For decades, Malaysia has relied on foreign labour, also known as migrant workers in key sectors of the economy. The key sectors include domestic help, manufacturing, agriculture, construction and services such as F&B. Between two and five million migrant workers; both documented and undocumented were working in Malaysia before the pandemic[1].
However, the number has dwindled to 1.7 million migrant workers in Malaysia[2]. In the past, experts have stated that without migrant workers, the industries and businesses are handicapped. Time and time again, experts have warned that our reliance on migrant workers is similar to a ticking bomb.
A reality that is currently happening in Malaysia, the bubble had burst as the pandemic saw migrant workers packing bags and leaving the country along with the hiring freeze as an attempt to combat the spread of COVID-19.
Associations Call For Removal Of Hiring Freeze Left Unheard
The gears were starting to move late last year as different employers’ associations have called for a hiring freeze and quota to be removed. With the announcement declaring the nation is moving towards endemicity, industries were unprepared.
Within the two years buffer, the vacancies in different sectors remain unfilled. The locals have often viewed the low-wage, dirty condition jobs or the 3D jobs as undesirable. Day in and day out, the nation is raking up losses as productivity falls with the limited headcount in all sectors.
At the same time, employers continue to face difficulties in filling the shortages in the unskilled general worker category with local workers not keen on certain jobs and industries, especially in the ‘3D’ sectors. – Tan Sri Soh Thian Lai, president of the Federation of Malaysian Manufacturers (FMM)[3]
The Malaysian Employer Federation stated that employers have applied for 475,678 migrant workers to fill in the vacancies[4].
There are 290,248 openings in the manufacturing sector, 77,000 in the service sector, 53,854 in the plantation sector, 43,519 in the construction sector, 11,037 in the agricultural sector and 20 in the mining and quarry sector[4].
But only 2,605 applications have been approved since the start of the year[4]. Employers are waiting with bated breath for their businesses to be able to pick up the pace and return to their glory days.
Despite employers trying hard to resolve the worker shortage, especially of foreign workers, the approval rate of 0.55% of 475,678 applications is indeed a major concern since it could derail efforts by businesses to recover quickly. – Datuk Dr Syed Hussain Syed Husman, Malaysian Employers Federation (MEF)[4]
In this three-part series, we highlight the crucial role migrant workers have played in the Malaysian economy in different sectors. The lack of migrant workers in Malaysia have been felt in households, restaurants, hotels, farms, factories, plantation and construction sites.
The repercussions have reverberated throughout the nation as families that relied on domestic workers do not have a helping hand at home. The service sector is unable to cope with the onslaught of tourism activities and diners flocking to their establishments.
With the farms and F&B sector struggling, prices of goods and food are increasing. Other sectors are eyeing the same changes to keep their businesses afloat.
In this first part of this series, we examine the effect of foreign worker shortages in industries that are closer to home.
Malaysian Households Desperate For Domestic Helpers
Now that the economy and social sector are starting to recover, these women may now be looking to return to the workforce. Question is, however, who will tend to their children? Domestic helpers could help fill in this gap. – Prof Dr Melati Nungsari, Asia School of Business assistant economics professor[5]
The presence of a domestic worker or kakak is common in Malaysian middle and high-income households. With the growth of dual-income households, it became a necessity. Juggling work and the responsibilities at home is no easy feat, especially with young children or elderly parents in tow. In these cases, families solicit the help of domestic helpers.
Working spouses can manage the housework, but when it comes to small children and the elderly they definitely need help because (the family) cannot afford to be at home all the time. – Zarina Ismail, president of Pertubuhan Kebangsaan Sumber Manusia (PUSMA)[6]
There are 86,084 foreign maids currently in the country. Most are Indonesian citizens (59,605), followed by the Philippines (22,803), Vietnam (1,031) and Cambodia (976)[7].
The numbers were as high as 270,000 in 2008. But there have been moratoriums over the years due to the reported abuses of domestic workers[8].
During the pandemic, many ended their contracts and returned home.
30,000 Foreign Domestic Workers Needed
Following the pandemic imposed hiring freeze, the sector needs at least 30,000 foreign maids in Malaysia[9].
Since 2016, negotiations have been in place to allow the entrance of domestic helpers.
