SITUATION OF YOUNG WORKERS IN MALAYSIA

By Sivam Doraisamy

 

Executive Summar

 

The purpose of the study is to survey the situation of young workers between the age group 15 to 34 in Malaysia. The survey is based on library search, random interview with production workers and information/views obtained from community organization working with plantation workers, factory workers and urban settlers.  Major concern of the study is to analyze the changing trend of

Changing positions of young workers in the changing labour markets in the past decade and prospect. Besides other issues concerning young workers such as working conditions and social problems were also presented to give an overall picture of the situation of young workers in Malaysia today. 

 

Youth population between the age group 15 to 34 in Malaysia is approximately 9.75 million and they are around 42.5% of the total population. Youths are also the largest labour force; about 60 to 55% for the past decade and these are the young workers of the nation. Percentage of young workers between 15-24 years old are lesser (23.3%, 2000) compared to young workers between 25-34 years old (31.6%, 2000). At least 54% of young workers are employed. Employed young women workers made up of 50% of the total employed male young workers. High proportion of young workers is in the manufacturing sector. Young workers also the largest number without employment as the statistics shows that about 83.6% were unemployed especially those between the age group 15-24, forms 65.6%. The total number of registered unemployed young workers with the Human Resource Ministry is declining over the decade. Unfortunately, the numbers of young workers aged between 15-24 registered with the Ministry have relatively increased and form an average of 37% compared to those age between 25-34 only about 13.5% over the past 10 years.  Most of these young workers were also without working experience, about 45%.

 

So, the population of youth between the age group 15 to 24 are lesser about 4.37 million (2000) and the number of young workers (labour force) among the same age group also lower, 23.3% but the number of them in the unemployed category are higher, 65.6% and the number of them registered with the Ministry also relatively higher, about 37%.

 

At least 65% of total registered young workers have education level above MCE or O level. Labour market indicator shows that the job vacancies reported to the Ministry is increasing especially in the manufacturing sector, about 54.6%. But then, another problem facing the young workers in the current economy crisis is retrenchment. Though the government statistics shows the number of retrenchment is declining but it is shocking that the highest percentage (55.15%, 2000) of those retrenched are from the manufacturing sector, knowing well that most young workers are in that sector.

 

Another trend in Malaysia, is the growing number of 'outside the labour force' youths. Based on government statistics, it shows most of them have secondary level education and tertiary education but why are they not part of the labour force especially when 55.5 % of them are involved in housework? Whether it is their choice or are they not equipped with right skills to obtain gainful employment need to be studied in future.

 

Looking into the working condition of the young workers in Malaysia, one could say that we are still backward in the sense that working conditions are depriving. Lowest 40% of household earning an average monthly income of RM840 and the medium 40% earn below RM2, 202 while the top 20% earns RM7, 006 a month. Only 20% of workforce are professionals, technical workers and managerial workers, the remaining 80% are production-related workers. No minimum wage law in the country. Unionization of labour force is very low (8%) and labour laws are lenient towards employers. Working hours are increased to more than 12 hours a day. Low income has forced young workers to engage in more than one job in order to survive the high cost of living especially with the privatization of public utilities.   Rest, leisure times and in worst situation, family is forgotten. Thus, it effects healthy family development and creates more social problems.

 

            Besides, the number of industrial accidents and deaths recorded in the country is quite high especially in the production-related sectors where young workers are employed high in number. This indicates lack of enforcement on the part of the government while the employers in their intense to maximize profit has neglected workers health and safety at work place. Number of Social Security programs designed for the workers also seems to be ineffective in curbing the industrial accidents as well as protecting the workers from retrenchment and other labour rights.

 

Reviewing the issue of housing conditions and the need to own affordable permanent house with enough space and facilities seems to be far a reach for those in the lower income group especially. Forced eviction adds further burden to the young workers population in the marginalised and neglected communities such as urban pioneers and plantation workers.

