1.0 Introduction Thispaper discusses impact of foreign workers in Malaysia, factor that affect theemployment of foreign workers and finally the solution to overcome the impactby foreign workers. Foreign workers known as an individual who is temporaryemployed in a country which that individual is not citizen. According to MillerMark J. (1991), foreign worker defined as a person who comes from tumble ofnationality groups, working with different legal status in a country. Foreignworkforce is known as foreign nationals where they are recruited from differentcountry and legal to work in a country described by A.
H.M. Zehadul Karim et al.(1999). Manyparties in various industries like construction and manufacturing industryconcern about the increasing number of foreign workers in Malaysia recently.
Nowadays,because of the local workers not interest in construction and manufacturingsector. The Malaysian construction and manufacturing industry have beenencountering deficiency in workforce. Hence contractors will choose to employforeign workers so that to fill up the vacancy in construction andmanufacturing sector. This will contributes of the large increment of amount ofthe foreign workers. Thenumber of foreign workers in the fourth quarter of 2007 increased to 10.99million as compared to 10.73 million in third quarter of 2006 according toLabour Force Survey Report.
There were 1.84 million registered foreign workersin Malaysia, of which 33.3 percent were employed in manufacturing and 15.1percent in construction. (Bernama, 2006).
This is because Malaysia is stillrely on foreign worker especially from ASEAN region. Foreignworker in construction industry Malaysia was a receiverof foreign national in the nineteenth century especially from China, India and Indonesia who came to workin construction, plantations and mines sector (Lee and Sivananthiran, 1996;Kaur, 2010; Dannecker, 2005). This shows that strong recruitment of foreignworkers in construction sector is not a new phenomenon in Malaysia. There areapproximate 22 million are ethnically diverse, 57% are Malays includingbumiputera, 24% of Chinese, 7% of Indians and the rest known as other raceslike Indonesian, Filipinos, Bangladeshis (Andaya, L.Y. and Andaya, B.
W. 2001). TheGovernment of Malaysia has objectives which are providing the job vacancy andimproving the income of the local population. This is to show that governmentplays the important roles in the construction sector. Nowadays, theconstruction sector has been experiencing a shortage of workforce due to localworkers are unable to fulfil the demand of the construction market.
Constructionindustry is the industry that need huge number of workers described by Ahmad, K(2009). If the economic development especially construction sector in theneighbouring countries like Indonesia continues to lag behind Malaysia, theinflow of foreign workers will continue to happen as long as there is demandfor foreign worker in Malaysia. Foreignworker in manufacturing industry Theconcentration on manufacturing is suitable because the other sectors likeagriculture and construction where foreign workers focus, are widely perceivedto offer low income jobs with tough conditions of work that local workers.Manufacturing paid relatively higher pay and comfortable working environment. Therefore, the employment of foreignworkers increase and this will give the negative impact to the local workers.
This also leads to unemployment rate in Malaysia increases. In 1990,only 8.8% of foreign workers were in manufacturing, where 37.7% are inagriculture, 34.4% in construction and 19.1% in non-domestic services whereasin 2009, 32% are in manufacturing far exceeding their presence in sectors traditionallyavoided by natives such as 26.
1% in agriculture , 15.6% in construction andnon-domestic services is 10.6%. (Devadasonand Chan, 2014) Thetransformation of Malaysian economy from an exporter of main commoditiesconsisting of tin and rubber to a major supplier of synthetic goods, mainlyelectric and electronics products are acknowledged within the development literature(World Bank, 1993). The new emphasis within the business improvement policiesnaturally ended in restructuring within production. In 1970, foods and drinks,wooden merchandise, and chemical and petroleum products accounted for 64% ofsynthetic exports, at the same time as the electronics and electrical goods(EE) supplied a mere 3%.
In 1989, this had changed dramatically with the EE subsectoralone accounting for 52% of the manufactured exports (Anuwar, 1992: 28). 2.0 Problem The employment offoreign workers has caused many problem in Malaysian construction industry. Firstly,local employers will prefer foreign workers than local worker due to employforeign workers are much cheaper than local workers. Besides that, Malaysianeconomy grew rapidly. Moreover, foreign workers are willing to work overtimeand finally working environment in any sectors.Factorthat influence the employment of foreign workers in construction and manufacturingsector The first factor that influence the employmentof foreign workers is local employer prefers foreign workers which is cheaper. Malaysiapresently has approximately 1.