Over the past year, most families have felt pressured because they failed to get help to manage their affairs in their homes. The situation is very urgent because many families in the country are completely dependent on maids because they work and have businesses. – Zarina Ismail, president of Pertubuhan Kebangsaan Sumber Manusia (PUSMA)[6]
To prospective employees, a more stringent Memorandum of Understanding (MoU) between Malaysia and Indonesia is a safety net that has been a long time coming.
In my opinion, this (new MOU) is very good because it can protect our workers over there.
I did not get a day off back then. I had to work all the time, even when I was sick. With this new agreement, our migrant workers are taken care of. – Syamsinar, 38, a prospective Indonesian domestic worker [10]
Some terms and conditions however, are contested in the newly signed MoU with one of the largest exporters of domestic labour; Indonesia.
Pushbacks On Domestic Helpers’ Minimum Wage
The Indonesian Ministry of Human Resources has insisted the wages of domestic helpers should be aligned to the newly increased Malaysia’s minimum wage of RM 1,500. A call that potential employers have reacted to with mixed feelings.
Some would be willing to hire provided that the recruitment agencies’ fees are tackled first.
However, what needs to be looked into are the agent fees that can be too high. I even encountered one that asked RM30,000 for agent fees. That’s why employers tend to pay much lower monthly wages to their maids, which they believe was to compensate for the agent fees. – Samantha Lum, a potential employer[11]
Some had suggested that the minimum wage can be paid as long as the domestic helper would pay for other costs of living.
Malaysia’s RM1,500 minimum wage took into account the cost of living including housing rental, groceries, meals, petrol and more. We will be happy to pay a salary of RM1,500 provided that they pay for other costs of living. – Twitter user @leoshikamaru[11]
The Human Resource Ministry of Malaysia set RM1,200 as the minimum wage for domestic helpers.
Indonesia, in this instance, is phasing out sending their domestic helpers leading to a prolonged shortage of domestic helpers.
Experts pointed out that there should be a deeper inspection of how we pay and treat domestic workers in Malaysia. In the past, there have been notable headlining abuses and exploitations against domestic helpers, and source countries such as Cambodia have even banned exports of domestic workers to Malaysia.
An Indonesian who is interested to work in Malaysia, Milawati, hopes that the new agreement will allow her to work legally in Malaysia. Milawati, who used to work as a caregiver in Malacca was tricked twice by an agent. She was forced to pay 7 million rupiah (US$487) to work illegally in Malaysia.
But more than anything, she hopes her potential employer would treat her well.
Most importantly, (I hope) the employer is nice. I get time to pray and rest – Milawati,40, a potential Indonesian domestic worker [10]
The Shortages In Different Sectors
As families seek adjustments in their lifestyle while waiting for domestic helpers to arrive, the service sector in Malaysia is currently understaffed, and the current workers are burnt out.
With no restriction of operating hours and hotel occupancy, the service sector is in need of foreign workers to aid them in the path of business recovery. The higher price tags on groceries such as chicken and vegetables is on the incline, and one factor behind this is the lack of farmhands to meet the market’s demand.
In the second part of the series, we shed light on how the service sector and farms are performing delicate balancing acts in satisfying their customers and grappling with the low head count.
Explore our sources:
- A.Abdul Wahab. (2021). “I regret to be in Malaysia”: COVID-19 and work migration. MIDEQ. Link
- A.Raghu. (2022). Malaysia Looks to Ease Migrant Worker Shortage as Borders Reopen. Bloomberg News. Link
- A.Hani. (2022). Workers shortage hamper productivity, recovery. The Malaysian Reserve. Link
- D.B.Krishnan. (2022).‘Speed up foreign worker approval’. New Straits Times. Link
- A.Hani. (2022).Improve treatment of domestic helpers to resolve shortage. The Malaysian Reserve. Link
- I.H.Aziz. (2021). Lebih 10,000 keluarga ‘hilang punca’ tiada amah. Berita Harian. Link
- FMT Reporters. (2022). Maid abuse reports stall MoUs with Indonesia, Cambodia. Free Malaysia Today. Link
- Straits Times. (2018). Indonesia mulls ban on sending maids to Malaysia after abuse case. Link
- The Sun Daily. (2022). 30,000 employers in dire need of domestic helpers. Link
- K.Siregar. (2022). ‘I desire to try my luck’: Indonesian domestic workers see hope for jobs in new MOU with Malaysia.Channel News Asia. Link
- V.Babulal &T.Z.Sofia. (2022). Those who need domestic workers willing to pay RM1,500. New Straits Times. Link
