Labour issues, job creations not adequately addressed

Expert says unemployment and consumption are 2 key issues that Budget 2021 needs to tackle in short run

pic by TMR FILE

BUDGET 2021 falls short of addressing labour and job creation issues amid the increasing number of unemployment this year, experts said.

Under the government’s Employment Generation Guarantee Scheme (JanaKerja) initiative announced last week, the government aims to create 500,000 new job opportunities including skills development and retraining programmes worth RM3.7 billion through JanaKerja.

The government also showed its commitment to job creation with the formation of a National Employment Council to be chaired by the prime minister himself.

However, economists remain sceptical about the success of the plan.

Economist Zouhair Rosli argued that the only measure under the JanaKerja that provides job creations is MySTeP or Short-term Employment Programme.

With an allocation of over RM700 million, the initiative will offer 50,000 thousand job opportunities on a contract basis in the public sector and government-linked companies starting January 2021 — 35,000 jobs opportunities in the public sector with prioritised positions such as nurses, medical attendants, social welfare officers and temporary teachers, and another 15,000 jobs in technical and financial fields, as well as extending the opportunities for new graduates in apprenticeship programmes.

The 50,000 employment opportunities are small in number, Zouhair said, while the other job initiatives only “encourage” private employers to hire and provide training to staff.

“Unemployment is already going down for the past few months. What we need to be more concerned about is the structure of the labour market, which was already bad even before the pandemic. The government needs to address this increasing underemployment and not enough jobs for the graduates with fair pay,” he said.

Institute for Democracy and Economic Affairs senior fellow and Centre for Market Education CEO Dr Carmelo Ferlito voiced similar sentiment, saying the lack of labour supply at the moment is for jobs that do not require reskilling or upskilling such as 3D (dirty, dangerous, difficult) jobs.

“Eventually, we would need de-skilling. But obviously, that is not the direction where we want to go. But what is the point to re-skill people if we do not have job openings that require those skills?

“We need a wider strategy for job creations, which starts with an economic growth strategy — and surely not with kicking out multinational companies. That strategy is missing. Without that, the strategy of reskilling is useless,” Ferlito told The Malaysian Reserve (TMR).

Similarly, Dr Geoffrey Williams, an economist from Help University said a lot of the allocations are for training and expected to go to training companies first, instead of trainees.

“Training does not provide employment. Just because people go to training programmes does not mean they get jobs when the programme ends. It must be related to certified programmes to have any impact on their career,” Williams said.

Universiti Utara Malaysia senior lecturer Muhammad Ridhuan Bos Abdullah said training may take a long time — for example, a six months programme — to have a positive effect and chances are mismatch happens.

“Previously during the 2008 crisis, we gave training and absorbed unemployed individuals for six months in the public sector, but that was not quite helpful for those technical workforces with long working experience.

“We need a talent pool that can contribute and make a spillover impact on the economy quickly in the short term, let’s say for the first three to six months,” Muhammad Ridhuan Bos told TMR.

Ferlito said the main flaw in the budget is a general strategy for economic growth that is missing.

He said the budget probably provides too big a share to civil servants, but the kind of handouts given generally have a limited effect if they are not accompanied by a more general strategy for growth.

He further said handouts such as subsidies cannot be prolonged ad libitum.

Muhammad Ridhuan Bos said when companies downsize or relocate operations, for example, the bottom 40% (B40) could adopt much quicker into the labour market for the low-skilled and semi-skilled jobs as opposed to the middle 40% (M40) in executive and managerial positions, due to the country’s economic structure.

On that premise, he said the budget has indirect support for M40, but direct incentives to the group are also deemed as critical as for B40.

“We can see indirect incentives. M40 needs a direct injection. Consumption contributes almost 60% to the GDP and of that, M40 is the biggest contributor.”

He said unemployment and consumption are two key issues that the budget needs to tackle in the short run.

Lawyer Lim Wei Jiet said a mere RM500 for front liners while propaganda-arm Jasa (Special Affairs Department), as many understood, gets a “whopping” RM85 million further reinforces the government’s misplaced priorities.

“We must remember that tackling Covid-19 is a prerequisite before the economy can recover. It is disappointing that Budget 2021 does not appear to be anchored on this principle,” Lim told TMR.

Galen Centre for Health and Social Policy CEO Azrul Mohd Khalib said the pandemic has put certain groups at risk of being left behind and making them more vulnerable than ever before.

“New and increased funding, not less, should be invested into the prevention, treatment and management of these diseases, particularly health literacy. Yet, we see that the proportion of the health budget is more or less the samTMR.

Read our earlier report here