THE IMPACT OF FOREIGN WORKERS ON
PRODUCTIVITY : A STUDY ON DIRECT IMPACT, INDIRECT IMPACT AND INITIATIVES
Dashathri Arunandy
International Business School, Universiti
Teknologi Malaysia
dasha_23@hotmail.com
ABSTRACT
This paper pursues to explore the
direct and indirect impacts of foreign workers on productivity. Direct impact
influences the economy and productivity. The indirect impact has an effect on
the political, social and cultural aspect. Initiatives by Malaysia government
and practices from other countries’ will be able to help curb the foreign
worker issues. Literature reviews have identified various methodologies and
studies adopted for the purpose of the research. Largely the literature reviews
looks into direct impact as it is crucial to the nation’s well-being. The
indirect impact is also studied as it is linked to the productivity and
economy. The Social Exchange Theory is utilized as the predominant theory to
harmonize the study on locals and foreign workers. This paper will provide and
insight of the issues we are facing and the ways we can curb it.
Keywords : Foreign workers,
productivity, direct impact, indirect impact
1.0 INTRODUCTION
Malaysians
and foreign workers have a kind of love-hate relationship. For decades,
Malaysia has been counting on foreign workers in various industries such as
construction, manufacturing, agriculture, services and many more (Abdul Rahim
Abdul Hamid, Bachan Singh, Wan Zulkifli Wan Yusof, Aminah Md Yusof and
Norzamzila Mustafa, 2011). Today Malaysia is swamped with foreign workers.
According to the statistics from the Ministry of Homes Affairs, as of 2015 the
total foreign workers existing in Malaysia is 2,135,035. Malaysia has always
known for its three main ethnicities namely Malay, Chinese and Indian. However,
the number of foreign workers have outnumbered the Indian ethnicity which has a
total population of 2.06 million (Vital Statistics Malaysia, Department of
Statistics). Having said that, it is clear that foreign workers have swamped
Malaysia.
The question here is whether is this
good or bad for Malaysia? Recently, Malaysia had gone through dilemma in
addressing the foreign workers matter. There was controversy over the recent announcement
by government to bring in 1.5 million foreign workers specifically the
Bangladeshis. It caused turmoil within the employers and employees as many
Malaysians were not happy with the announcement dues to existing populations of
foreign workers. Shortly after the announcement was made the government
announced a freeze of foreign workers and yet it upset the employers (The Star,
2016). Deputy Prime Minister Datuk Seri Dr Zahid Hamid urged all employers to
employ local workers instead. He also mentioned that over influx of foreign
workers may cause Malaysia to be like Dubai whereby foreign workers will be
more than total local population.
The World Bank 2015 indicated that
Malaysia has the fourth largest number of migrants and the seventh highest ratio
of migrants to total population in East Asia Pacific. The report also indicated
that the Malaysian economy continues to expand, albeit at a slower pace. Growth
is projected to be 4.7% in 2015, easing to 4.5% in 2016 and 2017. The existence
of foreign workers has also left an impact on the unemployment rate in Malaysia
(Ramesh Kumar Moona Haji Mohamed, Charles Ramendran SPR, Peter Yacob, 2012). That
statement can be supported with the recent unemployment rate in Malaysia which
has been increasing past two years from 2.9% in 2014 to 3.1% in 2015 (Ministry
of Home Affairs, 2016).
According to the Bank Negara 2015
Annual Report, demand for low-value production and low-skilled workers remained
high last year, compared to 2.07 million workers in 2014. The report said
agriculture and construction sectors registered the highest dependence on such
foreign labour. Malay Contractors Association (PKMM) president Datuk Mokhtar
Samad said that The construction industry is very dependent on the
participation of foreign workers of about 93 per cent (Borneo Post, 2016).
According to the Master Builders Association Malaysia (2014), the country’s
most important infrastructure projects already use more steel and pre-cast
structures, only requiring foreign workers due to the lack of sufficient local
talent. The argument over the need of foreign workers will be an ongoing
matter. Although the presence of foreign
workers has positive impact on Malaysia economy, it is undeniable that it has
caused negative impact on social, economic and political aspect (The World Bank,
EASHS, 2013). The Federation of Malaysia Manufacturers (2016), objected the
government’s initial proposal of bringing in 1.5million Bangladeshis because it
will cause not only security and health problems but may also lead to political
conflict.
