Job numbers are not the primary concern in Malaysia and we have too many unskilled workers — millions of whom are foreigners
WE NEED to create well-paying jobs and reduce our chronic dependence on low-skilled foreign labour.
If the government can design and deliver policies to this effect, they will win many votes.
No easy feat but the two-pronged objectives are long overdue.
It could have been one of the supportive planks of Malaysia’s third Prime Minister (PM) Tun Hussein Onn, who administered the nation from 1976 to 1981. It definitely should have been in the national playbook of his successor, Tun Dr Mahathir Mohamad, PM for 22 years.
But, alas, it did not happen. Most Malaysians still take home low wages.
In 2022, the median monthly salary and wage was RM2,424, equivalent to 15-month salary for an entry-level car from Proton Holdings Bhd or 10-years plus salary for a house worth RM300,000. In the same year, the average monthly salary and wage was RM3,212, according to the Statistics Department (DoSM).
The few years swallowed by the health crisis wrecked by the Covid-19 pandemic and the political circus after the fall of Dr Mahathir’s second term, this time under the Pakatan Harapan (PH) banner, robbed the nation of any potential leeway to address the job issue.
Now, with some relative political stability, the leadership should seize the opportunity to address the job quandary.
At this moment, we hear our politicians and economists harping on the GDP. This chasing after the GDP dragon is old school.
The GDP number, which captures the sum total of all that the economy produces, has its place and importance in the scheme of things. However, it does not tell you much.
The real story is in the jobs. How many jobs were lost? How many jobs were created? And the quality of jobs? These questions reverberate on the ground. They translate directly to the mood of the nation.
You don’t need to be an economist to know the importance of jobs. Job creation is critical. Good jobs help people to build themselves up, with stronger skills, higher and more stable incomes, and a sense of accomplishment and promise, remarked an economist.
Job is a key statistic eagerly watched in the US.
“[Alan] Greenspan once told bankers that he would personally call the officer on the labour desk to get the number. That’s how important the job number is,” said a banker. The US economist served as the US Federal Reserve chairman from 1987 to 2006.
In our case, the job numbers are not the primary concern. We have in our mid a few million foreign workers, both legal and illegal, mostly in the low-wage and low-skilled environment. We have too many unskilled workers. And the influx continues. Go to the airport and you will see hundreds of them queuing up daily.
We are seeing some movement on labour reform. The most recent was Economic Minister Rafizi Ramli presenting the white paper on the proposed progressive wage policy.
When debating the paper last week, he said that Malaysian employees, a huge chunk of them working for micro, small and medium enterprises (MSMEs), are experiencing underemployment. At the same time, there is wage compression for entry-level workers after the implementation of the minimum wage policy.
But more needs to be done in a fast-changing world. The digital revolution is already upon us.
The world of work is on the precipice of a technology-driven productivity boom, observed an economist in a recent report by the World Economic Forum (WEF). It noted that leaders in business and policy are being pushed to respond to high-speed innovation and the impending transformation of the global workforce. The direction they choose can lead either to job displacement, or — the better choice— the creation of good jobs that improve standards of living, it added.
This is worth repeating: The world of work is on the precipice of a technology-driven productivity boom.
We missed our chance earlier to move up the ladder in creating better jobs. Our politicians and policymakers had then steered the nation towards labour-intensive jobs. Now, things are only going to move faster. Artificial intelligence (AI) is already a buzzword. To boot, we have innovations in generative AI and foundation models.
It goes without saying that we need to ride this new wave.
This brings us to the next major policy decision — reducing dependence of foreign labour. As a starting point, the unity government under PM Datuk Seri Anwar Ibrahim needs to make some bold decisions. They should drastically reduce foreign labour in this country.
Cut it down to, say, one million, for a start. In the foreign labour mix are barbers. Who benefits? Surely not the barber from the foreign land. He probably gets paid peanuts. The groups benefiting from the constant flow are the business owners and the people involved in bringing in these foreign workers.
The business owner is minting money because he can run his business on cheap labour. If you take the foreign worker out of the equation, the business owner will either have to pay more for local workers, or close shop. If he decides to close shop, it will provide opportunities to want-to-be entrepreneurs to have a crack at the business.
When you fuel up next, just ask how much the pump attendant — likely someone from Bangladesh — earns. Peanuts! A pump attendant, with more than a decade’s experience, told me he earned close to minimum wage. But the pump owner has changed cars many times over!
A reduction in foreign labour would force corporations and companies, big and small, to upskill. They would be forced to look at how to make technology work for them. In the process, they would, invariably, increase workers’ productivity.
Neighbouring Singapore underwent the process in the 1980s. If Malaysia had followed suit, we would be living in a very different country today. Let’s not miss the next wave.
- Habhajan Singh is the corporate editor at The Malaysian Reserve.
- This article first appeared in The Malaysian Reserve weekly print edition