Over-reliance on foreign workers reason for unequal pay structure, says minister

Johari claimed luxury hotels in Jakarta, Indonesia charged up to three times more than those in Kuala Lumpur, which meant Malaysian hotels could still raise their prices to accommodate salaries for locals. — Picture by K.E. Ooi
Johari claimed luxury hotels in Jakarta, Indonesia charged up to three times more than those in Kuala Lumpur, which meant Malaysian hotels could still raise their prices to accommodate salaries for locals. — Picture by K.E. Ooi

KUALA LUMPUR, July 18 — Malaysia’s heavy reliance on foreign workers is hampering the country’s salary structure, Second Finance Minister Datuk Johari Abdul Ghani said today.

He said that while reliance was understandable in the plantation and construction industries, there is a price gap in the services industry that can make way for better pay for locals.

“You look at our hotels, [it is] among the cheapest in this region. Why? Because they get cheap workers. So if they pay properly to the locals, RM2,000, RM1,800 or RM2,500, they can always raise up the hotel price,” he said in a radio interview with BFM on its The Breakfast Grille programme this morning.

He claimed luxury hotels in Jakarta, Indonesia charged up to three times more than those in Kuala Lumpur, which meant Malaysian hotels could still raise their prices to accommodate salaries for locals.

“I still think that [in] this system, we need to be very focused, to make sure that whichever industry that we want to employ foreign workers, it has to be [an] industry that really really locals can’t adopt [sic],” he said.

In February, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi announced Putrajaya’s decision to freeze the recruitment of all foreign workers.

Ahmad Zahid, who is also home minister, added that the moratorium will remain in effect until the federal government is certain about the actual manpower requirements in the various sectors locally.

In May, Transport Minister Datuk Seri Liow Tiong Lai announced that the Cabinet had decided to exempt four industries from the moratorium, namely manufacturing, construction, plantations and furniture making.

And in an effort to reduce dependency on foreign workers, the government finally enforced minimum wage to RM1,000 a month in the peninsula and RM920 in Sabah and Sarawak from this month.

About 11 million Malaysians live with a household income below RM3,000 a month, and banded as the bottom 40 per cent.

Fresh graduates are among 400,000 Malaysians who are currently unemployed, the government said last year.

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