Free labour market remains unattainable
SK Devi -October 18, 2022 10:00 AM
PETALING JAYA: Freeing up the labour market across Asean will not only solve current problems but also bring benefits to workers and employers, according to two economists.
Restrictions on movement on workers would be lifted, employers could save billions in agency fees and workers would be protected, Geoffrey Williams of the Malaysia University of Science and Technology, and Carmelo Ferlito of the Center for Market Education told FMT Business.
Last week, human resources minister M Saravanan announced that the number of migrant workers in Malaysia was expected to rise to more than two million.
Saravanan had told the Dewan Rakyat that 238,943 foreign workers would enter the country with approved visas soon and about 640,000 applications were currently being processed.
The minister has come under fire over various issues, including lengthy waits for visa approval, causing delays that could derail business recovery and sustainability of operations.
Coupled with that is the problem of Malaysians being lured to Cambodia by job scam syndicates to work under horrific conditions, making the question of easy access to jobs across the region more pertinent than ever.
Williams said the liberalisation of the labour market would eliminate the need for agency fees.
“It adds up to RM15,000 to RM20,000 per worker. With 2.2 million migrant workers in Malaysia, that adds up to RM33 billion to RM44 billion. Just removing the agency fees will save billions in non-productive transaction costs for companies,” he said.
He said migrant workers, including those who were highly paid, did not have effective protection from current labour laws and this could lead to abuse.
“Once in his destination country, a worker is stuck with just one employer. This restricts his movement in terms of choice of employment,” he said.
“Freeing up the labour market can reduce incidence of human trafficking given that people will now be free to move without restrictions imposed by abusive middlemen.”
Williams added that a good system should come with long-term work permits that were attached to the worker rather than the employer.
Ferlito said the liberalisation of the labour market would enable citizens of Asean to move freely from one country to another within the bloc to seek employment without having to obtain a work visa.
“This will enable workers in Asean to grab job opportunities in any country in the region without the need to seek special permission,” he said.
This would also eliminate the risk of workers being coerced into handing over their passports to their employers, or worse, being forced into slavery.
Ferlito said a liberalised labour market meant that Malaysians would have wider access to job opportunities while businesses would have a bigger pool of workers to choose from.
“A more vibrant labour market such as this would spur competition and innovation,” he said.
Despite the vast potential, the concept of a liberalised Asean labour market may not always be received with open arms.
Williams attributed the resistance to host countries’ fear of losing control over immigration as well as cultural challenges.
“For instance, in Malaysia foreign workers are not always welcomed. They face discrimination and ill-treatment,” he said.
“Given the billions of dollars in agency fees in all Asean countries, there is a high level of corruption, and this is an obstacle to the liberalisation of the labour market.
“Agents do not want to lose this access to funds. This is a problem in every country.”
Ferlito said another obstacle was the fear of competition. “Some would argue that Malaysians will be replaced by foreigners (in the workforce),” he added.
