We need practical and applicable solutions

EVER since the issue of bringing in the 1.5 million Bangladeshi workers hit the headlines, the debate over it has not simmered.

Though the project has been halted indefinitely, there is concern that it may be implemented if a shortfall in meeting the demands of industries that employ people in the 3D sectors (dirty, dangerous and difficult) remain.

Some have argued that low salaries in the 3D jobs caused an ‘’artificial’’ shortage and this anomaly will be self-corrected if wages are hiked and commensurate the job requirements.

The fact that many are willing to engage in these jobs in a neighbouring country like Singapore seem to derail the proposition by the Government that Malaysians are not willing to take 3D jobs.

Though it seems logical at a glance the debate put forth, we must not over simplify the economics of labour demand and supply mechanism that is far more complex and integrated with financial management.

Different industries require different drivers. Some are more labour intensive but command a smaller profit margin over revenue in returns; while other industries maybe partially automated and require a smaller number of employees.

Not withstanding that, the current stiffly oriented competitive local and global market has suppressive effects on pricing of goods and services delivered to end users/customers.

Thus the direct comparison with conversion of Singapore currency to Malaysian ringgit in terms of salaries paid to those in 3D sectors is over simplistic as we stand on different scales of the economy.

If Malaysian companies were to equate the salaries after conversion of the earnings made in Singapore, it would mean that we must first and foremost meet the same benchmarking in productivity, similar labour policies and above all currency strength.

Which admittedly we are still not at par and that is the main cause why there is a push of our workers towards the island south, inadvertently creating a vacuum locally.

Singapore historically has been propelled by its industrialisation policy from the 1960’s while Malaysia has been largely driven by an agriculture-based economy.

With dwindling global natural resources, prices and a highly diversified geopolitical landscape, not forgetting Sabah and Sarawak, it will be disproportionate and misleading to extrapolate the fundamentals of Singapore or other advanced countries and applied in toto here.

Reliance on foreign and cheaper labour from developing or third world countries to do 3D jobs is not an alienated phenomena to Malaysia.

Even the United States, New Zealand, Australia and major European countries have all along imported labour from third countries or that have lower economic strength. And currency exchange is one factor.

This brings us to the next question – are Malaysians willing to take on the extra pass-on costs of hiring locals since they will demand higher wages, extra perks and benefits?

While productivity may not see an uptrend instantaneously in all sectors, the financial burden of employing local hands will definitely increase overnight.

For sure the cascading effect is increased production costs that eventually will fall squarely on the shoulders of all consumers.

We must be prepared to first face this elasticity before jumping the gun that the immediate solution to meet the labour demand in 3D jobs is to increase salaries overnight.

We may all be caught in a tight corner three to six months down the road when costs of the fresh stocks produced with local workers increase drastically and they become more expensive to purchase.

The next ripple effect will be to import cheaper versions of goods from China, Taiwan, Korea, Vietnam and even Indonesia.

The net result in a short time will see more local small and medium industries wrapping up businesses and lay-offs will be inevitable.

The food and service industry is also not spared these days. Many eateries have either closed shop or downsized as current costs itself are hard to break-even.

Unfortunately Opposition parties and voices have conveniently ignored the intricacies of business sense but are rather busily engrossed in politicking the good intentions of the Government – that is to keep the mill running at reasonable costs with foreign labour.

We need practical and applicable solutions that will benefit all and not rhetoric in addressing the foreign labour predicament.

Stereotyping and downgrading them is definitely unacceptable under any circumstances, which sadly certain pockets of society have been doing lately.

The Star


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