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Friday, April 2, 2010

Locals losing out to cheap foreign labour

I REFER to your extensive reports on the New Economic Model (NEM) as unveiled by Prime Minister Datuk Seri Najib Tun Razak.

Malaysia is indeed suffering from mid-income crisis and unless we take firm and decisive action, we will be stuck there. We certainly need to get out of our comfort zones and move to the next level to become high income earners, especially for the bottom 40% who earn RM1,500 or below per month.

I believe that the singular largest impediment to our human capital development is the presence of cheap foreign labour, both legal and illegal.

Employers, given the option, will employ the cheapest labour to reduce costs. Any sensible person will do the same, it is a matter of survival and improving the bottom line.

But the cost to Malaysians, especially the bottom 40% is horrendous. They cannot expect higher wages as there are foreign workers who are prepared to take even less. There is also little or no incentive for manufacturers to upgrade their production process because it is much cheaper to use cheap labour rather than capital intensive machinery.

As a consequence of using cheap foreign labour, domestic workers are being replaced. As the lower liner wages are suppressed, the middle income group is also affected. There is a chain reaction to the whole wage structure affecting all strata of the Malaysian labour force.

To address this issue, the Government must tackle the presence of foreign labour in the country. As long as foreign workers can come here with or without legal documents, it would be difficult to increase the wages of Malaysians.



Sarawak-Sabah Foochow Association Malaysia,

Kuala Lumpur

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