8 million foreign employees and on the same time,local employers are submitting a huge number applications about hiring foreignworkers to the home Affairs Ministry stated by Former Minister of Human Resources,Datuk Seri Dr Fong Chan Onn (Bernama, 2006). Foreign workers are willing toaccept lower wages and this will lose local workers’ interest in constructionand manufacturing field. This mean that the wages of local workers have to sameas foreign workers. Malaysia will remain to face a labor shortage if it does nolonger deal with its foreign workers laws and raise the minimum wages paid toIndonesian workers (The New Straits Times Press (Malaysia) Berhad, 2010). Thisis why the employers hired these foreign workers so that able to reduce theemployers’ expenditures if they pay lower wages to foreign workers. Secondly,Malaysian economy grew rapidly.
According to Trading Economics, The Malaysianeconomy advanced 6.2% year-on-year in the September quarter of 2017, comparedto a 5.8% increment within the preceding three months and beating market consensusof a 5.4% growth. It was the strongest growth since the June quarter 2014,boosted by robust private consumption and faster rises in government spending,investment and exports.
On the production side, the manufacturing sectorincrease 7.0%, after growing 6.0% in the June quarter. Meanwhile, the constructionsector grew by 6.1% (after a 8.3% rise in Q2). The agriculture sector grew by4.1%, compared to a 5.
9% increase in the June quarter. Increase in GDP inMalaysia will create more job vacancies to local and foreign workers. Next, foreign workers are willing to work overtime. The standard workingweek should be 44 hours and working over 44 hours regarded as overtime (CIDB Singapore1994c). Local worker request extra wages if they asked to work overtime butforeign workers will not request extra wages.
Other than that, working environment also a factor that need toconsidered. The construction sector considered as dangerous, dirty anddifficult working environment .Local workers not willing to work in thatmentioned working environment. Foreign workers do not care about thisenvironment and dare to take risk on construction area.
This is the reason thatemployer preferred foreign workers than local workers.Impacton employment of foreign workers Thefirst impact that induced is the safety of the local society is threaten byforeign workers. The huge number of foreign workers is looked as a security threatas it is associated with rising crime rate and contagious diseases (Kanapathy,2008). Besides that, there are other social problems like drugs addiction,prostitution, burglary and many more. The foreign workers have not only flooded the local employmentmarket, but they are also filling up our prison and detention centers all overthe nation said by the ministry of Internal Security. Therefore it is normalthat if Malaysians feel afflictive with their presence (Bernama, 2007) and thiswill disturb social balance in Malaysia. Besides that, local employers will be more rely on foreign workers,theescalating of the number of foreign workers will affect high unemployment rateof local workers because foreign workers have substituted for local workers inconstruction and manufacturing sector.
Employers feel satisfied having foreignworkers working in their company and local workers feel stress because theyhave to compete with foreign workers if they want to survive in either constructionor manufacturing sector. Sooner or later, it ends up with locals’ lowerpurchasing power, resulting leaves some negative impacts to Malaysia’s economy.Chew (2005) worried that our country is highly dependent on a single countrywhich is Indonesia, it is the main source of labor for around 65% (Kanapathy, 2008;Kaur, 2010) or 62% (Department of Statistics Malaysia, 2010) from overallforeign workers in Malaysia. Another issue shows that Malaysia is highly dependon foreign worker which is like around 90% of the foreign workers inagriculture sector are of Indonesian origin in Sabah (Kassim, 2005). Theproblem may occur if diplomatic relations between Malaysia and Indonesia becomestrained and Indonesia ordered on their nationals back (Kassim, 2005) andadversely affect the construction industry in Malaysia. Thirdly,slow pace in technology advancement will happen in Malaysia. One of a challengesthat the Malaysian construction sector faces is productivity caused by theforeign workers. Most of the foreign workers employed were unskilled, loweducation level which will decrease the quality and productivity of work inconstruction sector.
(Han et al. 2008). Due to lack of experience and knowledgeof the foreign workers, this will produce low standard and quality ofproductivity in construction sector.
In addition, some of them cannot executethe work perfectly based on the instruction given by their employers and alsodid not have enough practical training in Malaysia or their origin country. Moreover, local community difficult to accept someone from differentculture or ethical motive especially in construction or manufacturing sector.For instance, if local workers are working together, it will easier for them tocooperate and understand to each other but if an employer wants to employforeign worker from another country then the local workers have to learn theinternational language which is English (Chitra Reddy, 2016). The main problemthat foreign workers are facing now is language according to Toh. R. (1993).
Company must set up a standard language like English or Malay in work so thatthe information are delivered to the workers clearly. The manager in company mustpay attention to their employees like giving them the basic language classespecially for low-skilled foreign workers. . 3.