Although several studies attempt to
examine issues relating to foreign labour in Malaysia, no serious effort has
been made to assess the impact of foreign labour on Malaysian economic growth
(Rahmah Ismail and Ferayuliani Yuliyusman, 2014). The purpose of this study is identifying
the direct and indirect impact of foreign workers on productivity. The direct
impact looks into the economic aspect while the indirect impact looks into
social, cultural and political aspects respectively. Prior studies have focused
either on direct or indirect impact rather than combining both to look at
foreign workers issue in a bigger perspective. This study intent to give an
overall picture of both direct and indirect impact of foreign workers. Indirect
impact affects the society and ultimately that could affect the productivity. A
view of other countries’ practices on handling foreign workers issues will be
highlighted to share ways Malaysia could possibly implement other than the ones
recommended.
This study will answer the questions
of what is the direct impact of foreign workers on productivity and the
indirect impacts of foreign workers on society. The study will also propose
some of the practices in other countries used to minimize the foreign workers
issue apart from recommendations of how Malaysia can deal with this issue as
well. In the next session, the elements of direct and indirect impact are
discussed by also addressing the theoretical and practical implications.
Followed by the discussion and lastly, the future research directions and
conclusion will be discussed.
2.0 Foreign workers in Malaysia;
Is there a need?
2.1 11th
Malaysia Plan (2016-2020)
In the
11th Malaysia Plan report, the economic agenda outlined is expected
to create 1.5 million jobs by 2020, with targeted improvements in labour
productivity and reduced dependency on low-skilled foreign workers, both of
which are a result of the continuous shift from labour-intensive to knowledge-
and innovation-based economic activities. The image below clearly shows that
one of the points to reduce is the ease of hiring low skilled foreign workers. The
government is aware that the reduction of foreign workers will have a positive
impact on the productivity hence the reason it is included in the strategy
canvas.
Source
: 11th Malaysia Plan
One of the thrusts from the 11th
Malaysia plan in regards to creating safer living environment for thriving
communities; has one of the strategy as tightening regulations and
strengthening enforcement to stem crime. This includes initiatives to
strengthen legislation, increase the use of crime prevention measures, improve
the management of foreign workers, and stem cross-border crime. The other
strategy mentioned is the management of foreign workers will be improved by
enhancing the role of one-stop center and through greater collaboration between
the Immigration Department of Malaysia and local authorities to ensure
effective enforcement.
In the summary of focus areas in the
11th Malaysia Plan, the focus is in improving labour market
efficiency to accelerate economic growth by improving management of foreign
workers – reducing the nation’s reliance on low-skilled foreign workers and
streamlining recruitment as well as immigration processes. The focus is to cap
proportion of foreign workers at 15% of total workforce in 2020.
2.2 The significant
of productivity
A
country’s productivity will say a lot about the stability and well-being of the
nation. The Malaysia Productivity Corporation (MPC) is the government arm in
measuring the competitiveness and productivity of Malaysia. According the MPC
Productivity report 2013/2014, in 2014, Malaysia’s labour productivity as
measured by real added value per employee improved by 3.5% at RM61,708 from
RM59,622 in 2013. Meanwhile, labour productivity as measured by real added
value per hour worked improved to RM28.55 in 2014 from RM27.59 in 2013. The
growth in productivity was a contributing factor to the higher growth in Gross
Domestic Product (GDP) at 6.0%. The higher GDP was also due to improvements in
labour efficiency during the year. Employment grew by 2.4%, which was slower
than the 3.8% recorded in 2013 (Figure 1.1). For the period of 2011-2014,
Malaysia’s labour productivity registered growth of 2.1%. Malaysia’s labour
productivity is targeted to grow at an average annual rate of 3.7% towards
becoming a high-income economy by 2020.
The report also indicated that in
2014, Malaysia’s Labour Force Participation Rate (LFPR) increased slightly to
67.5% from 67% in 2013. However, Malaysia’s employment mismatch between vacancies
and job-seekers remained high but showed a decreasing trend. Although
productivity and competitiveness have increased respectively past two years,
yet there is evidence showing the mismatch between employment and vacancies.
With the existence of vacancies yet we welcome foreign workers and they secure
employment regardless or skilled or un-skilled. There is a gap between the
productivity and competitiveness if local employment is not taken up. In the 11th Malaysia Plan, it is stated that
despite efforts to improve productivity, Malaysia continues to lag behind many
high-income economies. For example, Malaysia’s labour productivity level was
32% that of the United States’ and 56% that of South Korea’s in 2013. Although
MPC numbers look good, yet Malaysia needs to boost up.
