Title:ShouldMalaysiaEncouragetheEmploymentofForeignWorker

Author:ThongHuiYee&NurulHidayahbintiKhairuddin

Background Definition of Ramesh

Foreign
Worker

Kumar
Moona
Haji
Mohamed, Charles
Ramendran
SPR,
PeterYacob,2012

A foreign worker is a person who

employed in a country on a temporary
basis to which the person is not a citizen.
Foreign workers are recruited by the
company, recruitment agency or hired
whilst they were job seeking in the
country to supplement the workforce of
the country for a limited term or to
provide skills on a contractual basis that
the country seeks. Those workers are
including skill and unskilled, legal and
illegalworkers.

Zehadual
Karim, A group of foreign nationals who were
AHM, Mohd Asri legally to work in another country where
Abdullah, Mohd Isa theyhavebeenofficiallyrecruited.
HajiBakar,1999
Miller,1991

Person come from a welter of nationality

group, living and working with diverse
legalstatusinaparticularcountry

Statistic

Ministry of Home 2015

Affairs
About 213 thousand foreign worker legal
foreignworker,
39.2%fromIndonesia
23.5%fromNepal
13.2%fromBangladesh

Example

TheStarOnline

18Feb2015
Malaysia and Bangladesh have finally
signed a memorandum of understanding
(MoU) to receive 1.5 million workers in
stages over the next three years under the
governmenttogovernment (G2G) G2G
PlusSystem.

Problem
Statement

Identify advantage and disadvantage of

foreign worker with the reference of
constructing,
manufacturing
and

agriculturesector.
Thesis

Paragraph1

Mainidea

ReasonSupportEmploymentofForeignWorker

Mainpoint1

SolventforLabourShortage

Supporting

Statistic

1.8 million registered foreign workers in

Malaysia, 38.2% were employed in the
manufacturing sector, 16% in the
construction and 14.2% in the plantation
sectors.
Rapid industrialization, urbanization,
strong economic growth, and a relatively
small population base created a situation
of relatively high employment and tight
labor markets. Movement of people to
urban areas led to acute laborshortagesin
ruralareasandtheplantationsectors.

Arguement

Ramesh
Kumar
Moona
Haji
Mohamed, Charles
Ramendran
SPR,
PeterYacob,2012

This shortage was further escalated by

combination of reasons and among them
is attitude of local workers, revision of
government
education
policy,
improvement in living standard and
ambitionstomoveforward.

Hamzah
AbdulRamanh,Chen
Wang, Lincoln C.
Wood,2012

ConstructingSector
Experience labour shortage since 1980s.
However supply of labour failed to
increase adequately to match the demand.
Henceforeignworkerfillthegap.

Ministry of Human Industry sector is known for paying low

Resources
of wages, offering difficult working
Malaysia
conditions, and having limited upward
careerpotential.
Thus, young Malaysians with low skills
and work experience are not attracted to
thesector

Hamzah
AbdulRahman,Chen
Wang, Lincoln C.
Wood,2012

Chose to employed foreign worker in

labour shortage period, rather than
increase wages and improve working
condition for localworker.Thiswillcause
increase overall construction cost. Local
worker being substituted by foreign
worker.

Suresh Narayanan, Immigrants complemented local workers

LaiYewWah,2014
in the initial phasewhenalabourshortage
emerged at prevailing wage levels but
displaced them in later periods because
employers favoured them due to
significantnonwagecostsavings.

MainPoint2 SustainEconomicgrowth
Situation

Ramesh
Kumar
Moona
Haji
Mohamed, Charles
Ramendran
SPR,
PeterYacob,2012

From 1990, Malaysian economy grew

rapidly and many jobs were created for
locally in all the sectors especially
manufacturing,
agricultural
and
construction sectors. Entering the early
90s, Malaysia have experience a severe
shortage of local workersespeciallyinthe
manufacturingindustriesandconstruction.
The local worker shortage later expanded
to the construction sector and domestic
services in the early 2000. Now, the
shortage of worker of various sectors of
industry is currently entering into the
criticalphenomena

Statistic

Ministry of Home Employment of foreign worker increase

Affairs
comparedbetween2000to2015
2000:807,096
2015:2,135,035
Abdul Rahim Abdul May2011
Hamid,BachanSingh 1.9 million foreign workers according
, Aminah Md Yusof, sectors
Nur Ashikin M.
a. Manufacturing(39%)
Abdullah,2011
b. Construction(19%)
c. Plantation(14%),
d. Housemaids(12%),

e. Services(10%),
f. Agriculture(6%).
Supportive

Hamzah
AbdulRahman,Chen
Wang, Lincoln C.
Wood,2012

Foreign worker with lower wages

compare to local worker will help
employer to increase competitiveness
withloweroverallconstructioncost.

