THE NEW NORMAL FOR JOBS: A BRIEF COMMENT

By Prof. Dr. Mohamed Aslam Haneef, Department of Economics, IIUM.

This 1st May, in conjunction with Labour Day, Institut Darul Ehsan organised the inaugural Parliamentary Roundtable on issues related to the labour market. Entitled ‘New Normal for Jobs’ the roundtable was convened by MP for Port Dickson Dato’ Seri Anwar Ibrahim, moderated by MP for Lembah Pantai Fahmi Fadzil and had three panellists- Economists Hafiz Noor Shams and Dr Nungsari Ahmad Radhi as well as Executive Director of REFSA Tan E Hun.
Hafiz started by giving some macro data regarding the GDP outlook for Malaysia. A contraction in 2020 anywhere between -1.7% to -2.5% is expected. However, Malaysian policy makers should not expect a V-Shaped recovery and hence, must make sure that the policy measures taken for recovery are adequate. There could be up to 1.5 million job losses due to this Covid-19 pandemic and it will be the youth (age 20-24) and low-skilled workers who will be hit hardest. This is worrying since approximately 70% of Malaysian workers have qualifications lower than Diploma. Even for those who still are employed, they will not see much growth in wages. Hence, as we move to a post Covid-19 era, proper and adequate measures have to be taken to steer the country forward.

E Hun pointed to the asymmetric impact on workers: white collar workers were generally able to make do; blue collar workers would generally need to deal with a cut in income; women and GIG workers would be hit the hardest while informal workers were a generally ‘unknown’. Even the M40 category would be affected. E Hun then presented REFSAs ‘Build Back Better’ policy response. In order to move to higher value added work, investment in training and automation will be needed and will require government leadership. In addition, Malaysia should focus on building a more resilient ‘national’ economy to enhance national security and well-being, for example in food, medicines and medical equipment. The legal status of workers in the GIG economy and the informal sector also need to be addressed.

Nungsari reiterated an important fact that many of the issues in the labour market (and actually in the Malaysian economy as a whole) have actually been discussed for at least 2 decades, if not longer. The over-reliance on low skill, low wage labour is a clear structural weakness in Malaysia. For this group, talking about social safety nets was more relevant than economic stimulus packages. This leads to the other major issue- the divide between the ‘haves and the have nots’. He also proposes that the old over-reliance on plantations, oil and gas and other resource based industries will have to change. For example, rather than continue to focus on ‘plantation agriculture’, the post covid-19 era may need to give more emphasis to ‘food agriculture’, albeit using modern methods and technology.

Dato’ Seri Anwar, while welcoming the importance of growth and macro data figures, pointed out that at the end of the day, it is the welfare and well-being of the people that mattered. The vast divide between the rich and poor must be always in the mind of policy makers. His called for an adequate Parliament sitting to debate and discuss the policy measures that have been announced by the current government. This is to allow all opinions and views to be brought to the table and to ensure that all segments of society are taken into consideration in an equitable way. The recent example of the ‘u-turn’ to allow additional charges by banks on the 6 month moratorium was a case in point. It seems as if this u-turn decision was good for the banks, but certainly not for the benefit of the clients. Only by having greater debates and discussion involving all stakeholders, can we actually come up to a fair decision for all.

As a whole, the session was a good opener. In conjunction with Labour Day, it is only befitting that the topic chosen focused on jobs. However, many more issues related to the welfare of workers and the rakyat in general need to be discussed. The known fact is that Malaysia faces a serious structural challenge in our labour market. We know we have to move to better paying jobs. Too many people are not paid a decent wage. While ethnic based development policies may have been relevant in the 1970s and 1980s, it has not adequately addressed the challenges of this ‘haves and have nots’ structural challenge. Covid-19 will amplify this divide. It will hit the lower wage workers more severely, who ironically will come from the Bumiputera community.
For at least three decades, while policy documents have talked about moving to a knowledge economy and a higher value add economy, the types of jobs being demanded by employers and industries are still predominantly low skill and low medium skill. More students are being asked to go into universities, but the job market prefers to hire those without higher education. There is a serious mismatch now being called ‘under-employment’. To make things worse, we have a huge reliance on low-skill foreign labour. Estimates range from the official 2.0 million figure to the 6 million+ figure that includes illegal and undocumented workers- which if true- totals about 40% of our labour force. It will be difficult to see how we can move forward to a new higher value add economy without resolving this foreign labour issue in Malaysia.

All in all, the roundtable received good response from attendees. The 287 participants (via ZOOM WEBINAR and 86,727 views from Facebook live platform) who joined felt that this initiative was a good effort to give information and to hear views from general public. Much more discussion is needed and many more roundtables should be organised.