Alternative Views: Quick fix not solution to labour shortage

This article first appeared in Forum, The Edge Malaysia Weekly, on October 11, 2021 - October 17, 2021.
Alternative Views: Quick fix not solution to labour shortage
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Malaysia’s unemployment rate is at a high of 4.7%, the highest in recent years. For the first time, the country has records of most of the undocumented foreign workers, thanks to an inclusive vaccination programme.

Yet, the plantation and manufacturing sectors are short of workers. To ease the manpower shortage, an easy fix is to open the flood gates to allow vaccinated foreign workers to come into the country and take up jobs.

Towards this end, Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin says the government will allow 32,000 foreign workers to enter the country in stages. Surely, this will not be the last batch of foreign workers to come into the country.

There will be more coming in as employers use their political clout and influence to secure cheap labour. And, eventually, it is the country as a whole and its people who will pay the price.

The quick fix to the problem of a shortage of workers does not in any way help rectify the low wage environment faced by the local working population. And it does not solve the problem of employers being able to secure reliable labourers.

There are several reasons for it.

First, some of the workers who are brought in will not remain with the companies that hire them, especially those employed in the plantation sector. As in the past, many tend to leave the deplorable working conditions in the plantations for the city or nearest towns to work in other sectors that pay more and offer better living conditions.

Second, most plantation company owners will continue to have manpower problems as long as their wage structure is low. Even now, when crude palm oil (CPO) prices are high, the wages for harvesters have risen only marginally.

The fear among planters is that wages are part of their fixed cost while CPO prices are cyclical. So, if they pay higher wages now, they would not be able to sustain the cost when CPO prices fall.

But history has shown that, by paying low wages to foreign labour, the workers will eventually leave anyway.

Finally, most employers prefer foreign labour to local workers because they are able to work longer hours without complaining and are more reliable in turning up for work as their movements are “controlled”. Employers house the foreign workers in accommodations that they provide. The foreign workers have no choice but to turn up for work unless they have a valid reason.

But the practice of having a tight rein over foreign labour is no longer acceptable.

Companies that export their products to developed countries such as the US and Europe have learnt their lessons the hard way. International non-governmental organisations (NGOs) and activists are watching errant employers and tend to file reports in the US and Europe.

Glove companies such as Top Glove Corp Bhd and at least two plantation giants have been subject to complaints and had to go through tedious efforts to rectify the problems.

In the last two years, the number of foreign workers in Malaysia has dropped. According to the Department of Statistics Malaysia, there was an estimated 2.96 million registered foreign workers in 2020 compared with 3.1 million in 2019.

Prior to the pandemic, the number of registered foreign workers was 3.3 million in 2018. Many returned to their countries because of the pandemic.

The number of undocumented foreign workers and their whereabouts have always been a mystery. Estimates were that there were between one million and two million of them.

The pandemic has for the first time paved the way for the authorities to estimate the number of undocumented foreign workers and collect some information on their whereabouts.

This is through the vaccination programme that is open to all foreign workers irrespective of their legal status. Most have received their jabs. In return, they had to produce a document and a telephone that supports the MySejahtera app to get vaccinated. Even expired or photocopies of passports were accepted with no questions asked.

For those who had no documents nor phone to support the MySejahtera app, their details were taken down manually at the vaccination centres.

The fact that none were deported or forcibly detained — as happened in Masjid India in May last year — and the fear of succumbing to Covid-19 prompted almost all foreign workers, documented and undocumented, to get vaccinated.

Compared with the period prior to the pandemic, the authorities should now have a reliable estimate on the number of undocumented workers and their whereabouts.

So, instead of bringing in new batches of foreign workers to fulfil the labour shortage, shouldn’t the authorities coerce these undocumented workers who are already here and fully vaccinated to serve the plantation and manufacturing sectors?

Why is there a need to bring in more foreign labour? By bringing in more cheap foreign labour, how does it help the population at large to come out of the middle-income trap?

One of the reasons Malaysia generally has a low wage environment is that there is a skills mismatch between the sectors that need manpower and the general level of qualification of the people.

The literacy rate of the country is generally high. Increasingly, there are more graduates being produced and people with an intermediate level of education.

To expect the younger people with some level of literacy to work in the plantation or manufacturing sector, which pays low wages and offers no growth prospects, is unreasonable. These people would probably opt to work in the services sector, which is mostly in towns or cities.

But employers in the services sector also prefer to hire foreign workers — even if they are undocumented — because they are cheaper.

The pandemic has caused a great reset in the labour market. The number of foreign workers has fallen for two consecutive years.

This is the best time to legalise undocumented workers and place them in sectors that require manpower. Bringing in new foreign labour is simply taking the easy way out and not resolving the problems of the local people.

M Shanmugam is contributing editor at The Edge

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