2.3 Foreign workers
in Malaysia
Foreign
worker is a person who is not a citizen working in another country temporarily.
Historically, during the British colonialization, the government allowed many
immigrants to come in for plantation, mining, construction and others. Since
then, foreign workers had an eye for Malaysia as the employment choice. Foreigners
working in Malaysia are divided into two major categories, the
unskilled/semiskilled and the expatriate groups. The number of legal
unskilled/semi-skilled foreign workers fluctuates over the years in response to
the economic situation and policy measures formulated and implemented (Azizah
Kasim, 2005).
According to the 2015 statistics, the
highest number of foreign workers are from Indonesia which is almost 40% from
the total population of 2,135,035. The Nepalese are second highest about 24%,
Bangladeshis about 14% and the balance from countries like Thailand, India,
Pakistan and Philippines. In terms of employment, foreign workers are largely
involved in the construction industry amounting to 35% followed by agriculture
and manufacturing about 22% the rest are from service industry (Ministry of
Home Affairs, 2015).
The admission of foreign workers
into Malaysia is generally using two ways: legal admission through registered foreign
workers agencies under Malaysian Immigration Department and illegal admission
through unregistered illegal agencies. According to International Labour Organisation
(ILO), Malaysia has critical admission of illegal immigrations among ASEAN
countries (Mohd Na’eim Ajis, Mohamad Nasir Saludin, Azman Ismail, Otto F. von
Feigenblatt, Md. Shukri Shuib and Mohamad Faisol Keling, 2010).
2.4 The Dilemma –
What other countries are facing?
Foreign
workers is a very known universal term. Job opportunities are growing like
mushrooms and with the help of technology, one can move from one place to
another be it country to country. As we are rapidly moving towards
industrialization and globalization, survival is the keyword. However,
sometimes people lose their selves in that transformation and transition. Focus
and priorities change and all people see do is competing to be the best. This
is when migrants take advantage of the situation to easily grab the opportunity.
Until comes a time when realization kicks in and the need to prioritize
citizens becomes a matter to deal with. If we look from a wide angle of perspective
of the foreign workers issue, it is known that Malaysia is not the only country
facing the foreign workers issues.
Singapore’s Today Newspaper (2015),
published a full report of Singapore’s 2015 general election, whereby the
government made a statement- “Singapore has ‘no choice’ but to curb foreign
worker growth”. The pas government party lost its seat as the Singaporeans felt
it was too lenient towards foreign workers. The new government part mentioned
that zero foreign manpower growth will hurt local small and
medium-sized enterprises (SMEs), which account for 70 per cent of the workforce
here. Therefore step taken to curb this issue has to be done slowly. According
to the report from the Prime Minister’s office, in 2015 the number foreign
workers increased about 26,000 from 2011 which had 80,000 of them. The Finance
Ministry also reported that in 2014, Singapore faced deflation and consumer
price index fell by 0.4% due to issues dealing with foreign workers.
The
Middle East country like Dubai is also facing issues with managing foreign
workers. In 2015 it was reported in the local newspaper, several hundred south
Asian migrant workers have held a rare protest in the heart of Dubai demanding
higher wages for their work on the Fountain Views development, a project by the
Dubai-based Emaar Properties to build high-end apartments. Millions of South
Asian workers provide the manpower to build high-rises, shopping malls, roads
and other mega-construction projects throughout the region. Most come to the
Gulf in search of more money to send back to relatives. Human Rights Watch
estimates there are more than five million low-paid migrant workers in the
Emirates alone.
The Migration Policy Institute
(2013) reported that the UAE had the fifth-largest international migrant stock
in the world with 7.8 million migrants (out of a total population of 9.2
million), according to United Nations (UN) estimates. According to Andrzej
Kapiszewski (2006), the GCC countries populations have increased by double from
1975 to 2006 with the influx of foreign workers. Andrzej also mentioned that
large number of foreigners residing in these countries will bring new social
and cultural challenges of consequences difficult to estimate, especially as
the naturalization of many foreigners will take place. Asians will continue to
dominate the foreign workforce at the expense of the non-Gulf Arab labor.