 

Social problems among young workers and youth in general are alarming. For instance, the largest proportion of young workers, especially the unemployed is infected with HIV/AIDS. So are the alarming figures of 400,000 young workers addicted to drug. Juvenile delinquency is also arising in number. All together it gives a picture that the situation of young workers in Malaysia are very critical and they are not the one to be blamed entirely since the overall picture of the social and economic situation in Malaysia shows an unequal development.

 

 

Currently, young workers seem to be in a situation where unemployment are higher among them with social problems and employed in unskilled/semiskilled job with low wages and depressing working conditions with the higher possibility of retrenchment. The increasing number of unemployed young workers, especially those who have no working experience and with those limited number of youths engaged in highly skilled jobs (around 7%) indicates that the government need to do a lot to improve the situation in order to achieve higher and healthy economic growth.  Laws that deprive young workers of their rights need to be reviewed. Minimum wage law must be legislated to guarantee a decent and fair wage and safety and health at work place must be given priority.  Housing, health care and education must be made affordable and reachable to all level of people. Presently there is no compulsory education policy and free education policy particularly for primary schools needs to be reviewed, even though literacy rate shows 93%.

 

 

Future labour market prospects shows that more skilled workers with more talents and innovations are needed. Without skills, unemployment rate among young workers would increase and so are other social problems. The government needs to provide skilled labour force that the market needed. Identifying problems or restrictions that young workers facing in attaining such skill education would help to improvise current planning that the government already has to produce quality skilled workers.  That might help the government move towards its vision of achieving high value-added, technology-intensive and capital intensive industrialization and besides minimizing labour inputs and maximize quality and skills. More Skill Training Centers with advance technology level and retraining programs must be formulated to reach all levels or class of young workers in Malaysia.

 

 

 

SITUATION OF YOUNG WORKERS IN MALAYSIA

 

 

1.1      Introduction

 

a)      Who is a young worker?

 

Malaysian's Employment Law defines a child as a person under 14 years of age and a young person as under 16.   International Labor Organisation, via Minimum Age Convention 1973 sets a number of minimum ages depending on the type of employment or work. The first principle is that the minimum age should not be less than the age for completing compulsory schooling and in no event less than age 15. The second principle is that a higher minimum age should be set for hazardous work. This age may not be less than 18.

 

According to the Standard United Nations definition, 'youth' comprises young people aged between 15 to 24 years inclusive. The Confederation of Free Trade Unions-Asian and Pacific Regional Organization (ICFTU-APRO) defines Young Workers as a person between the age 15 to 35. The Malaysian government defines youths, as those between the age group 15 to 40 years while the Malaysian trade Union Congress (MTUC) says youth are those between 15 to 34. Thus for the purpose of this research, the researcher adopt the MTUC definition. If a person working part-time or full-time or searching for a job and the person is between 15 and 34 years of age, then he or she is considered to be a young worker.

 

 

b) Objective of the Survey

 

The Year 2002 on Situation of Young Workers in Malaysia is a library research conducted within a month period. The Survey was conducted in cooperation with the Malaysian Trade Union Congress besides Human Resources Ministry, Occupational Health and Safety Department and Health Ministry through its statistical arm and the Department of Statistics Malaysia. The survey is done to collect data and analyze the following:

§         The general trends of changing positions of young workers in the changing labour market in the past decade and prospect.

§         Problems of young workers in the labor market such as unemployment, skill training and retraining and career building.

§         Problems of working conditions of young workers such as wage, working hours and Social Safety Net.

§         Social problems and young workers such as HIV/AIDS, drugs, housing, education and juvenile delinquency.

 

The survey was undertaken as part of Confederation of Free Trade Unions-Asian and Pacific Regional Organization (ICFTU-APRO) who is conducting a regional survey on Situation of Young Workers. Their objective of the survey is to draft a comprehensive policy statement on young workers to be submitted to the 18th. Regional Conference.

 

c)      Overview on Malaysia's Economy and Employment Policies

 

Malaysia is rich in natural resources and primary commodities, and the country's economic grow at a very satisfactory rate, 8 % per year from 1988  - 1997.   It has reduced unemployment and enjoying full employment rate since mid 1990 though the country has 1.7 % foreign workers  (Bank Negara 1998).

