Set clear target for reduction - Labour Law Blog

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Feb 15, 2016

Set clear target for reduction

I AM writing in support of the view expressed by a highly-respected economist, Dr Yeah Kim Leng, on the reduction of cheap foreign labour employed in the private sector. Dr Yeah suggested that it should be done in a phased manner with a three- to five-year lead time to all employers so that they are given a reasonable period to make the necessary adjustments to their methods of production. A rushed approach will be too disruptive to our economy, which has become so addicted to foreign labour that many industries will collapse if it was withdrawn abruptly.

It is not comforting to hear that the Government is allowing another 1.5 million Bangladeshi workers to come in, considering that Malaysia already has six million foreign workers with four million of them being illegal. The large number of illegal or undocumented workers is cause for concern. As the total size of our labour force is estimated at 12 million, the proportion of foreign workers is indeed staggeringly high.

I recall that in Germany, when they found that the influx of Turkish, Romanian and other foreign workers to the labour force was causing the ratio to rise fast to about 10%, there was alarm that if the trend continued, there would be foreign ghettos springing up in German cities. In Malaysia, the ratio is now 50% of the labour force.

In Kuala Lumpur, we are already seeing colonies of migrant populations living in shanty houses springing up next to well-planned residential areas. There are concerns about hygiene and the spread of diseases by flies that thrive on the dirty drains and makeshift toilets in these slum colonies. In wet markets, it is well known that local traders are being displaced by the more aggressive foreign competitors.

Although one can argue that this competition is good for the consumers as they can buy cheaper from the foreigners operating the shops, food stalls and restaurants, and that in a tight labour market, the foreigners are not taking away jobs from the locals, there is the risk that if our economy goes into a recession and workers are retrenched, the unemployed Malaysians may take out their frustration on the foreigners in their neighbourhoods. This actually happened in Europe when their economy went into prolonged recession, jobs became scarce and youth unemployment soared. Right-wing gangs of young protesters went on a rampage at the foreign ghettos and their shops. Every crime was blamed on the foreigners and became an excuse for roaming thugs to attack foreigners at random. Racist politicians made the situation worse by championing the anti-foreign sentiment.

We all agree that Malaysia needs foreign skills to power its growth and, we can say here, the more highly-skilled the foreign workers, the better for our economy. We also need unskilled cheap labour in certain sectors like construction and the oil palm industries. Domestic maids should continue to be imported to free our married women to go out for work.

On humanitarian grounds, the Government is setting minimum wages and conditions of employment for foreign workers to safeguard their interests against unscrupulous and cruel employers. The children and families of foreign workers also have access to our education and health services, provided of course that they pay for the services.

It is right that we should treat foreign workers with humanity as they are contributing to our economic growth but at the same time, we should also be more selective in allowing more foreign workers to come in and be very clear about the targets for gradually reducing their percentage in the labour force.

When the private sector is convinced that the Government is serious about limiting the use of foreign labour, and employers are given clear guidelines to make the necessary adjustments, they will accept that they have to begin using more automation in the production lines, at petrol stations or in construction work.

Currently, because of the habitual flip-flops in government policy, no one in the private sector believes it is necessary to prepare for automation. In view of this credibility gap, there is a cynical view circulating about why the approved permits for wholesale import of foreign labour continue to be issued liberally.

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