At the start of the year, the Malaysian Employer Federation applied for 475,678 migrant workers to work in the country[1].
The service industry, households and farms are in need of helping hands but the shortages are felt more severely in industries.
The shortages are apparent in sectors that fuel the nation’s Gross Domestic Product (GDP). The manufacturing sector requires 290,248 employees, the plantation sector is in need of 53,854, and the construction sector is looking for 43,519 to start and complete ongoing projects[1].
Despite the constant push by the federation, only 2,605 applications have been approved since the start of the year. Employers are recording losses, and the repercussions would be on the nation’s prosperity.
Manufacturing Industry Facing Hiccups Due To Manpower Shortage
The shortage of manufacturing workers is worsening following the increase in demands for manufactured chips and gloves.
It is estimated that the manufacturing sector is facing a 40% manpower shortage. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF) [1]
The manufacturing industry needs 120,000 workers. Among the numbers, 15,000 chipmakers are required in the rise of global chip demands. Glove-making factories need 12,000 workers to complete their piling orders[2].
Since 2020, the manufacturing industry index which measures the production rate of industrial commodities has recorded a drop from 51.6 to 50.1 as jobs continued to be shed away [2].
Chipmakers are turning away customers, locals are not interested in working in the industry and many who do join leave in less than half a year. – Wong Siew Hai, president of the Malaysia Semiconductor Industry Association [2]
Shifting to automation may be the answer to manufacturers’ woes but the priority is to hire more workers.
Automation is economically viable only for high-volume production. There are limits to what computers and machinery can do.
There are a lot of changeovers in the manufacturing processes which require human hands unless the products are of such high value or volume to justify the need for a robotic arm or conveyor belt system. – Datuk Lee Teong Li, Federation Of Malaysian Manufacturers in Penang [3]
Holdups On The Arrival Of Foreign Workers
The entrance of Indonesian foreign workers is riding on the MOU signed by Malaysia and Indonesia on the 1st of April 2022. Despite this, Indonesia is facing an issue as migrant workers are held back to assist with building the new capital city in Kalimantan.
Indonesia now lacks foreign workers to send after their government recalled workers working abroad to develop their new capital in Kalimantan. – Dr Sukumaran Nair, secretary of Pertubuhan Kebangsaan Agensi Perkhidmatan Swasta Malaysia (PAPSMA)[4]
The MOU between Bangladesh and Malaysia despite the terms being agreed on in December, Bangladesh has reservations about the proposed hiring process. The Bangladesh government fears that the suggested hiring process would only lead to increased costs for the workers and debt bondage.
Dhaka is putting Malaysia at arm’s length over the request of hiring 200,000 Bangladeshi workers within a year, and for good reasons.
Our main focus is our workers’ welfare and rights. We’re making sure they get standard wages, they have proper accommodation, they spend minimum cost for migration and they get all other social security. – Imran Ahmed, Bangladesh’s expatriate welfare and overseas employment minister [2]
Lesson Learnt From Previous Mistreatments
The Bangladesh government’s focus is just following the alarm raised by Bangladeshi workers in Malaysia at the height of the pandemic. A 25-year-old Bangladeshi worker had his work permit revoked following an interview with Al Jazeera following his expose of the discrimination faced by migrant workers.
I did not commit any crime. I did not lie. I have only talked about discrimination against migrants. – Mohammad Rayhan Kabir, A Bangladeshi national arrested by Malaysian police[5]
Another incident involves a Bangladeshi production line supervisor of a glove-making company in Malaysia. In an interview with VOA, he admitted that he and his 29 roommates were never tested before the area was placed on an enhanced lockdown [6].
The video he shared also showed the cramped living conditions he and his roommates had to face. 30 of them live in a room packed tightly with bunk beds and share two bathrooms among them. No air conditioning was installed and the fans were insufficient to keep them cool at night.
We’ve been very worried about living in one room with 30 people because if one person gets it they can bring it back. We’re worried, but we have no choice. – A Bangladeshi production line supervisor of a glove-making company in Malaysia[6]
This is also the reality for 91% of migrant workers in Malaysia[7]. Most live in sub-par accommodation and do not meet Malaysia’s minimum housing standards. One of the perpetrators is greed.
