PETALING JAYA, July 12 — Traders should not use the minimum wage policy, implemented on July 1, as an excuse to increase food prices.
Labour union and consumer groups said this was because the impact brought about by the new wage policy was minimal and should not be abused by business operators to justify increasing prices of food.
Malaysian Trades Union Congress secretary-general N. Gopal Kishnam said there was no justification for the increase because minimum wage only affected a small portion of the workforce.
“The revised minimum wage only affects people in the lower income brackets, which is about 10 per cent,” he said.
“However, if you increase the prices of consumer goods it will impact people across the board.”
Gopal said it was also not right to increase consumer prices because labour cost was “already very low”, especially in the manufacturing sector.
“Instead of increasing prices, small and medium-sized enterprises should focus on improving their productivity, to overcome a slight rise in their cost,” he said.
The Minimum Wages Order 2016 (MWO 2016) came into effect on July 1 with minimum wages set according to regions — RM1,000 per month or RM4.81 per hour for Peninsular Malaysia, and RM920 per month or RM4.42 per hour for Sabah, Sarawak and Labuan.
Federation of Malaysian Consumers Association (Fomca) secretary-general Datuk Paul Selvaraj said business operators were already making high profit margins compared with their counterparts abroad.
“The component of wage of the total cost is low while profits are high. It is unreasonable to increase prices, claiming it is because of the salary,” he said.
Selvaraj said the Domestic Trade, Cooperatives and Consumerism Ministry’s enforcement division should look into the cost structure, supply and consumer demand to prevent any unreasonable price increase by food operators.
“This is to ensure that the price hike is justified and not because of profiteering,” he said.
“Unless the government continuously takes action against those who profiteer, they will think they can do as they please.”
The groups were responding to Malay Mail’s front page report yesterday which highlighted that another round of price increases had begun with operators raising prices to counter the minimum wage. Those who Malay Mail spoke to said they were struggling to cope with escalating overheads.
Malaysian Islamic Consumer Association secretary-general Datuk Dr Maa’mor Osman said price hikes should only happen if businesses were struggling to cope with the rising cost of production.
“While price hikes by business operators should not happen, as consumers will be badly hit, the government should also come up with a plan to help businesses cope with the rising cost of production,” he said.
“We should look at the entire chain of supply. We are importing a lot of food items and this is why the cost is increasing.”
Dr Maa’mor said there are many food items produced locally which are more expensive compared with neighbouring countries.
“Livestock farmers tend to import chicken feed and this is why production cost is high. We must stop relying on imports and find ways to cultivate cheaper food items locally,” he said.
