MALAYSIA is committing economic suicide by freezing new intakes of foreign workers and limiting them to only three sectors, said the Malaysian Trades Union Congress (MTUC).

The country’s largest grouping of private sector unions said these decisions by the Perikatan Nasional government are based on the flawed logic of freeing up factory and service jobs for locals who have been retrenched.

The problem, said MTUC secretary-general J. Solomon, is that such jobs pay wages that are too low for Malaysians to survive especially in urban areas with high living costs.  

“MTUC regards this notion as nothing more than a pipe dream that ignores the reality on the ground,” Solomon said in a statement today.  

“Our feedback shows most Malaysians will only take up jobs vacated by foreigners if they are given a better deal in terms or salaries and benefits.

“This isn’t borne out of any negative attitude on the part of the local work force but simply based on their need to sustain themselves and their families given the current high cost of living and the revised poverty line by the government.” 

Solomon was responding to reports that the Human Resources Ministry had decided to restrict the use of foreign labour to plantation, agricultural and construction sectors.

This was on the back of an earlier decision to freeze the recruitment of new foreign workers until year-end.

These decisions, said Solomon, had been ill-conceived without the input of the MTUC and the Malaysian Employers Federation, which represent most of the private sector.

Both groups and the ministry are part of the tripartite National Labour Advisory Council (NLAC) but these decisions were bulldozed without the council’s input.

“Instead of making these ad hoc announcements, the ministry should have engaged the NLAC to find practical solutions to reduce the country’s over-dependence on migrant labour and to address rising unemployment among locals.

“The ministry is now forced to address the growing labour crunch faced by employers in key sectors, including small and medium enterprises at a time when they are desperately attempting to recover from the Covid-19 pandemic”.

The current structure of the Malaysian economy – whether manufacturing, services, agriculture – is that it is built to be run by low-skilled, lowly paid foreign workers said the MTUC.

“It is just not big businesses such as hotels, factories and petrol stations that depend on foreign workers but even small businesses such as coffee shops, hair salons and neighbourhood security”.

Of the two million documented foreign workers in Malaysia, about 700,000 of them are employed in the manufacturing sector, and another 309,000 in services.

Undocumented workers make up for about another one million in these sectors, Solomon said.    

Most documented migrants are paid the minimum wage of RM1,200 per month and receive inadequate overtime pay, mandatory rest days and even medical benefits, MTUC claimed.

“Those without documents and hired illegally fare far worse with unscrupulous employers paying them less than RM1,000 per month.

“In Malaysia, low wages are paid to migrant workers and depresses the overall wages of all workers, including Malaysians. Essentially new jobs are created to cater to cheap migrant labour.”

The PN government must engage in meaningful discussions with the NLAC if it wants to get locals to take up jobs that will be vacated by foreigners, Solomon said. – August 4, 2020.