2.5 Theoretical Implications
From a
theoretical standpoint, the Social Exchange theory is used as the main
supporting theory because it emphasizes on behavior, connection between
employer-employee and work commitment. According to Social Exchange Theory, human
interactions can be seen as transactions wherein individuals exchange resources
in the hope of a certain benefit (Abdallah M Elamin Hayfaa A. Tlaiss, 2015). Social
Exchange Theory, it was also expected that local and foreign workers show
differences in work related behavior, and that the relationship between the
micro-organizational behavior concepts and commitment and intention to quit was
moderated by workers background (Boudewijn van Straaten, 2011). A social
exchange relationship rests on the norm of reciprocity. An exchange starts with
one party giving a benefit to another. If the recipient reciprocates, and
consequently a series of beneficial exchanges occurs, feelings of mutual
obligation between the parties are created (Wajda Wikhamn and Angela T. Hall,
J.D., 2012).
According to a study conducted by Mohd
Safri Saiman and Salmie Jemon (2014), Maslow’s
theory of hierarch of needs, emphasizes security aspect as one of the basic
needs of human beings. Therefore, to ensure individual can contribute
productively in the labour market, this basic attribute of security needs to be
fulfilled first. As such local workers are worried about the security of the
nation with the presence of foreign workers.
The overarching theory for the
purpose of this study will be the Social Exchange theory and supported by the
Maslow’s theory of hierarchy. Both the theories have significant effect on the
study as it intersects in terms of behavior and need.
2.6 Practical Implications
From
the practical standpoint, the need to reduce the presence of foreign workers is
mainly because Malaysia has been hit with various economic, social, political
and cultural issues. Therefore, there is a need to dig into this matter deeply.
Ultimately, these issues will be a reason for Malaysian to seek job elsewhere
and we will lose out local talents.
The nation never neglects the
locals. However, the supply and demand
sometimes don't match. The jobs available although low skilled can be
taken up by locals who possess the minimum requirement. It is natural for
citizens to demand rather than foreign workers to demand. The mix and match
between job opportunities and local workforce are not getting along well and
this has caused employers to lure in foreign workers. Employers are only
concerned about their cost and getting the job done. So they will go for
foreign workers to achieve their motivation. The impact of this situation is
not seen by them. There are many aspects to look at and it is important to see
it in a bigger and wider angle. The holistic approach to this matter is crucial
to be a well-developed nation.
This study will provide a view on
the direct and indirect impact of foreign workers on productivity and how
Malaysia can curb this issue based on government initiatives and other
countries’ practices. The aim to is to reduce the reliance on the foreign
workers as Malaysia do have enough local workers. It’s how the government and
employers can tap on that local talents and strategize to prioritize them
before the foreign workers. This study is not denying the fact that to certain
extent foreign workers are needed but it’s about how we manage it. It’s also
crucial to have a workforce that is emotionally, socially and politically
stable to achieve the nation’s development and towards Vision 2020.
2.7 Direct Impact
The
direct impact of foreign workers on economy is the critical part to look into.
Economy and productivity do not work independently but hand in hand. The major
contribution towards the nation’s productivity and competitiveness largely
depend on the economic situation and then on it influences the foreign direct
investment in Malaysia.
Malaysian Trade Union Congress (2015), Borhan
Sareya, Kasim Mansur and Roslinah Mahmud (2015)
and Mohd Na’eim Ajis, Mohamad Faisol Keling, Zaheruddin Othman and Md. Shukri
Shu’ib (2014),
agreed that immigrants have negative impacts on the wages of the least educated
Malaysians, which represent 14 per cent of the total labour force, and whose
wages decline by 0.74 per cent in 2015. Increase in immigration will reduce the
wages for only unskilled local workers. It also noted that the overall fiscal
impact of immigrant workers on the country is small and the fiscal burden is
mostly borne by undocumented people. Undocumented people represent a higher
fiscal burden as they do not pay a levy, are often uninsured and raise costs
associated with their health care and detention. Due to a non-strict
regulations, there are illegal foreign workers which do not have proper
documentation but works for Malaysian companies. According to World Bank report
2015, there are likely 1 million undocumented foreign workers in Malaysia. As
such, there is no levy paid to the government to bring them in. Immigration is
not only losing on the levy but also not able to monitor and track these illegal
foreign workers who are taking away the Ringgit. In Singapore, a large majority of these foreign
workers are employed in lower skilled occupations, earning below median wages
and hence contributing to the reduction in wage share (Tat and Toh, 2014). It has
not only brought about the fall in share of national wages in total income but
also increased disparity of income among the resident labour force.
