THE number of Malaysians retrenched arising from the Covid-19 pandemic will hit at least a million this year, said industry experts.

The worst-hit sectors are tourism, manufacturing and the micro-scale small and medium enterprises (SMEs), they said.

Putrajaya must do more to support the employers and their employees to wade through this difficult period, they added.

Malaysian Employers Federation executive director Shamsuddin Bardan told The Malaysian Insight that as of March end, more than 5,000 were retrenched from the tourism industry whereas manufacturers had let go of 3,000 employees.

Micro SMEs, especially those in retail, are expected to be badly affected, he said.

“We expect half of the number of these (small-time) employers won’t be able to survive because of the MCO (movement-control order) and EMCO (enhanced MCO),” he said, adding that there are about 650,000 such businesses.

Shamsuddin projects the number of retrenchments for 2020 to hit a million.

This coupled with the more than 600,000 jobless and fresh graduates entering the workforce could take the total unemployment number to up to two million.

To retain jobs, he said the government should support businesses by pumping in more money.

“If you look at the wage-subsidy programme, the amount is not that high. This is still less than 17% of monthly wages of employees in the private sector and, of course, we expect the government to put in more money to support the employers to pay the employees so the employees could keep their jobs.”

He also said increasing the allocation of the government’s employment-retention programme (ERP) from RM120 million to RM240 million is still not be enough to cover all employers in need of support to retain their employees.

On the employees’ part, he said they should also accept reduced benefits and pay cuts to keep their jobs

The road to recovery could take a long time, he said, citing the World Trade Organisation’s forecast that the pandemic could wipe out a third of global trade.

The WTO forecast the coronavirus to have a greater devastating effect on trade compared with the financial crisis more than a decade ago.

Global trade is expected to shrink between 13% and 32% owing to the uncertain economic impact from the health crisis.

“I would say it is very difficult and the road to recovery will take a long time and the negative of Covid-19 will linger on up to next year,” he said.

Meanwhile, SME Association president Michael Kang also concurred that job losses could reach a million, as more than two million employers have already applied for the ERP.

Kang expects the number of job losses to increase in the next three to six months across all sectors.

Unemployment in Malaysia increased by 17.1% in March due to the MCO to stop Covid-19 transmission, the Statistics Department said recently in its labour report.

The percentage increase was from 521,300 jobless people in March last year to 610,500 people in the same month this year.

This puts the March unemployment rate at 3.9%, the highest rate of joblessness since 1986 when it was 7.4%, said chief statistician Dr Mohd Uzir Mahidin in a statement.

A quarter-to-quarter comparison showed that unemployment for the first three months of this year increased to 3.5%, compared with 3.2% in the fourth quarter of 2019.

This made it the highest unemployment rate recorded since the second quarter of 2017, involving 546,600 people, Uzir said. – May 11, 2020.