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By Mihar Dias November 2024
The decision by mamak restaurant operators in Johor to increase food prices by 5% in response to rising operational costs, including a new RM1,700 minimum wage, raises significant questions: is this a necessary adjustment, or are customers being milked under the guise of economic challenges?
For context, the minimum wage hike to RM1,700, set for February, aligns with government efforts to ensure a fairer income for the working class.
In principle, it’s a commendable move, especially considering Malaysia’s higher cost of living. However, the impact on small businesses, especially those heavily reliant on labour, is real.
These businesses, including many mamak establishments, argue that the wage increase, along with other costs like EPF contributions for foreign workers, levies, and accommodations, adds substantial financial pressure.
But here’s where the waters get murky: is a 5% price hike truly reflective of the increased wage burden?
Or is it an opportunity for some business owners to pad their margins, capitalising on customers’ lack of insight into operating costs?
Realistically, a 5% hike might seem minor, but for regular customers—who often choose mamaks for affordable meals—these small increments add up over time.
Moreover, it’s noteworthy that Hussein Ibrahim, the secretary of the Johor Indian Muslim Entrepreneurs Association, mentioned that they could reduce dependence on foreign workers by hiring locals at salaries up to RM2,500.
If local labour is viable and may potentially reduce dependency costs, why not take that route instead?
If the primary issue is operational cost, making the shift could stabilise prices for customers and keep jobs local.
Ultimately, there is a balancing act between sustainable wages and fair pricing. While mamak operators need to stay afloat, transparency is key to building consumer trust.
Justifying price hikes transparently could maintain loyalty; otherwise, this increase might come across as an attempt to milk customers under the pretense of new wage laws.
It’s essential for the restaurant association to show how these added costs genuinely impact their bottom line, so the public knows they’re not paying more just for the sake of paying more.
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