OUT of the 200,000 Malaysians who commute to Singapore daily, some 40% of them do mid- and low-skilled jobs, such as labourers, machine operators and cleaners.

This is one of the findings in the latest study examining youth employment by government-linked think-tank the Khazanah Research Institute (KRI).

KRI said that contrary to popular belief, young Malaysians will do 3D (dirty, dangerous and difficult) jobs – for the right wages.  

The reason young Malaysians shun them at home is because these jobs don’t pay enough. Malaysian employers have a ready supply of foreigners who will do them at lower salaries, KRI said in its study From School to Work launched yesterday. 

As long as Malaysia maintains its cheap foreign labour policies, it will always struggle to provide enough well-paying jobs for youth, said KRI.  

And as long as these policies are in place, the current Pakatan Harapan government will find it hard to turn Malaysia into a high-income nation – a goal that has eluded past Barisan Nasional administrations.  

The government also needs to change labour laws to offer more social safety nets and protection for freelance workers in the informal gig economy, as these types of jobs are growing at a faster rate than more traditional forms of employment, KRI said.  

The gig economy, which includes freelancers, self-employed or those working within families, is becoming a major source of jobs, KRI said.

But these “gigs” or jobs are often not protected by labour laws, have irregular incomes and lack insurance and retirement savings, it said.

At the same time, access to cheap foreign labour has discouraged Malaysian companies in the formal sectors, such as manufacturing and services, from using technology to increase productivity and to pay high wages, said KRI visiting senior fellow Dr Lim Lin Lean.

Companies, especially export-oriented ones, have often used the excuse that in order for Malaysia to compete with neighbouring countries, it has to keep production costs low, including salaries and employment benefits.

This approach, said Lim, has kept the country in the middle-income trap.   

“Is it the only way to be competitive that you have to have cheap labour?” said Lim after launching the study in Kuala Lumpur yesterday.  

“Do we want to keep along the path of a race to the bottom? It’s been a long-term issue that one of the reasons we cannot make it to a high-income country is because we keep using cheap labour and have little incentive to innovate.

“Other studies have shown that the use of technology to increase productivity among Malaysia companies is constrained because of this cheap foreign labour.

“A review of the country’s cheap labour policy is fundamental for the country to tackle its migrant worker issues while improving jobs and incomes for young Malaysians and reducing the lure of 3D jobs to Singapore.

“At a more attractive level of wages, Malaysians would not shun 3D jobs,” the study concluded.   

The study also revealed that the increasing number of youth in informal, freelance jobs and those self-employed in the digital economy is a trend the government needs to pay attention to, given the difficult and precarious nature of these jobs, KRI said.

The proportion of workers in these “non-standard jobs” is 45% of young workers between the ages of 15 and 19, 20 to 24 (32%) and 25 and 29 (20%).

To protect them, retirement and insurance schemes should be linked directly to workers while labour laws should also be amended to include informal work, KRI said. – December 13, 2018.