Prior studies done in the 1990’s
in the context of foreign workers in Malaysia have found that the ratio of
foreign worker to total labours had increased even back then. Meanwhile, the
wage rate of local workers had shown down ward trend due to the presence
foreign workers influx. The studies provide the indication that the influx of
foreign workers to Malaysia had brought unfavorable condition to job
opportunities and wage rate of local workers. The influx of foreign workers had
caused the job opportunities and wage rate for local workers to decrease.
According to Evelyn S. Devadason
(2009) in terms of employment, if foreign migrants comprise mainly unskilled
workers, it is likely that foreign workers have substitution effects on the
domestic unskilled and in wage terms, the greater utilization of cheap foreign
labour is deemed to have suppressed the upward pressure of real wages of the
unskilled category. In the past, foreign workers used to be paid lesser than
Malaysians. However, when the Minimum Wage Policy was implement, the government
standardized the salary between the locals and foreign workers. It still wasn’t
a happy decision for the locals to be paid the same as foreign workers.
Therefore, they become choosy to do certain jobs and those jobs go to foreign
workers.
In the past decade, studies have
shown that foreign workers’ interest were mainly in earning money in Malaysia
and opening a business in Malaysia illegally. As such, no tax to be paid and
the revenue generated does not contribute to the Malaysian economy. In a survey
conducted by Abdul-Rashid Abdul-Aziz (2001), it was proven that Bangladeshi
workers are in Malaysia to finance their family in their home country by
lengthening their stay in Malaysia and giving back the money to the country. Although
the earning capacity is small, But then, in the long haul, it may damage the country’s
economy especially from aspects of currency exchange and country’s balance of
payments (BOP) when reduction in currency value occurs, and then soon it will
affect the country’s reserve (Mohd Na’eim Ajis, Mohamad Faisol Keling, Zaheruddin
Othman and Md. Shukri Shu’ib, 2014).
Literatures have indicated that the
direct impact on economy and productivity are mainly due to the issues in
wages, levy, tax and outflow of Ringgit. It’s an impact tot the performance of
the nation to have face shortage of local workforce that is due to unhappiness
in the wage system and having a large number of foreign workers who are
invisible and do not contribute to the levy, tax but enjoys the ringgit and
scents. Malaysia economy cannot afford to deal with this as we have a vision to
look forward to in 2020. The current ringgit value is dropping internationally
and this adds up to the miserable situation. If left unattended, a wide range
or gap will occur within our society and bring about conflict of interest.
2.8 Indirect Impact
2.8.1 Social,
Political and Cultural Impact
Economy
is not the only aspect affected with the inflow of foreign workers. According
to the Ministry of Home Affairs Malaysia (2014), 9496 criminal cases in
Malaysia in 2014 was committed by foreigners (Noranifitri Md. Nor, Yahaya
Ibrahim and Wan Abd. Aziz Wan Mohd Amin, 2015).The same study found that from
the findings of focus group interview, it shows that second generation Felda
faced social impact caused by foreign workers influx namely economy, social,
skill, security, health, education and environment. The influx of foreign
workers gives the negative impact such as lack of employment opportunities for
the second generation of Felda and rampant crime problem. Problems affecting
social welfare second generation in the fulfilling quality of life.
Prior study conducted by Hamzah
Abdul-Rahman, Chen Wang, Lincoln C. Wood and Shu Fung Lowa (2012) found that
there are quite a few negative impact of foreign workers such as bad
workmanship by the foreign workers as they are low skilled and mostly without
basic education. Other than that, local labor become less interest to work in
construction industry, slow pace in technology advancement, increment in
criminal activity and existence of illegal workers. An extensive use of
semi-skilled and unskilled foreign labour will inhibit the use of new
technologies within firms since it is much cheaper to engage in labour
intensive tasks using older technology. Nonetheless, in certain sectors, mainly
construction, plantation and low-end services sectors, foreign labour is
crucial since not many local labours are opt to work in these sectors.
Therefore, foreign labour is required to sustain these sectors (Rahmah Ismail
and Ferayuliani Yuliyusman, 2014).
