Zahid and UMNO will pay for 1.5 million Bangladeshi workers in GE 14

Malaysians are dissapointed that the Government went ahead to seal the deal in Dhaka yesterday (18th February 2016) to bring in 1.5 million Bangladeshi workers over the next three years.

This deal will allow the Bangladeshi workers employment in the construction, service, manufacturing, and agriculture sectors, apart from the existing plantation sector.

We oppose to such scheme not from a xenophobic perspective. Malaysia should embrace professionals and skilled workers of foreign origins to contribute to value-adding activities in the economy.

But adding another 1.5 million foreign unskilled labour into the equation is bad for Malaysia. Here are some of the reasons: –

First, there is no incentive for automation, mechanisation, innovation and technological upgrade.

As there is abundant supply of unskilled foreign labour, even mechanised dishwashers– the most basic automation in any high-income nations – are hardly seen in Malaysia.

During the labour crunch in the early 1990s, most urban petrol stations were forced to adopt “self-service” and car washing machines were brought in. Twenty years later, a foreign labourer will offer to clean one’s windscreen while one pumps patrol; car wash machines have disappeared and in its place one finds many manual car wash services.

Reducing the number of foreign unskilled labour is the cornerstone of building a nation that is founded upon skill, innovation and superb technology, not cheap labour.

Second, massive influx of unskilled foreign labour hurts the wages of Malaysians at all levels, not just for labour.

Wages for freshly graduated lawyers did not improve much over the past three decades, not to mention wages for other graduates and those without a degree. Since there is abundance of supply of labour, workers have no bargaining power to demand better pay and conditions in the “race to the bottom” for wages.

The only way to reverse this is to pay those at the lowest – such as garbage collectors – much better so that everyone else gets better pay. But the garbage trucks would have to change from having 5 persons to an automated operation with one person doing everything with the machine eventually. Imagine that a garbage collector is paid RM2,000 per month, freshly graduated lawyers would not be paid RM2,000 – RM2,500 a month like they are now, otherwise everyone would become garbage collectors.

Third, low wage economy hurts everyone. To save the Malaysian economy there must be enough decently paid jobs to go around among Malaysians.

Malaysia used to be highly export-oriented, domestic consumption didn’t matter much to the economy.

Since the Global Financial Crisis in 2008 when United States and Europe suffered massive job losses, reducing their capacity to consume our exports significantly, Malaysia has been increasingly dependent on domestic consumption.

A lot of domestic consumption over the past seven years since 2009 are fueled and funded by household debt, which stands at approximately 90 percent of GDP.

In the foreseeable future of a difficult global environment, Malaysia’s dependence on domestic consumption would only be greater. The Government’s macroeconomic policy priority should be to ensure that there are enough decently paid jobs to go around among Malaysians so that the economy doesn’t crash.

Fourth, massive influx of foreign labour hurts female participation in the labour force.

The most effective way to improve the income of ordinary Malaysian families is to make it possible and worthwhile for the female to work. Malaysia has the lowest female workforce participation rate in the region because there is no urgency to provide childcare and make other adjustments to bring the female into the workforce.

If Deputy Prime Minister Zahid Hamidi and the Government insist on bringing in the 1.5 million Bangladashi workers over the next three years, Malaysians must rise to make Zahid and UMNO pay for not listening to the voices of Malaysians and not acting in the interest of Malaysians in the next general election.

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