And I particularly like the whole thing of being boss. Boss and employee… It’s the slave quality that I find very alluring.
– Hugh Grant, English actor
Malaysia is caught between the devil and the deep blue sea with regard to foreign workers. Stop the reliance on foreign workers, which will put many businesses out of business, or continue to rely on the low-skilled foreigners which depresses wages, suppresses productivity enhancements and encourages more low-skilled jobs and prevents the creation of high-skilled and high-paying jobs.
Employers are applying pressure on the government to allow foreign workers to return to Malaysia to help their badly-affected businesses recover from the Covid-19 pandemic.
According to official figures, there are close to 1.5 million legal foreign workers in the country. But what is worrying is that the number of illegal foreign workers could be more than three times the figure.
Why are we so dependent on foreigners to get the work done? Do Malaysians only want easy and high-paying jobs? And avoid dirty, dangerous and difficult work? Or are they simply too choosy?
I came across a few fresh graduates who are not willing to work for anything less than RM1,800. They would rather stay home and spend their time watching Korean dramas or engage in daily gossips. Spoiled brats!
Some of these youngsters do not even have proper communication skills, be it in Bahasa Malaysia or English. Well, it could be the education system!
Institute of Malaysian and International Studies research fellow Dr Muhammed Abdul Khalid argues that the notion that locals are reluctant to work in low-skilled jobs, hence the reason to recruit foreigners, is simply not true.
Citing official figures, he says more than half (54 percent) of the low-skilled employed labour force in 2019 were locals.
And what about the perception that local workers are choosy?
“Also not true. Even graduates work in jobs that don’t require a degree. The share of graduate workers who are employed in semi-skilled occupations (sales and services worker/clerk) has increased from 22 percent in 2016 to 26 percent in 2019.
“And here they have to compete with foreign workers too. The percentage of foreign workers in semi-skilled jobs remained high at 14 percent (1.2 million workers) in 2019, although marginally lower than in 2010 (15 percent).”
Putrajaya’s freeze on foreign workers until December-end this year has not only badly affected the manufacturing sector but also the construction, plantation and services sectors.
Taking the plantation sector, as an example, the industry faced a shortage of 40,000 workers in 2020. The sector reportedly also faced a colossal RM10 billion loss last year, which is not recoverable.
Bank Negara Malaysia (BNM) in its Economic and Monetary Review Report 2020 released last month said the heavy reliance on foreign labour had put a damper on the government’s plan to create more highly-skilled and high-paying jobs.
“This is evidenced by the fact that industries which employ a higher share of low-skilled foreign workers tend to have lower productivity levels, relying on longer working hours to produce output.
“Furthermore, unchecked reliance on low-skilled foreign workers potentially introduces distortions to wage-setting mechanisms, leading to a suppression of local market wages,” the report said.
The government appears to be at its wits’ end. Policies to significantly reduce foreign workers will certainly affect the survival of companies.
The BNM report said that in 2019, more than 30 percent of the workforce in the agriculture sector were foreigners, and more than 20 percent in both the construction and manufacturing sectors. And almost half of the low-skilled workers were foreigners. As for semi-skilled jobs, where the bulk of jobs are, more than one in 10 were foreigners.
Dr Shankaran Nambiar, a senior researcher at the Malaysian Institute of Economic Research (MIER), cautions that any policies which Putrajaya has in mind have to be gradual.
“This might be a hard time to introduce a drastic policy because this is a time when the government would not want any outcome that results in a drop in the gross domestic product.
“For example, restaurants and food outlets are dependent on foreign labour and should be allowed to continue to be so; but manufacturers should be incentivised to move ahead and told that now is a good time to do so.”
Whatever the situation or consequences, something has got to be done to reduce the overdependence on foreign labour.
Left to take their own action, companies will definitely skip more expensive processes when cheaper ones are easily available.
As Dr Shankaran suggests, “There are two options. One, for the government to use the pandemic as a window to introduce policies on the use of migrant workers, and two, to persuade the private sector, using the pandemic as an illustration on why reform has to be undertaken.”
It’s about time that our employers were told they should work towards shedding the “slave drivers of Asia” tag.
Meanwhile, perhaps some good news for employers. Human Resources Minister Datuk Seri M. Saravanan announced yesterday that the recruitment of foreign labour would begin after Dec 31, 2021.