Hussin
Abdullah,
Muhammad Azam,
Muhammad
Zakir
Abdullah,2016
http://www.mcser.org
/journal/index.php/mj
ss/article/viewFile/86
70/8328

Most of the foreign worker are unskilled

worker,and the major economic growthof
malaysia is contributed from Agriculture,
Forestry and Fishing and Construction
sectors. All this sector require huge
manpower(unskilledworker)

Ministry of Finance, Major GDP in Malaysia is Service,

Malaysia
Manufacturing, Mining, Agriculture and
Construction
Ministry of Human Increase Malaysias competitiveness and
Resources
of economicsuccess.
Malaysia
Especially the caseamongexportoriented
companies in the manufacturing sector.
Foreign labor leads to increases in
productivity levels of medium and large
firms in some economic sectors such as
manufacturingandconstruction
Argument

Hamzah
AbdulRahman,Chen
Wang, Lincoln C.
Wood,2012

Overdependence on foreign worker will

result in increase the number of foreign
workers result in high unemployment rate
of local workers. Eventually, it ends up
with locals lower purchasing power
giving negative effectstoMalaysiasGDP
(Gross Domestic Productivity) and at the
sametimehindersthegrowthofeconomy.

Chew,K2005

Highly dependance of foreign worker

from a single country, problem will arise
if there are misunderstanding or
diplomatic related problem with source
countrysuchasindonesia.

Paragraph2 MainIdea

ReasonRejectionEmploymentofForeignWorker

MainPoint1 Increaseunemploymentoflocalworker
Supportive

Arguement

Ramesh
Kumar
Moona
Haji
Mohamed, Charles
Ramendran
SPR,
PeterYacob,2012

There is increase of unemployment with

the increase of number of foreign worker.
Local workers are threatened by foreign
workers
a. lowrequirementofpayment,
b. qualityofwork,
c. otherfringebenefits.
Foreign workers who can bear with lower
incomes and unfavorable terms and
conditions of employment are more
sought by local employers, since main
purpose of foreign workers is to gain
sufficientincomeinashortperiodoftime.
In this point of view, Malaysian local
workers are not being protected against
cheapforeignlabor.

Hamzah
AbdulRahman,Chen
Wang, Lincoln C.
Wood,2012

Increase competitive of job opportunity

between foreign and local worker in
constructionsector.
Willingness of foreign worker to accept
lower wages and poor working condition
furtherdepressionoflocalworkerwages.

Ministry of Human Foreigners also generate jobs for

Resources
of Malaysiansby
Malaysia
a. Reducing the costs of production,
making Malaysian firms cheaper
and more competitiveintheglobal
market,
b. Allowing them to expand and
consequently increasing their
demandforMalaysianworkers.
Thus, results show that the ultimate
outcomeforMalaysiansisjobcreation.

Results show that one percent increase in

immigration
increases
fulltime
employment of Malaysians by onetenth
of a percent andparttimeemploymentfor
Malaysiansbyonethirdofapercent.

Immigration has a only impact to certain

group of Malaysia according to their
educationbackground.

Lowerlevel=Negativeeffect
Middlelevel=Positiveeffect
Higherlevel=Nosignificanteffect

Most of the foreign worker istofulfillthe

job with unskilled or low skilled in
agriculture,
constructing
and
manufacturing sector to assist local
worker.Onlysmallpartoftheminvolvein
managerialpostcomparedtolocalworker.

Malaysians rapidly increased their

education levels and rejected jobs in
agriculture and construction in favor of
formal
and
betterremunerated
employment in the public and private
sectors.
Paragraph3

MainPoint

Impedetherealwagerategrowth

The presence of many foreign workers adversely affected

the longterm competitiveness of many Malaysias
manufacturing,althoughshortterm

Supporting
details

Camarota,
2002 The unimpeded supply of immigrant
Borjas, 2005 Briggs, labour has thwarted legitimate wage
Jr.,1996
increase in the sector and denied natives
betterstandardsofliving.

