What Malaysia's wage-hike means for pricing
Malaysia is a major producer of wood furniture. The United States imported close to $329 million in furniture from Malaysia in the first six months of 2012.
That more even than from Indonesia. Malaysia is an especially important source of casual dining furniture.
A major minimum wage law enacted last year took effect on January 1. The New York Times reported in May that the minimum wage was set at 900 ringgit a month, or $297.
Some reports we've seen say the average furniture worker before the wage increase was making about $180 a month. It's important to also keep in mind that the wages of in-country suppliers to these furniture factories will go up as well, amplifying its effect.
Furniture product costs may increase by 10%, according to some estimates, but I'm not quite sure how the overall price will be absorbed. Some factories have received three-to-six month deferments to begin paying the wages.
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