Sunday, April 17, 2005

Foreign Workers; The Right Solution to Solve Labour Woes?

We are a country of great contrast; we have thousands of unemployed in the country, including over 80,000 graduates and over 320,000 non-graduates, yet some sectors of the economy are clamouring for workers-agriculture, construction, manufacturing and services industry. After the recent repatriation of the illegal immigrants, the labour crunch become worse, and now the government has arrangement with Pakistan to bring in over 100,000 Pakistanis to work here.
What is wrong with the local unemployed? Is it because those jobs that are being filled by foreigners are 3D jobs? Dirty, dangerous and demeaning, and I shall add another D, hard work. I beg to differ in this regard.
My experience living in free market society taught me this; given enough monetary reward, people will do almost anything, 3D jobs included. In Western countries, those highly paid jobs are in fishing industry, long haul transportations (those big trucks that transport goods interstate), police and fire department. Of course, some popular artists and singers are highly paid too (don’t envy Siti Nurhaliza, she’s worth her pay, even at RM50 per concert). Ask yourself, how much you would be able to get working as general labourer, waiter or construction worker. If you are working as a corporate manager or high flyer in the city, you might be able to get RM5,000-10,000 easily. Our MPs have minimum salary or RM18,000 a month, and yet they still complain of being broke. If the figure above is not right, forgive my ignorance.
Let me make it clear here, that some employers draw fat salaries, yet when it comes to paying reasonable wages for their employees, they balk. Construction workers earns on average about RM50-80 a day, on daily basis with no holiday pay or paid sick leave. Cleaner, security guard, sales assistant, factory worker and kitchen hand earn about RM300-700 a month depending on location and generosity of the employer. Its small wonder that not many people willing to do those jobs.

Instead of bringing in foreign workers to ease our domestic labour woes, we should let the market runs its course; with unemployment rate below NAIRU (non accelerating inflation rate of unemployment), a shortage of labour, would be followed by increase in wages and inflation. When the wage rate is high enough, more people would enter workforce and our labour problem would be solved. Those 80,000 graduates and 320,000 non-graduates would be happy to work for reasonable wages. In my opinion, our labour shortage is just that, transitional unemployment because with low wages, the unemployed would keep on looking for better jobs. Its about time that low earning Malaysians get a better deal, increase in real wages and better living standard. If the wages are high enough, some employer might invest more money in labour replacing machinery instead, hence reducing labour demand, and increasing labour productivity at the same time. Let just admit it, we are not a cheap labour economy any longer.
In my opinion, the government is doing a disservice to its constituency, the average low income wage earners by bringing in thousands of foreign workers, limiting the wage growth and postponing the country shift into more productive and efficient economy. It’s about time that the ordinary Malaysians get their fair share of our economic progress.
In this regard, we shall call on employers to invest in capital intensive and labour saving production. Importing cheap labour from Indonesia, Pakistan, Bangladesh would slow this shift into higher productivity economy.

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