Malaysia is also a multi racial country with 2 main national groups- Bumiputeras and Non-Bumiputera. Bumiputeras refer to Malays and other indigenous people while Non-Bumiputera refer to other Malaysians of Chinese, Indian, Caucasian or other ethnic origins. It is important to mention in the study that in Malaysian situation race is the key factor that determines businesses, education policy, social policy, cultural policy, entry into educational institutions, discounts to purchasing houses and others as put it by Dr. Kua Kia Soong in his paper 'Racial Eyesores on the Malaysian Landscapes'.  Racism, which has its origin in the colonial divide and rule strategy, continues to be used as main pillar of our economic planning. The New Economic Policy (NEP: 1970 -1990) and the New Development Policy  (NDP: 1991-2000) as well as the Vision 2020 are all visions which is based on the foundation of the racial set-up in the country. The vision talks about a single, united and prosperous Malaysia by the year 2020.

 

In a paper presented by Takeshi Inagami (Employment and Training Department, ILO) on Labour Market Policies in Asian Countries which was published in 1998, summarized the labour market and labour policy trend in Malaysia as follows:

 

"One of National Economic Policy's objectives, in the context of plans for economic growth, was the elimination of poverty. Another strand was the Bumiputra policy of seeking a re-structuring of employment, which corresponded to the ethnic composition of the population. The NEP achieved clear results in terms of employment creation, but was less obviously successful in terms of "re-structuring society and employment". In the early 1980s the development of heavy and chemical industries under the ISI (ISI: import substitution industrialization) policy led to the incurring of huge foreign debts, and in order to repay these debts Malaysia came, from the mid-1980s onward, to adopt a fresh strategy, one of EOI  (EOI: export orientated industrialization) led by foreign investment.  Two distinct phases of the EOI policy can be identified: in the late 1980s the approach was one of low-cost labor-intensive EOI, whereas from the early 1990s onwards there was a shift of emphasis towards one of high value-added, technology-intensive and capital-intensive industrialization."

 

Takeshi also reported that in accordance to the EOI-foreign capital-led character, which is capital-intensive and technology-oriented, the government played a central role in creating appropriate human resource development policies. The function of the private sector has gradually come to receive more emphasis. These measures can be seen in general terms as a response to the qualitative component of the labour shortage.

 

The second Industrial Master Plan (1996-2005) is a blueprint to guide Malaysia's quantum leap into the 21st Century as an industrial nation and a global market player.  It calls for fundamental shift in emphasis, moving beyond manufacturing operations to include R & D and design capability development of integrated supporting industries, packaging, and distribution and marketing activities. Similarly, the government's policies via seventh five-year plan (1996-2000) also reported that economic constraint such as labor and skills shortage, productivity deficit would be addressed by turning Malaysian manufacturers into major players in the world market and by weaning them away from labor intensive industries. The plan also promotes investment in science and technology and emphasizes human resource development, especially greater efforts to address growing labor shortages in manufacturing, agriculture and services. It also reported that job creation would be replaced by minimization of labor inputs and maximization of quality and skills. 

 

Based on the Malaysian government's labour policy, it indicates that employment opportunities are growing in Malaysia but unemployment rate seems to be increasing too. Table 1.1 provides Malaysia's Key Economic Data between the year 1995 to 2000.  The National Income based on Real Gross Domestic Product growth shows a 4.4 % decline over the past 6 years.