It’s about cost-saving. If an SME only has 2-3 foreign workers, would they be willing to spend RM10,000 to RM20,000 to renovate and set up accommodations? Rentals cost up to RM1,500 to RM2,000 a month.
They would rather buy a cabin and place it in the factory for them to stay. It’s more convenient for them. But this is not the proper way. – Jonathan Low, Executive Director of STF Saujana Sdn. Bhd[7]
But living conditions are one of the many struggles faced by migrant workers. Some were paid lower than their local counterparts.
There are workers who have the experience of getting different salaries between Indonesian workers and local workers based on skills. With more machine operating skills, Indonesian workers are paid less than local workers who operate fewer machines. This condition is unfair. Even so, they inevitably have to accept this fact. – Anecdotes from a focus group interview with migrant workers in Penang[8]
It should no longer come as a surprise with many anecdotes of mistreatments that many Bangladeshi are working in the textile sector back home where things are looking up.
The same situation also happened in Bangladesh when the textile sector in the country began to offer employment opportunities and better salaries than what the people who work in Malaysia enjoy. – Dr. Sukumaran Nair, secretary of Pertubuhan Kebangsaan Agensi Perkhidmatan Swasta Malaysia (PAPSMA)[4]
Raw Material Price Is At All-Time High But The Workforce Is At All-Time Low
Malaysia’s economy lies heavily in raw materials such as palm oil and rubber. Despite the sky-rocketing demands during the pandemic for medical gloves, the rubber industry raked up losses amounting to RM 30 billion due to the lack of workers[9]. The same amount of high loss is also recorded by the palm oil plantations.
Palm oil plantations face an acute shortage of harvesters, with planters losing more than RM30 billion and the government, consequently, losing revenue due to the loss in palm oil yield. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF)[1]
Other sectors such as F&B and construction witnessed their foreign employees lured to work in the plantation industry due to the better pay and offers.
The salary of harvesters could reach around RM2,500 with accommodation provided. – Jufitri Joha, President Of Malaysian Youth Council (MBM)[10]
But the plantation industry is still experiencing worker shortages. The current foreign workers in plantations are experiencing fatigue with the added pressure.
I start work at 7 in the morning and finish around 5 to 6 in the evening. The problem now is that it’s very tiring, as I’m the only one working, there’s no one else, it’s just me at the moment. – Ari Rohman, a migrant worker at a palm oil estate[11]
In September 2021, the government approved 32,000 of the 72,000 foreign workers required for the plantation industry, but none have entered due to permitting holdups[12].
We need the harvesters and most of them come from Indonesia. They are very skilled workers in this field. It is a very tough and difficult job that locals wouldn’t be interested in. – Datuk Mohd Nageeb Abdul Wahab, Malaysian Palm Oil Association chief executive officer[13]
Locals Remain Disinterested To Work In Plantations
There have been different parties urging for the freeze to be lifted earlier but the government proclaimed that there has to be an assurance that locals didn’t want the jobs.
Our palm oil industry may not be able to compete with neighbouring countries due to higher costs of sales and wastage. The government should address the shortage of more than 72,000 workers in the plantation sector. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF)[1]
But the jobs offered in plantations have often been shunned by the locals due to the work nature of being dirty, dangerous and difficult (3Ds). Malaysians rather earn income as e-hailing drivers.
Why would they work in a plantation sector when they could drive a Grab? It’s not an employer’s market anymore. The scenario has completely changed. – M. Saravanan, Human Resources Minister[14]
This long wait has repercussions on the nation’s economy, especially the oil palm bunches that are now ripe for harvesting.
The sad reality is that Malaysia is missing the golden opportunity presented on a platter as we are not able to cope with the harvesting of all the oil palm bunches at the appropriate harvesting rounds set against the present limited labour force. – Malaysian Estate Owners’ Association (MEOA)[12]
The Repercussions Of Workers’ Shortage On Large Corporations
Large corporations are predicting the worst-case scenario and possible knock-on effects on the business including the shutdown of operations and laying off workers by extension. Sime Darby Plantation Bhd claimed that the shortage in the workforce caused RM10 – 12 billion in revenue loss[3].