0SolutionSolutionto minimizing the negative impact Ifthe problems exist, there are many ways to solve it if the government and localcommunity cooperate to confront it. Although employing foreign workers haveleave many negative impacts to Malaysia but all parties have to take the sternaction so that to solve the entire problems. There are some solutions toovercome the problems like Malaysian government impose levies, change migrationpolicies, campaign influence local workers to join construction andmanufacturing industries and introduce vocational school system.
Thefirst solution is vocational school education system needed to be review inMalaysia. The basic skill such as wiring and welding should be learned by everysecondary students so that they will become more skillful in manufacturingfield in the future. Practical exam should be implemented in vocational course besideswritten exam.
This able to produced more local workers in construction andmanufacturing sector if the Ministry of Education take the action quickly. Employercan considered local workers who graduated from professional vocational schoolcompared to low academic qualification of foreign workers. As a result, thequality of work will be increased and Malaysia less dependent on foreignworkers from neighbouring countries. Thenext solution is Malaysian government impose levies and change migrationpolicies.
During the recruitment of foreign workers, regulation must includestrict rules so that the number of foreign workers can be reduced. Thesestrategies can create more job vacancies to local workers to join theconstruction sector because foreign workers have to go through many rules andregulations that set by government, they will found that it is difficult andmany rules to obey when they want to work in Malaysia and finally they may giveup and enter another countries for job opportunities. For example, one of therules is only foreign workers are permitted to work in manufacturing,construction, plantation, agriculture and services sector according toImmigrant Department of Malaysia. Other than that, strengthen the enforcement of existing Biometricdatabase system. The objective of this system is to control the number offoreign workers in Malaysia. They must have their fingerprint taken and savedin Immigration Database. This can prevent that the illegal foreign workersre-enter Malaysia if they asked to back to their origin country or they leaveMalaysia if they commit crime. Government can control the number of foreignworkers based on the industry demand.
4.0 Conclusion In a nutshell, there are several factors likethat attract foreign workers to construction and manufacturing sector and alsoleave some impacts to Malaysia. The study shows that employers employ foreignworkers because of employment of foreign workers is cheaper than local workers,Malaysian economy grows rapidly and environment in construction sector.
Reliance too much of foreign workers may leave some impact like safety of thelocal society is threaten by foreign workers, local employers will be more relyon foreign workers, slow pace in technology advancement and finally localcommunity difficult to accept someone from different culture or ethical motive.In order to overcome these impacts, Malaysian government must play someimportant roles like government impose levies and change migration policies,strengthen the enforcement of existing Biometric database system and vocationalschool education system needed to be review. Although employment of foreignworkers may leave some problems, we as local community have to play importantroles so that the unemployment rate of local workers will be decreases in anysectors. All parties including us must take action now so that the negativeimpacts induced by foreign workers can be minimized at a lower level. In thefuture research situation, we wish that study of impact of foreign workers tobe improved in order to minimise the number of foreign workers and Malaysiansare able to understand the important of local community in any sector inMalaysia.ReferencesSuresh Narayanan, Lai Yew-Wah (2014). Migration andDevelopment in Malaysia: The Impact of Immigrant Labour on the ManufacturingSector, 1986-2010. Universiti Sains Malaysia, Pulau Pinang.
Malaysia GDP Annual Growth Rate 2000-2017. RetrivedDec 5, 2017 from https://tradingeconomics.com/malaysia/gdp-growth-annual Mohd Arif Marhani, Hamimah Adnan, Har EinurBaharuddin, Mohd Reza Esa, Ahmad Arzlee Hassan (2012). Dependency of ForeignWorkers in Malaysian Construction Industry. Built Environment Journal Vol. 9, No. 1, 39-50.
Universiti TeknologiMARA, Selangor.Hamzah Abdul-Rahmana, Chen Wang, Lincoln C. Woods, ShuFung Low (2012), Negative impact induced by foreign workers: Evidence inMalaysian construction sector. Habitat International 36 433-443. University of Malaya, Kuala Lumpurand Curtin University, Australia.
Ramesh Kumar Moona Haji Mohamed, Charles RamendranSPR, Peter Yacob (2012). The Impact of Employment of Foreign Workers: Local Employabilityand Trade Union Roles in Malaysia. International Journal of Academic Researchin Business and Social Sciences October 2012, Vol. 2, No. 10.
Universiti SainsMalaysia and University Tunku Abdul Rahman.Chitra Reddy (2016), Top 13 Advantages & Disadvantagesof Hiring Foreign Workers retrieved 31 October 2017 fromhttps://content.wisestep.com/top-advantages-disadvantages-hiring-foreign-workers/