In fact, some argued that the influx
of foreign workers will only lead to problems in the social, economic and political
areas of the importing country because many of those entered illegally (Nasri
Bachtiar, Rahmi Fahmy and Rahmah Ismail, 2015). The National Professor Council
(2016), made a statement in the press on the foreign workers issue. The
president mentioned that high and continuous dependency on foreign workers will
reduce productivity in the long run. This is due to lack of initiative from
employers to be technologically innovative in their businesses This statement
is also supported by Thangavelu (2012), firms utilize less capital and
technology intensive investments due to foreign workers influx.
According to Mohd Na’eim Ajis,
Mohamad Faisol Keling, Zaheruddin Othman and Md. Shukri Shu’ib (2014), foreign
workers contribute to the poverty in Malaysia due to the economy impact on
locals. On top of that, foreign workers also has the possibility to threaten
the social aspect of the country, such as health. There are foreign workers who
enter the country without going through health check up required, and as a result,
they bring along contagious disease.
With the uncontrollable entry of
foreign workers, eventually it will be a threat to the national security especially
in the economy and social context. This phenomenon has also given threat to the
amity of the people, when a local worker is forced to compete with a foreign
worker to get employed. Prior study by Ramesh Kumar Moona Haji Mohamed, Charles
Ramendran SPR, Peter Yacob (2012), supports that numbers of foreign workers are
increasing whereby assisting companies to save costs by employed labors in
lower scale salary. But, this caused unemployment rate increased among the
local workers and thus uncertainty is possible at the same time by increase in
such activities like crime, culture and illegal strikes. Besides, it will be a
challenge to Malaysia for preparing the nation towards high income country. Malaysia
being a multiracial nation has many ethnicities. The presence of foreign
workers have now outnumbered one of the ethnicity and this could affect the
Malaysia culture as there are many of them. Cultural aspect must be protected
before it becomes a culture shock for Malaysians.
2.9 Malaysia
Initiatives to curb the foreign workers issues
For decades,
Malaysia has been trying to implement various initiatives to overcome the
foreign workers issues. Prior studies from the 1970’s up to now have been
recommending action plan for the issue. However, from time to time
implementation strategies changes. Something that cannot be done before not
necessarily means it cannot be done today. Currently, Malaysia has the fund and
resources to implement strategies.
In the 2016 budget, the Prime
Minister of Malaysia announced effective from 1 July 2016, the national minimum
wage will be increased from RM900 to RM1,000 per month for Peninsular Malaysia and
from RM800 to RM920 for Sabah, Sarawak and the Federal Territory of Labuan. The
intent is to reduce the burden of the rising cost of living. However, what is
the difference between locals and foreign workers? Yes it can help the locals
but the frustration is when the locals are treated the same as foreign workers
and given the same benefits.
According to Rahmah Ismail and
Ferayuliani Yuliyusman (2014), Malaysia should encourage local labours to
replace jobs held by unskilled foreign labours by offering a better wage scheme,
introducing a better working condition and job security for the unattractive
sectors like agricultural and security sectors, introducing a more stringent
law to prevent the unskilled foreign labours from entering the country and more
effective enforcement of the law, for example, more stern punishment and allowing
the unskilled to work only in specified sectors where labour shortages exist
because of the reluctance of local labours to work in such sectors like agricultural
and security sectors.
World Bank’s (2015) country manager
to Malaysia, Faris Hadad-Zervoz stressed that the recommendations have to be
complemented by human development policies to create an adequate supply of
relevant educated Malaysians who are productive to meet the labour demand not
only for 2020 but beyond. This is indeed true as the education system will make
a difference in the employment sector. Generally, there is a miss-match between
the industry needs, qualification and education. Therefore even low skilled
workforce finds it tough to secure a job. One of government initiatives to set
up the Skill Development Centre is a good platform. For instance in Negeri
Sembilan, the Skill Development Centre works closely with companies to ensure
the graduates secure a job as soon as completion of studies. This way it is
sure to give priority to locals.
2.10 Other
countries’ practices to curb the foreign workers issues
In the Middle East, the foreign workers issue was in
an alarming state hence the the labour laws enacted in most of the GCC
countries stressed that employment should be offered firstly to the national
citizens, secondly to the citizens of other GCC states, thirdly to non-Gulf
Arabs and only then to other foreigners. That approach was in line with the
overall Arab position on the issue (Andrzej Kapiszewski, 2006).