This in turn impacts our national revenue in terms of taxation and duties. It also affects our stock market — asset price valuation, and such. – Jason Loh, EMIR Research head of social, law and human rights[15]
The government addressed the massive gap left by foreign workers by placing 80% of prisoners with good behaviour under the parole system [16] to be assigned in industries where foreign labour shortage is apparent.
But there is an existing stigma held by employers when it comes to hiring ex-convicts that are yet to be overcome. Alarms have been raised by international boards such as US Customs on the allegations of exploitation of parole workers by large corporations in the palm oil industry.
If exploitation and abuse are taking place against Malaysians, what’s more against the foreign workers who are far from home and with no place to seek help. There are testimonials from plantation workers that the practice of taking away their passports and withholding their salary to ensure the foreign workers would not run away is still ongoing.
A worker in the plantation sector for 2 years has not been paid for 2 full years. Anything is difficult without a national ID (KTP). The passport is also held by the employer. A report has been filed but no action has been taken. – Anecdotes from a focus group interview with migrant workers in Penang[8]
But this act isn’t just rampant in the plantation sector as the president of an F&B association has suggested that retaining workers’ passports should be done to ensure the workers are staying in their establishments.
The government has announced that employers should not retain workers’ passports, so it is easy for the workers to walk away. Employers who have paid the levy, insurance and Social Security Organisation (Socso) contributions can only watch helplessly. – Datuk Jawahar Ali Taib Khan, president of Persatuan Restoran Muslim Malaysia (Presma)[17]
Perhaps, this practice that treats foreign workers as commodities with no aspirations is setting back the approval of Indonesian and Bangladeshi governments to send their citizens.
Halting Progress On Construction Sites
The construction sector currently employs 429,552 migrant workers[18]; 59% are Indonesians, followed by 13% of Bangladeshis, and the remaining 28% are from other countries such as Nepal, Myanmar, India, Vietnam and Sri Lanka[18].
Following the pandemic, many were left in the lurch with no communication received from their employers. Some were unable to work due to the lockdown. Some were kept in the dark in terms of their employment status following work permit expiration.
About 150,000 foreign workers, mainly Indonesians, have left Malaysia since last year. They are unable to return to the country due to the MCO, leaving about 330,000 foreign workers in the construction sector. – An anonymous senior management officer from the construction industry[19]
The wages of construction workers are paid on a daily or a weekly basis, and the lockdowns have caused them to lose their source of income.
We are paid on a daily basis. Since none of us are able to work since the MCO, we have no money. – Nurul Islam, an Indonesia foreign construction worker in Shah Alam[20]
The construction sector has claimed that there is ongoing workers’ “poaching” from other sectors.
(Palm oil price is good now) and they (palm oil industry players) are willing to pay any fee to hire workers, and one of the victims is the construction sector. – Datuk Seri Fadillah Yusof, Senior Works Minister[21]
Due to the shortages, major construction projects such as the Pan Borneo Highway and new housing projects would face delays.
The country’s construction sector is also facing a serious shortage of workers that has caused major construction projects to fall behind schedule. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF)[1]
But the irony is while the construction workers are building tall buildings and houses for Malaysians, many live in overcrowded and unhygienic accommodations. It is not uncommon for construction workers to live in converted containers with poor access to clean water and sanitary facilities.
I live together with other 12 Bangladeshi and Indonesian workers in the same shared cabin, about 15 feet x 10 feet. There is a shared kitchen and toilet outside the cabin. There were no proper cooking facilities. We shared everything including glasses and plates, and there was no proper piping system to get clean water. At night, we slept very close to one another. It was impossible to mind the distance. – A Bangladeshi worker in Malaysia[22]
The migrant workers in construction sites experience terrible working conditions and require tremendous physical strength.
Working in a factory might be different but working in construction is difficult, hot, rainy and heavy. I have to lift heavy cement as well. – Anecdotes from a focus group interview with migrant workers in Penang[8]
Even in the dire condition of hiring workers, locals that have stepped in their shoes did not fare better being exposed to mistreatment from employers.