 

According to the Ministry of Finance Malaysia, in it's Economic Report 1999/2000, Malaysia's Income per capita in 1998 is RM12, 134 (-1.5% growth) and increased 1.4% to reach RM12, 305 in 1999, It is estimated to grow 4.7%  (RM12, 883) in the year 2000. On the other hand, data on mean gross household income and income share by income group in 1999 shows  that the top 20% own 50% share of the national income while the bottom 40% only own 14% (Human Development Report, 1996).  According to a paper presented by Samsudin Hitam on 'Bumiputera Achievements in Economic Sector 1999,' the average income of the bottom 40% is only RM840 while the top 20% earn an average monthly income of RM7, 006.  Anyhow, according to seventh Malaysia plan, the absolute poverty rate has dropped from 20.7% in 1985 to 6.8% in 1997 but many academicians as well as community and labour groups are not happy with the official poverty line of 4.6 people each living in monthly income of RM425. 

 

 

Table 1.1- MALAYSIA: KEY ECONOMIC DATA 1995-2000

 

No.

Item

Year

1995

1996

1997

1998

1999*

2000**

1.

Population (million)

20.7

21.2

21.7

22.2

22.7

23.3

2.

Real GDP Growth (%)

9.4

8.6

7.7

-7.5

4.3

5

3

GNP Per  Capita (US $)

 

4,543

4,377

3,093

3,255

3,349

4.

Labour Force (thousand)***

8,257

8,641

9,038

8,881

9,010

9,194

5.

Labour Force Growth (%)

5.4

4.6

4.6

-1.7

1.5

2

6.

Employment (thousand)

8,024

8,417

8,805

8,563

8,741

8,920

7.

Employment Growth (%)

5.5

4.9

4.6

-2.5

1.7

2.1

8.

Unemployment Rate(%)***

2.8

2.6

2.6

3.2

3

3

*Estimates
**Forecast
***Economic Planning Unit estimates
Source : Economic Report 1999/2000

 

 

2.1    General Trend Of Changing Positions Of Young Workers In The Changing Labor Market, 1990-2000.

 

a)      Labour Force and Employment Trend, 1990 -2000

 

According to the seventh (1996-2000) and the eighth (2001-2005) Five year Malaysia Plan, youth population between the age group 15 -24 has increased 2.1 % a year from 3.58 million in 1990 to 3.97 million youths in 1995. A further increase of 1.6 % is recorded from 4.03 million in 1995 to 4.37 million in the year 2000 as stated in the below table. It is estimated that in year 2005, youth population in Malaysia between the age group 15-24 would grow to 4.98 million while those between the age 25-39 would increase to 5.83 million.  Youths between the age group 15-39 made up of 42.6% of overall Malaysia's population in 1995 and in 2000, they are reduced to 41.9%, still it is a very high proportion of the population.

 

Table 1.2- Malaysia: Distribution of Youths by Age Group, 1990-2000

(Million)

 

Age Group

1990

%

1995

%

2000

%

Less than 15

6.75

37.5

7.33

34.7

7.71

33.1

15 -  24

3.58

19.9

3.97

19.5

4.37

18.8

25-39

3.99

22.2

4.85

24.1

5.4

23.3

Above 39

3.66

20.4

4.54

21.7

5.79

24.8

Total

17.98

100.0

20.69

100.0

23.27

100.0

Source: 7th. & 8th.Malaysia's 5-Year Plan 1996-2005

 


 


Following is the distribution of labor force according to age group, which is the total percentage of employed and unemployed workers over a decade, abstracted from the Department of Statistics Malaysia.  Both the dispositions shows that youth population between the age group 15-24 is increasing gradually over the year yet the labor force for the same age group is descending, for both male and female in Malaysia compare to those between the age group 25-54.

 

Table 1.3- Malaysia: Percentage Distribution of Labor Force by Age Group, 1990-2000

 

Age Group

1990

1992

1993

1995

1996

1997

1998

1999

2000

 

15-64

15-24

25-54

 

100.0

29.2

65.1

 

100.0

27.8

66.2

 

100.0

26.7

67.6

 

100.0

25.4

68.7

 

100.0

25.7

68.5

 

100.0

25.1

69.1

 

 

100.0

23.8

70.4

 

100.0

23.8

70.6

 

100.0

23.3

70.9

Source: Department of Statistics, Malaysia

 

The following table shows a comparison of total labour force by age group and gender for the year 1990 and 2000.

 

Table1.4-