Suresh
2014

Thesis

Narayanan, The large presence of immigrant workers

had dampening effect on wages of
workers.

Employers of immigrants can avoid

paying immigrants wages equivalent to
thoseofnativesdoingsimilarjobs.

Firms with a big workforce are likely to

paylowerthanaveragewages.
The

presence

of

foreign

workers

depressed wages and impeded important

structural changes in the economy. This
factor has become one of the reason why
the natives feel threatenedbythepresence
of foreign worker in Malaysia. Moreover,
this is only brings profit to the firms of
sector who hire foreign workers and they
wont feelburdenedtohirenativesworker
withhighwages.
Paragraph4

MainPoint

The unimpeded amount of foreign workers is seen as a security

threat to Malaysian from the view of rising crime rate and
contagiousdiseases.

Supportings
details

Pillai (1995) Kassim The unrestricted policy regarding to

(1998) Chin (2002) foreign workers has affected social
Liow(2004)
stability.
A recurrent theme in the mass media is
that unskilled foreign workers cause the
spread of diseases, conflicts and crimes,
thereby encroaching on public safety and
security.
The perceived diseases and crime are
hazards thatresultfromtheexploitationof
foreign workers by employers who donot
accord fair treatment. Foreign workers in
turn alsolendthemselveswillingtoaccept
limitations of their rights and exclusion
from social protection. Some believe that
the indirect effect ofthisisthatemployers
prefer foreign workers whilst local
unskilledworkersgetleftbehind.

Bernama(2016)

Data gathered by the Foreign Workers

Medical Examination Monitoring Agency
(Fomema) reveal that 10 of 100 foreign
workers who undergo health screenings
suffer from dangerous diseases such as
tuberculosis,hepatitisBandAids.
This is worrisome for the
Malaysian because those diseases
canbeeasilyspreadaway.

Thesis

The increasing rate of crime done by

foreign workers will affect our country

image as a peace and lovely country.

Tourists who came to Malaysia will feel
unsafe and uncomfortable surrounded by
foreign workers. Besides,theincreaserate
ofcrimealsoaffectthelossofretailsales.
Paragraph5

MainPoint

Pronetotheinfluxofillegalforeignworkers

Conclusion

Malaysia may encourage the uptake of foreign workers as it is a real

demand for developing industries. However, it should be in minimal
amountsandmustbesupervisedtodeteranybadthingsfromhappening.
Malaysian also need to get rid of their stereotypic view of foreign worker.
Not all foreign workers have negative behaviours. Malaysian should
respecttheminawaythattheyshouldbe.

Suggestion

1) Governments must have a sense of commitment by

showingresponsibilityincarryingouttheirduties.
The government should formulate a longterm strategy to
manage and control the uptake of foreign workers into
Malaysia.
they must make an official agreement with the host
countries to have the criminal record of each employer
before they enter Malaysia. The employers also should be
informed first concerning Malaysias laws, cultural, values
and social aspects to givethemaclearawarenessaboutthe
dosanddontsinMalaysia.

2) Firms of industries must obey the rules of government for the

hiringofforeignworkers.
To avoid illegal hiring of foreign workers give rise tolots
ofotherproblem.
Supervise their workers concerning their health, shelter
and behaviour. This is to avoid the spread of contagious
diseases and the increase of crime rate of foreign workers
inMalaysia.

3) The uptake of foreign workers into Malaysia should be

minimize.
Government should set the objective of the Malaysian
immigration system to deliver the right skill mixinashort
period of time with minimum transactions costs for all
partiesinvolved.
The recruitment of foreign workers should be on quality

ratherthanquantity.

Reference

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Hamzah AbdulRahman, Chen Wang, Lincoln C. Wood, Shu Fung Low. 2012. "Habitat
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Hussin Abdullah, Muhammad Azam, Muhammad Zakir Abdullah. 2016. "Mediterranean

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in
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264273.
http://www.mcser.org/journal/index.php/mjss/article/viewFile/8670/8328.

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