THE government aspires to create 600,000 employment opportunities involving RM6 billion under the JaminKerja (Job Guarantee) incentive in Budget 2022.

I can see people agreeing with this plan, but let us not celebrate too fast as in the proposal, the responsibility to create the jobs lies with the private sector.

This is a sticking point as the incentive operates on a sharing principle between the state and private sector, with the largest share being absorbed by the employer.

The state will provide a 20% subsidy of worker remuneration for the first six months and another 30% for the following six months.

Why would employers be interested in taking up the 80% and 70% remuneration burden at a time when most are struggling to recover from tight cash flows and outstanding bank and rental debts, and way behind in their utility payments?

Besides being a disincentive to the private sector, it will also increase their business operating costs. And it will not reduce unemployment, as envisaged by the government.

A job guarantee is a public option for jobs, where it is a permanent, federally funded and locally administered programme that supplies voluntary employment opportunities on demand for all who are ready and willing to work at a living wage, according to Levy Economics Institute.

In sharp contrast to the JaminKerja initiative, job guarantee programmes can reduce unemployment and are an approach adopted by governments to provide jobs to people who want to work at a time of crisis.

Employers are paid by the state to absorb workers through these programmes, or can request funds from the government to employ workers in, say, cutting-edge technology jobs.

Either way, government intervention is needed to keep unemployment down by making funds available to create jobs.

The Malaysian government should review or reimagine its role as a protagonist in the labour market to achieve sustainable employment.

It can start by providing a subsidy amount of RM1,500 per month per worker for a period of 12 months, irrespective of age, ethnicity, gender or labour market status, and provide skills training before workers start their employment. – November 16, 2021.

* Charles Santiago is Klang MP

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.