Malaysia dilemma of foreign workers

Malaysia dilemma of foreign workers

Prepared by:ZAKINAN NAWAZ SAHUL HAMIDHR.ECONOMICSMaster of Business Economics (UiTM)*Credit to: KNOMAD-MALAYSIA-NEW

Flow of presentations..Introductions (def..)Briefing of Foreign WorkersBenefits of Foreign WorkersDisadvantages of Foreign WorkersReasons of recruitmentShort videosConclusion & recommendations

introductionOn 2010, NEM was launch. One of the objective is to created 3.3 millions jobs when 2020 (300k per year)Populations in Malaysia are about 30 million. citizen itself conquer 91.2% (Malays 50.1%, Chinese 22.6%, Indigenous 11.8%, Indians 6.7%) the remains from 91.2 % are non-citizen.the labor force participation rate increased 7 % (2010-2015). The latest 67.5%In Malaysia the Malaysians does not works alone..

In this modern 21st century, foreign workers are all over the world and this phenomenon is faced by many developing countries, for example, Malaysia.They are Myanmar, Bangladeshi, Vietnamese, Nepalese, Pakistanis, Filipina and also Indonesia.Define as : Foreign workers is being defined as a person who employed in a country on a temporary basis to which the person is not a citizen.Foreign workers are those who are skill and unskilled, legal and illegal.Or in other words foreign worker is a person who works in a country other than the one of which he or she is a citizen.Migrants workers may follow work within their own country or between countries, depending on which definitions is used

Foreign workers in Malaysiaforeign workers number are increasing through years. (cagr = 8.5%)driven by the country's dependence on foreign workers in critical sectors.last November, Human Resources Minister Datuk Seri Richard Riot Jaem = revealed that Malaysia's migrant workforce, both legal and illegal, now numbered a worryingly as high as 6.7 million.2.1 million possessed valid work permits and were registered. (hard to track the illegal)foreign workers (legal + illegal) we can see that they are about 13% of the total population in Malaysia, this means that they are more than Indians community.If there are no steps taken, it never possible for them to overtake the ethnic Chinese community.Disturbing?? Wait for it

Almost two-thirds of the foreign workers come from Indonesia. The next largest group are from the Philippines (13%).Nearly two-thirds of foreign workers in Malaysia are in three states Sabah, Selangor and Johor

Foreign labor continues to be largely concentrated in physically demanding sectors of the economy such as agriculture and construction

Foreign workers make up the largest share of the labor force in wood products, other services and agriculture sectors

Foreign workers in Malaysia

The share of Malaysians with (at most) primary school education declined from 61% in 1990 to 26% in 2010The share of secondary educated (at most) increased from 34% to 56%.The share of college educated increased from 5% to 18% in the same period.

Foreign workers in Malaysia

Even when employed in capital intensive sectors, foreign workers hold low skill occupations.Education Levels by Economic Sectors, 2010Malaysian WorkersForeign Workers

1) Reduce the shortage problems Reduce the shortage of labors in certain fields of jobs, such as manufacturing, construction and plantation sector.labors shortage problem is most commonly happened in manufacturing, construction and plantation sectors

Why do this Shortage of Labor occur?????Phenomenon of labors shortage was occurred because of the unwilling of local workers to work in these industry. Why??we heard enough that Malaysians are choosy and not interested in 3D jobsFurthermore, the issue of lacking workers is caused by the bad attitude of local labors as they become very selective in their choice of works.as a result, employers of companies made a decision to recruit foreign workers who are more devoted to their jobs to overcome the labors shortage problem (Haji Mohamed, SPR, & Yacob, 2012)

Benefits of Foreign workers

Benefits of Foreign workers2) Contractual basis skillsThey are employed to contribute the contractual basis skills that a host country seeks.Acc. to Economic report 2010/2011 by Financial Ministry, about 2 mil.foreign workers were registered to work in Malaysia legally (Haji Mohamed, SPR, & Yacob, 2012).=>> About 38% of them were employed in manufacturing sectors, 16% were hired in construction sectors and 14.6% were employed in plantation sectors.One of the statements by Uni Assignment Centre (UAI), employment of foreign in Malaysia should be encouraged.

