Muhyiddin must address immediate measures after country reaches a “10-year high” unemployment

According to the International Monetary Fund (IMF) in its recent economic outlook on April 2020, it is projected Malaysia’s unemployment will spike to 4.9% in 2020, before easing to 3.4 to 2021.

It has been reported that 610,500 Malaysians were unemployed in March due to the impact of the movement control order (MCO), the highest unemployment rate in 10 years.

We only had unemployment of 3.2 % or “full employment” in February but have since deteriorated and would likely worsen over the next few months.

In the US, the unemployment rate has hit 14.7%, the highest since 1930. According to data from the Department of Statistics Malaysia (DOSM), 53.4% of companies/businesses are only able to survive another 1-2 months with their current wage bill.

The data above shows that any recovery of the economy will probably be in 2021, and currently there could be a surge of unemployment from 3.2% to 4.9% if the data from IMF checks out.

This unemployment figure is extremely worrying and should have prompted the Federal government to announce measures to curb it, but that has not happened.

Instead, the International Trade and Industry Minister Mohamed Azmin Ali, said that employers should rely less on the labour force when reopening their businesses. This is a highly inconsiderate statement considering what employees are going through at the moment.

There should not be a zero-sum approach where technology is concerned, rather there should be a focus on how workers could be upskilled using these technologies.

It is time that Prime Minister Muhyiddin Yassin takes the data on unemployment seriously and announce measures to boost employment and the survival of businesses.

Muhyiddin must realise that the unemployment figure does not include Malaysians that are working in the Gig Economy as it has yet to be regulated.

It is safe to say that the number of unemployed is higher than we know.

Is the government oblivious to how far reaching our unemployment crisis is?

Perhaps the government can consider these measures to boost employment:

1. As an immediate measure, the Government should emulate the approach of countries like Singapore, Denmark and Australia where their strategy of doing what it takes to support the economy and to save as many as jobs as possible involved spending far more than their budgets would normally allow.

They also allowed their central banks to pump tremendous amount of liquidity into the financial system, including the use of bonds.

2. There is a need to broaden the wage subsidy program to include mid-tier companies that employ more than 200 workers and increase the wage subsidy program to 50% of the salary.

The current RM600 per month is less than 10% of company payroll. This is far too low compared to 70% to 80% wage subsidies offered by other governments around the world.

There is a revolutionary proposal in the US Congress that every working-class household receives USD 2,000 as emergency payment per month for each family member until the pandemic is over. Perhaps the government can study this move as well.

3. It is vital to set up a parliamentary bi-partisan task force to come up with measures to solve the increasing unemployment. This task force will play a role in facilitating dialogue between employers, unions and other stakeholders so there could be greater collaboration to mitigate unemployment.
4. Currently there is scarcity of digital skills in SMEs. There should be Government initiated programmes to train as many as possible on digital transformation and automation of businesses that would later add value to organisations that are recovering from the current economic turmoil.

These technologies would help to increase productivity, speed up our economic recovery post-MCO and enhance the skills of our human capital.

5. The government needs to legislate for more labour market flexibility in terms of encouraging remote working and flexible hours. Such flexibility based on knowledge, skills and abilities of the workforce would help make them more valuable to organisations post-MCO instead of retrenching them and causing a brain-drain later. We need to preserve and protect skilled workers who are a valuable asset to the nation.
6. There is also a need to value our frontline employees such as nurses, cleaners, garbage collectors, housekeepers and store workers by recognising their skills through certification. This will also reduce the reliance of foreign workers. We need to enhance the skill-set of our frontliners who keep our nation healthy, safe and clean to ensure the nation remains a top destination for tourist post-MCO.

Under the Shared Prosperity Vision 2030 (SPV2030), we targeted to reach a skilled workforce of 35% from the current 28%. We need more measures to achieve this.

It is therefore vital that Prime Minister Muhyiddin Yassin takes a proactive role to resolve the growing unemployment in the country by studying the solutions above.

We do not want our unemployment to grow to the scale similar to that of the United States if this Government is too slow and inefficient in providing proper mechanisms for prevention and mitigation post-MCO recovery.