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New Minimum Wages Will Force Coffee Shops To Raise Prices, Reduce Workers

The Sabah West Coast Coffee Shop Association yesterday appealed to the government to consider postponing the increase in minimum wages in view of the bad economy. Its chairman, Yong Chee Yun, said raising the minimum wages would have a major impact as coffee shops would let go some of their workers to cope with the higher operational costs. Furthermore, Yong said the prices of food and drinks would also increase when the new minimum wages came into effect.

He said this when asked to comment on the Minimum Wages Order 2016 (MWO 2016) which will take effect on July 1 this year. In MWO 2016, the minimum wages are set at 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.

Yong said the volume of customers patroning coffee shops had decreased recently, as many people found it hard to find a job in the current economy. He said the implementation of the Goods and Services Tax (GST) had also forced several coffee shops into closure.

This year, four to five coffee shops in Kota Kinabalu, as well as four coffee shops in Papar have closed down because of GST.

Yong said the association had raised its objections when the minimum wage was first implemented two years ago in 2014, at RM800 for East Malaysia, but the government had not listened. He pointed out that many coffee shop workers would be retrenched while the prices of food and beverages would also go up with the new minimum payouts.

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