Benefits of Foreign workers3) Foreign workers facilitate the economic growth rate of MalaysiaFrom ("Foreign Workers And The Malaysia Economy", 2004/2005). In order to ensure that the economic development smoothly and more stable, a great number of proficient labor and operation mechanization are acted as an important requirement.Malaysia economy development =>> minor and major field jobs.If Malaysia government discourage FW Construction, Manufactured, Plantation sector may undergo poverty. it may disrupt the economic growth process.In addition, the cheaper payment for the foreigners compared to the native workers will connive the cooperation to economize their operate expenses.Due to their detrimental factor and condition, they can only get a very limited salary and welfare from the employers.Low cost More profits High Growth

601 new full-time jobs (of which 67 are part-time) are created for Malaysian workers in a given sector in a state as a result of the entry of 1000 new foreign workers. This is mainly a reallocation effect

Rahman, Wong (2012)

Benefits of Foreign workers4) Foreign Workers enhance the National Productivity and Competitiveness to survive at the workplace, the immigrants will try their best to improve their competitivenessdedicated to their post when they are given extra task to do.They may put more effort on completing their task no matter how much the quantity is and how short the time given.As the result, the overall productivity among the immigrants will be increased. (Kassim, 2005)5) The government improve the FacilitiesThe public transportations will be improved, such as the transport numbers, buses station, airports as well as others.6) Mentality of our locals will change. (due to options)7) The new knowledge.

It is the large firms that employ the largest share of foreign workers

Short Videos

Disadvantages of foreign workersCriminal Rate (2003 -2010)

FACT: Increasing sentiment that the presence of foreign workers is associated with higher rates of crime.

QUESTION: Do foreign workers increase the propensity to commit crime or do regions with high crime rates employ more migrants ?

Disadvantages of foreign workers2) Increment of the unemployment percentage of local worker.It will reduces the bargain power for locals.The total workforce percentage increasing.On 2014 13.4% of total workforce (legal)

3) FW may induce some illness.TB increased to 17,000 2015, from 9,255 2010(92% increased, within 5 years)

4) Leakages in flowA study has found out that foreign workers on average send as much as 80% of their pay back to their respective home countries on a steady basis.Currency can be depreciated. (one man send RM100, there are RM 8 bil a year)

Disadvantages of foreign workers5) Weaknesses in the Trade Unionand when the trade union is weak employers can take more advantages to their workers.

6) Over dependent of Foreign Workersresulting in over foreignization of the local economyboth spouses have to work, and work long hours, just to make ends meetYoung kids are not raised under proper parental guidance and care.In most cases, these children even share closer relationships with their live-in maids than their own parents.Double income households may bring improvements in the standards of living and material aspects of lifehowever the soundness of a society also greatly depends on the upbringing of its future generation.

Factors drive foreign workersReduction in CostConstruction Industry Development Board, a local construction worker generally receives a pay 40% higher than his foreign counterpart.

Jobs fair recruitment of locals are not seriously done by any bodies.

Company do have in mind to recruit foreign workers. Why? Because they thinkingWork long hours, pay less, high quality, less gossips, work harder

Employers also have another agendaTo gain some profits. Commission/tokens received

*When we have all this in mind, it is quite difficult to increase the locals at the low level to participate.The agent makes money, Banks makes money, people who recruit makes money, so who want to recruit Malaysians?

Conclusion and recommendationsConclusionForeign worker has contribute to the Malaysia growth and they are essential. By having foreign workers also there are a lot benefits earns and makes us much successful nation.However Government should regulate the number of foreign workers entering the country as it reduces the employment opportunity for locals.If the government does not take necessary actions, our industries will be too dependent on FW and it will create a downfall.RecommendationsEmployers should not discriminate. Priority to locals because it is unfair for the locals to compete with FW and accept the low wages. It is their own homeland.A proper Quotas is needed. (a line should be drawn somewhere)The education should increased. The latest data shows that Only 24% of the total workforce is educated beyond form 5, and only 10.4% is a degree holder. Malaysia out of every six children does not make it into form 4. Hiring FW have boosted our economic growth rate, but it is also lead to our country become unsecure and criminal occurred frequently.

Thank you..

This is story of Malaysia. As I see it. This is also my story