselves.
I do think the COVID-19 vaccine is probably coming within Q1 of 2021. Fully vaccinating everyone will definitely take time but once that starts, the sentiment would already turn positive. That’s just a typical human reaction. When we FEEL safer, we tend to be more confident and when we are more confident, the business climate would also change. Just look at the stock market. It’s definitely not due to fundamental all the time…
In fact by then, travel bubble may just be extremely common and if we refer to recent travel bubble between Hong Kong and Singapore as a reference, people will be ‘revenge travel.’ They just want to fly to somewhere to spend their time and money! Too bad, this has been postponed. Else, both Cathay Pacific and Singapore Airlines would have benefited tremendously. By the way, if we did not notice yet, the most biggest impact is because no travel is allowed.
I do wish that everything will become a non-issue within Q1 2021. We have already been ‘played’ by COVID-19 since March 2020. Time to leave it behind and hopefully learn that when we need to stay at home to beat something, we must stay home. Oh yeah, whatever election better not happen and ANYONE even trying to do things which will cause elections to happen, please just condemn that person okay. STOP supporting only the party you like and condemning the rest. This is Malaysia and kita jaga kita. Cheers.
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