Let's Tackle This Major Issue - Foreign Workers

Is foreign workers good or bad for Malaysia? This is not just coffee shop talk, and while we are at that, ... my Nepalese friend is bringing me my duck rice while my Indonesian friend is asking me if I want kopi-o or kopi-o ping. I am saddened that our government, obviously, have not given much thought to the economic ramifications of excessive foreign labour.



The towkays would say, fine, bring them in, they are filling jobs locals do not want. BULLSHIT, you fat asses!!! Locals do not want the work because of the stagnant pay and horrendous working conditions. Please check how many Malaysians go "jumping ship and planes" to work as farm labourers in the US and Australia, that's because they pay RM30 an hour, not RM30 a day for that kind of work.

Our government have taken the easy way out to suppress cost for businesses. That's why we have the largest contingent of foreign workers as a percentage of our labour force in Asia. Its to keep us competitive, they say. I say more B.S. .... maybe the government do not understand the economic ramifications of such a major policy. That is the really sad part.

When foreign workers total 30% of your labour force, you are basically forcing down the salaries for everyone else. But you forgot that salaries are but one component of the overall cost of goods and services - can you also import cheaper land??? That's why graduates salaries have been the same now and 15 years ago, unbelievable, but the cost of housing have tripled.



You may be able to control the basic necessities such as rice, flour, sugar and even fuel and gas - but thats because we are subsidising them. Can you also get foreign workers to dig oil out at the same cost for the past 15 years? Suffice to say, our subsidy cost has tripled over the past 15 years and we can no longer afford to do that, thats why fuel prices have to keep going up even with subsidy. Its the same for all commodities. Unless you can impart the same cost savings in all matters of land, housing, food and commodities ... suppressing wage bills has been making most Malaysians finding it harder to make a living. Tell me if I am wrong. I wish I was.

Simply put, a country's economic progress is only as good as our natural resources, the way we allocate and invest our surpluses and the collective productivity and efficiency of our workforce. This is the most important point to this issue - the more we rely on foreign workers, the more we suppress our wages, hence at the same time we are seeing a greater brain drain of our capable citizens to foreign shores for better pay.

See if Singapore will crumble without Malaysians, of course it will. See how many of our capable people are working now in the Middle East, HK, China, Australia and of course Singapore. WE ARE BASICALLY REPLACING ALMOST EACH OF THOSE "BRAIN DRAIN-ED" WITH FOREIGN WORKERS!!! How do we not expect our economic progress be limited or even stunted over a prolonged period of time??!!

I have nothing against foreign workers, they just have to make a living. If its not Malaysia, its somewhere else. Malaysia already is the TOP DESTINATION for Asian migrants who account for 8.4% of our population. The economic disservice is that they are only contributing at the lowest levels of work stratum; PLUS they are remitting tons of money back to their home country - if they were spending and reinvesting into Malaysia, then its a different kettle of fish. Any economist can see that this is a bad thing for the economy.



So we are replacing skilled workers with unskilled workers - wages stagnant but other cost of living components rising like nobody's business. Malaysia has been able to tolerate that disparity for so long because of our natural resources, but its getting a lot tougher. Ask the government finance department and they can tell you that "oops, its not balancing out that well".

Reverse that policy immediately:
- implement a RM500 monthly levy for every foreign worker for a start immediately, be they in construction, plantations, services or even maids.
- increase that levy to RM1,000 a month per worker from 2013 onwards. Then you can see employers shifting their thinking and business model.

Yes, wage bills will rise, but its a necessary evil for a start. The economy will become more equitable as more money flows through the system. Yes, public service wage bills will jump and so too will graduates starting pay. Yes, we will end up paying a lot more for goods and services but things should even out a lot better for all Malaysians over the longer term.

We have to seriously do this NOW because the consequences are pretty dire if left the way it is. Its not the hardware, but the software that needs upgrading, people.

I have posted before on Malaysia's middle-income trap:
http://malaysiafinance.blogspot.com/2010/08/malaysias-middle-income-trap-or-is-it.html

Posted in: Foreign labour,Foreign workers,Nia Ramadhani