The rapid economic growth in Malaysia in recent years can be partially linked to positive role of foreign workforce that accounts for about 20% of the entire human resource base (Bedi, 2008, par. 4). Moreover, continuous influx of both skilled and unskilled workers in this country has reversed myriad of negative economic effects by narrowing labor scarcity gap.
Essentially, foreign workers in Malaysia are widely spread across most sectors of the economy but most importantly, they dominate industries that accommodate unskilled labor force such as manufacturing, construction and agriculture (Kadir et al., 2005, p. 42). Foreign workers who mostly originate from Indonesia, Bangladesh, Myanmar, Nepal, India and Vietnam flood into Malaysia lured by the promise of decent employment which is often absent in their own countries (Bedi, 2008, par. 6).
However, the positive perception on significant role played by foreign workers is slowly changing with time (Bedi, 2008, par. 2). The fact that foreign workers in Malaysia play significant role in nation building is not disputable. However, the big question is whether the perceived benefits surpass cost. This essay explores both the positive and negative attributes of foreign workers in Malaysia.
At some point during 1980s, construction industry in Malaysia was hard hit by acute shortage of labor due to the rapid pace of development (Karim, Abdullah & Bakar, 1999, p. 122). Subsequently, wage rates increased tremendously but demand for labor still exceeded supply.
This was further heightened by the fact that locals despised being employed in construction industry (Karim, Abdullah & Bakar, 1999, p. 114). It was against this reason that influx of foreign workers in Malaysia came at the right time when there was high demand for both skilled and unskilled workforce. Nonetheless, although the influx of foreign labor (both legal and illegal) was desired during that time, it has been associated with several negative economic, social and political implications.
To begin with, negative perceptions on construction jobs among the locals in Malaysia can be blamed for the enormous number of foreign workers in this industry. Evidently, Malaysian people prefer blue collar jobs over construction jobs which they refer to as ‘3D’ , that is dirty, dangerous and demeaning (Karim, Abdullah & Bakar, 1999, p. 112). These negative perceptions led to acute shortage of workers in this sector and hence foreign workers played significant role to fill this vacuum.
Correspondingly, wages in the construction industry were relatively low as compared to other sectors despite the fact construction jobs are highly risky (Kadir et al., 2005, P. 44). For this reason, local population shunned away from these jobs and as a result, foreign workers stepped in to occupy their place. Apparently, foreign workers opt for low wages instead of being unemployed in their own countries (Kadir et al., 2005, p. 44).
Furthermore, construction industry relies on unskilled labor and the fact that most locals are attaining higher education levels connotes that there are more opportunities for unskilled foreign workers (Karim, Abdullah & Bakar, 1999, p. 129). Finally, the process of importing foreign workers to Malaysia is effortless and most employers in the construction industry prefer to import than hire locals who are likely to demand higher salaries (Kadir et al., 2005, P. 45).
First and foremost, the recent debate in Malaysia has revolved around whether the influx of foreign workers should be blamed for the rising cases of unemployment among the locals. Those supporting the recent move by government of Malaysia to cut back on foreign workforce argued that foreigners are causing reduction in wage prices since employers are unwilling to pay more salary to locals whenever there is option for cheap labor (Kadir et al., 2005, p. 52). As a result, local workers opt to stay away from employment citing poor pay.
On the other hand, Bedi (2008, par. 10) elucidate that blaming foreign workers for rising rate of unemployment is a lame excuse that is likely to attract negative economic benefits since the unskilled foreign laborers in construction industry indeed take jobs which are despised by locals (Bedi, 2008, par. 11). As a matter of fact, if foreign laborers were to be eliminated entirely, the construction and other numerous industries would collapse due to acute labor shortage (Benson & Zhu, 2005, p. 149).
Secondly, foreign workers have been accused of causing cultural pollution. According to Benson and Zhu (2005, p. 149), locals in Malaysian construction industry are anxious that heavy presence of foreigners is likely to dilute their ancient cultural and social order.
However, Bedi (2008, par. 14) provides a different perspective whereby he accentuates that interaction between foreigners and locals promote cultural diversity. Similarly, foreign workers in Malaysia have been accused of causing various social problems. For instance, they have been blamed for increased social vices like theft, rape, murders and so on (Benson & Zhu, 2005, p. 148).
Moreover, several syndicates have been created to facilitate movement of illegal immigrants (Benson & Zhu, 2005, p. 148). However, whereas the influx of foreign workers is partly to blame for increase in aforementioned social vices, it does not necessarily imply that locals are innocent. As a matter of fact, the government of Malaysia should enforce strict measures to curb entry of illegal foreign workers, since the abolition of foreign workers in totality would be disastrous to the economy (Kadir et al., 2005, p. 49).
On the same note, the large number of foreign workers in Malaysia has negatively impacted on labor market and wage structure. Consequently, the fact that foreign workers enjoy public goods tax free can be linked to the higher rates of inflation (Karim, Abdullah & Bakar, 1999, p. 132).
However, Kadir et al (2005, p. 46) refutes this notion since economic principles indicate that cheap foreign labor has the capability of driving economies forward since the manpower needs of low end firms such as construction industry are met by this group of people. Moreover, by supplying cheap labor force, foreign workers enable Malaysia to look attractive to foreign multinationals and subsequent investment have far reaching economic benefits (Kadir et al., 2005, P. 49).
In a nutshell, the positive role of foreign workers in Malaysian economy cannot be overemphasized. Most importantly, unskilled workers contribute positively to the growth of Malaysian construction industry. Furthermore, tremendous influx of foreign workers in Malaysia especially in construction industry has been heightened by negative perceptions among the locals who view these jobs as dirty, dangerous and demeaning.
Moreover, low wages tend to discourage local people from taking construction jobs, but foreign workers are happy to work for low wages. On the same note, foreign workers are being blamed for denying locals employment opportunities and several other negative social and economic problems. However, while it is evident that majority of foreign workers may be negatively impacting the socio-economic and cultural environment, wiping them completely from the labor force might prove to be economically untenable.
Bedi, R. S. 2008. Weaning off foreign labour. [Online]. Available from http://thestar.com.my/news/story.asp?file=/2008/8/3/focus/20486162&sec=focus [accessed 2 September 2011].
Benson, J. & Zhu, Y. 2005. Unemployment in Asia. New York, NY: Routledge.
Kadir, M. R. A. et al. 2005. Factors affecting construction labour productivity for Malaysian residential projects. Structural Survey, 23 (1), 42 – 54
Karim, A.H. M., Abdullah, M. A. H. & Bakar, M. I. H. 1999. Foreign workers in Malaysia: issues and implications. Kuala Lumpur : Utusan Publications & Distributors.