On the
other hand in Singapore, with the persistence of low-wage workers, negative
productivity growth in recent years and the growing discontent among local
workers over competition from foreign labour, new policy measures were
introduced in the 2013 budget to further tighten the inflow of foreign labour,
reinforce the impetus to economic restructuring and quality growth and improve
the employment prospects for locals. The new measures involved increases in
foreign worker levies to further moderate demand, improve foreign workers’ skill
sets and reductions in sectorial foreign worker quotas. Minimum qualifying
salaries of higher-skilled employment pass holders were also raised to improve
employment prospects and address the issue of displacement of local graduates
and older mid-level professionals (Tat and Toh, 2014). In addition to that,
Singapore also practices minimum wages to raise the well-being of low wage
residents and provide low skilled work to senior citizens who are still capable
of working. IAs such, foreign workers are not needed for low skilled work.
Thailand is another country that
welcomes foreign workers to help the economy boost. The government has a
Memorandum of Understanding with the employers who seek to bring in foreign
workers. In that way, they are able to monitor and track and some incentives
are given to the employers who register all foreign workers (Bureau of Public
Relations, 2015). The benefit of doing such strategy is employers will be
honest and proper inflow of foreign workers into the country rather than trying
to bring in illegal foreign workers.
3.0 Discussion
The debate
on foreign workers is unstoppable. Many forms of attack from the employers,
employees, agencies and public will always be against the government. There is
always a need and a limit. In this foreign workers matter, there is a need
still despite all the negative issues that have aroused and that we can expect
to arise in time to come. This is also partially because of the lack of
workforce for the 3D jobs which are dirty, difficult and dangerous. Today, we
see foreign workers who are ever willing to do these jobs and locals shun away
from doing it. 3D is a term that that is commonly used to describe jobs in
industries that can potentially be dirty, dangerous and difficult. In Malaysia,
jobs in the construction, plantation, automotive maintenance, cleaning services
and other similar vocational occupations fall under the 3D category. Hence the
need for foreign workers will exist.
Noting on all the impacts from the
presence of the foreign workers, the dilemma still continues. Many other
countries are also struggling and implementing strategies as possible as they
could. Within this entire struggle, Japan on the other hand is welcoming
foreign workers with new policies that include a pledge to deliver the world’s
fastest permanent-residency cards for skilled migrants. So it’s here and there
as always. It will be tough to get locals onboard, doing what the foreign
workers are doing. And, it will be almost impossible to cut off foreign workers
from our workforce because we need them, especially the skilled ones. Microsoft
co-founder and chairman Bill Gates once said: “We rely on skilled foreign
workers for their math, science and creative abilities as well as their
cultural knowledge, which helps when localizing products for world markets.” For
countries like Japan who exports almost everything, job opportunities are like
mushrooms. So they are able to cope the locals and foreign workers.
Malaysia government has tried many
ways to implement strategies but also to realize that enforcement activities
also require an integrated approach among all the agencies involved.
Immigration is not the only agency to play its part. Employers especially have
a huge part to play too. Learning to think out of the box is important. Cost
cutting is not the ultimate aim. It is about giving back to the society.
Singapore’s strategy to offer employment to senior citizens is a respectable
strategy. It reduces the number of old folks home and provides an active lifestyle
for them.
The Immigration department also has
to implement stricter rules and regulations for employers. Proper documentation
and application of visa must be consistent and up to date. Immigration should
make more visits to industries that largely depend on foreign workers in
Malaysia such as construction and manufacturing. Stringent enforcement must be
maintained and government should give good support to all agencies
involved.
4.0 Conclusion
Malaysia
has a long history of relying relatively heavily on foreign, immigrant workers
in both high-skilled and low-skilled occupations. We can’t live with or without
them. Foreign workers’ presence has positive and negative impact on Malaysia as
a whole. The problems can only be solved if we see it from the root. It’s
important for the relevant ministries to tackle this issue before it gets out
of our hands. Apart from focusing on the foreign workers, the local workers
should be given priority. Jon opportunities should firstly be given to local
skilled and unskilled workforce. There is a need to provide more benefits to
local than foreign workers. Malaysia should introduce more attractive schemes
for locals, provide skilled training and competitive wage structure.
For future recommendations, the
study should explore more on the strategies used by local industries to curb
the foreign workers issues. A proper policy should be in place as a guidance to
manage the foreign workers. Further studies can include on how to attract
locals to join the workforce and the strategies used by other countries.
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