I contracted COVID-19 at work but instead of providing aid, my former employer decided to cut RM 300 from my salary. I didn’t mind the hard labour, as beggars like me can’t be choosers, but I would have stayed if the employer was fair. – Aditya Akasha, A Malaysian Who Worked As A Construction Worker For 7 Months Before Quitting[23]
What Is Being Done To Address The Laments Of Workers’ Associations?
The unanimous need and cries for the immediate entrance of migrant workers are quaking all major industries in Malaysia. The Human Resource Minister, M.Saravanan has assured us that progress is being made. But the catch is there would be a long wait of up to 6 months.
It is estimated that under the normal process of applying for new foreign workers, it may take up to six months before they can start working. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF)[1]
Despite the MOU with Bangladesh and Indonesia being finalised, the arrival of migrant workers from both countries is still up in the air due to finer details still being tweaked.
I believe the Indonesian government said the entry of any foreign workers from Indonesia for any sector is dependent on the signing of the MoU for the domestic helpers first.– Datuk Mohd Nageeb Abdul Wahab, Malaysian Palm Oil Association chief executive officer [13]
The F&B sector has taken things into its hands by dangling rewards for locals to tide over. Some had to make adjustments such as reducing operation hours or closing their restaurants twice a week to address staff burnout.
The Malaysian Employers Federation in the past had put forth a suggestion to hire UNHCR cardholders to the government. However, with no positive response.
MEF had on many previous occasions proposed short-term measures through the utilisation of UNHCR cardholders, simplifying the procedures for the recalibration of illegal immigrants and other sources of available labour to address these issues. But no proper response was obtained. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF) [24]
Amongst the complaints of different establishments is also the low uptake by locals to work in the 3D sectors, and with the border no longer closed, Malaysians are doing 3D jobs in neighbouring countries with better pay and treatment.
Even if you give them the stars and the moon, I don’t think locals will last long – they might use our restaurant as a training ground and later jump to Singapore for a better exchange rate. – Datuk Jawahar Ali Taib Khan, president of Persatuan Restoran Muslim Malaysia (Presma)[17]
A Good Time To Reflect On How Migrants Workers Have Been Mistreated
Some had suggested rebranding the 3D sector to attract more youngsters and locals to be part of it.
But the bottom line is we observe how our predecessors have treated migrant workers and know well enough to avoid it. Experts have suggested that wages should be increased when it comes to strenuous physical labour, the compensation received by those in the 3D workforce has been meagre. The wage increment to RM 1,500 sees discourse and rebuttals by associations.
If wages and treatment do not change, I don’t see much changing in this sector aside from it experiencing more shortages and potentially pushing Malaysians into these jobs, which typically are lower-paying with not many amenities. – Prof Dr Melati Nungsari, Asia School of Business assistant economics professor[9]
There needs to be a consideration in giving the migrant workers or those in the 3D sector dignified treatment, proper work conditions and accommodation. From the stories of migrant workers, there is a sense that their labour can easily be disposed of and their shortages are just a matter of statistics.
Let’s not forget that the buildings that became the nation’s landmarks were built by the sweat and tears of foreign labourers. Entrepreneurs who are carving success and profits rely on domestic workers to attend to their domestic duties and our food has been handled and served by the hands of foreign workers.
The shortages, of course, are affecting our economy as we speak. But perhaps, a lesson that we should reflect on from this critical issue is that migrant workers have had enough of the mistreatments in the face of earning an income.
Our modus operandi of paying little and treating poorly will not work anymore. With higher wages and better policies surrounding the treatment of migrant workers, we could potentially lure them back into our country, but given the current trajectory, this would require a quite radical shift. – Prof Dr Melati Nungsari, Asia School of Business assistant economics professor[9]
Enough is enough when it comes to exploiting migrant workers. Changes in the way we perceive and treat workers in the 3D sector may require a radical shift, but all of us have a part to play. Who knows in the future, locals would race to grab jobs from the scorned 3D industry.
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