As many as 77,988 from various sectors were retrenched from March to Oct 16
pic by MUHD AMIN NAHARUL
THE number of unemployed Malaysians could hit the one million mark by the end of 2021 if there is no serious change in policy from containment to recovery.
With more lockdowns in Europe and borders closed in Asia, Institute for Democracy and Economic Affairs senior fellow and Centre for Market Education CEO Dr Carmelo Ferlito believes that the worst is yet to come.
“It is hard to estimate, we should see which measures are implemented in Budget 2021.
“I hope that the budget will halt a new hiring procedure for new expat positions with wages below RM15,000,” he told The Malaysian Reserve (TMR).
As many as 77,988 Malaysians from various sectors were retrenched from March to Oct 16 this year, based on data from the Employment Insurance System.
The data show 11,584 who lost their jobs were in the managerial category, 22,647 in the professional category and 17,019 under the technical and professional category.
In a recent statement, Ferlito said the new procedure to hire expatriates rather than improving the situation for local workers will lead to higher unemployment.
As it involves the renewal of existing visas and of business owners too, it may not only lead future foreign direct investments (FDIs) away from Malaysia, but also prompt multinational companies (MNCs) presently based in Malaysia to move elsewhere, he explained.
“As MNCs hire mostly locals rather than expatriates (which usually are limited to some key top positions), many Malaysian employees will find themselves unemployed.”
Ferlito warned that there will be a spillover effect, where people who have lost their jobs consume less and therefore, generate less income for others as well.
“The effects will not be immediate as relocation processes take time, but the policy would lead to at least an additional 2% in the unemployment figure (without considering the situations of underemployment),” he added.
Ferlito said the budget should also revoke the ban on foreign workers to keep manufacturing firms alive.
He explained that Malaysians have achieved some wealth and their personal expectations would be frustrated if they had to take up 3D (dirty, dangerous and difficult) jobs.
“The budget should focus on attracting FDIs and enhancing operations, taking advantage of the fact that firms are escaping China and that Singapore is also becoming stricter.
“Malaysia should try to attract those capitals rather than stop them. FDIs and MNCs create a lot of opportunities for locals.”
The economic fallout from the pandemic has left more than 800,000 people without a job this year, said Prime Minister Tan Sri Muhyiddin Yassin in a recent statement.
Meanwhile, the Social Security Organisation warned that more than 100,000 Malaysians could be jobless by the end of the year if Covid-19 persists.
As of August 2020, the country’s unemployment rate remained at 4.7%, according to the Department of Statistics Malaysia.
Meanwhile, Emir Research analyst Sofea Azahar said for Budget 2021, the government should extend the Wage Subsidy Programme to retain the workers at least until the first half of next year, particularly for hard-hit sectors such as tourism, aviation and manufacturing.
“Allocation for Penjana (shortterm Economic Recovery Plan) packages should also be increased to extend hiring and training assistance for the industries which are relevant to the youth and unemployed until next year,” she told TMR.
Association of Chartered Certified Accountants (ACCA) lecturer Afifi Abu Hasan Ashaari said unemployment among Malaysian youths is a real issue that the government needs to tackle and solve.
He said many fresh graduates have difficulty securing their dream jobs.
“Currently, many of my former ACCA students are still unemployed although they completed their studies six to nine months ago.
“Perhaps this is due to the current Covid-19 crisis where companies are not hiring,” he told TMR.
Thus, the government should give incentives such as tax benefits to encourage government-linked companies and MNCs to hire young talents, he added.