IPOH: Small dealers and manufacturers in the furniture industry will probably have to close down if the minimum wage policy is implemented for foreign workers.
Perak Furniture Makers Dealers Association vice-president Wong Sun Ming, 59, said it was too costly for employers, especially small dealers and manufacturers, to pay RM900 basic salary as well as costs for levy, accommodation, water, electricity and transportation for foreign workers.
"Under the policy, small dealers and manufacturers, who account for about 75 per cent of businesses in the industry nationwide, will be forced to pay an increase of more than RM500 per head monthly to foreign workers.
"This is a huge sum that many can ill afford and they will eventually face having to go under," he said here yesterday.
Local furniture manufacturer, Goh Jin Keat, 46, who has been in the industry for more than 20 years, said his cost would be between RM2 million and RM3 million annually because of the minimum salary hike.
To meet this cost, he would have to increase prices by 40 per cent which would mean losing customers. He said retrenching workers was not the answer as it would adversely affect production and revenue.
Goh said many small dealers and manufacturers would likely flout the minimum wage rule and eventually close down after they were caught.
Perak Timber Association committee member Loong Kam Shing said the solution was for the government to introduce the minimum wage policy on a gradual basis.
He suggested a stage-by-stage RM100 salary increase for workers annually, to allow employers time to study methods of increasing productivity through other means.
Earlier, a group comprising about 180 employers from Perak Furniture Makers and Dealers Association, Perak Timber Association and Malaysia Pallet Association gathered to petition against the immediate implementation of minimum wage policy.