This article first appeared in The Edge Malaysia Weekly on December 16, 2019 - December 22, 2019

MALAYSIAN parents, like many of their Asian peers across the globe, have long prized education as possibly the only means for upward social mobility. This belief remains true today for the most part.

Even as education, especially degrees abroad, becomes more expensive for parents hoping for a better life for their children, a new path for a more comfortable life for the whole family seems to have emerged, even as the ringgit’s strength slips to levels below the 1997/98 financial crisis. While Malaysians have long crossed the Causeway for education as well as work, the draw probably intensified in August 2015, when the Singapore dollar hit three to the ringgit — a level it has stubbornly stayed at since.

It is little wonder that a Singapore Airlines recruitment drive in Kuala Lumpur in May this year made the headlines. It also made the rounds on social media as a means for Malaysians to earn a salary of more than RM10,000 a month. The salary of S$4,500 to become a “Singapore Girl” or SQ flight attendant in training is near the S$4,563 median salary in Singapore, but the ringgit equivalent of RM13,762 a month would place a person much higher up the income ladder in Malaysia.

While the top 20% individual income threshold is not publicly known, we know that RM13,148 is the threshold for the top 20 (T20) households in Malaysia.

The salary is probably attractive even among the 1.6 million degree holders in Malaysia, half of whom earned below RM5,030 a month last year, according to the Department of Statistics Malaysia’s (DoSM) Salary and Wages Survey Report 2018.

That is even more true for half of the country’s 4.96 million graduates — defined as people who have completed at least a two-year certification (including but not confined to a diploma or degree) from a university, college, polytechnic or a recognised equivalent — who took home a monthly salary of RM3,936 or below in 2018, according to the Graduates Statistics 2018 report released by DoSM last Friday. The median among urbanites was just slightly higher at RM4,013.

In fact, half of Malaysia’s 8.8 million wage earners earned less than RM2,308 a month last year — which translates into only S$755 a month, the salary of some foreign domestic workers from the Philippines in Singapore.

To be sure, a dollar-for-dollar equivalent may well be fairer as rent and cost of living in Singapore are also much higher than on this side of the Causeway. Yet, it seems that enough Malaysians are willing to work in the Lion City — and not just in comfortable workplaces, contrary to the notion that Malaysians shun so-called 3D or dirty, dangerous and demanding work.

“Some 500,000 Malaysians work in Singapore as cheap labour in jobs that pay S$2,000 and below. They do not work in Malaysia, not because Malaysians don’t do 3D jobs, it is a question of pay,” says Deputy Defence Minister and chairman of Research for Social Advancement (Refsa) Liew Chin Tong.

“The contradiction we face is that we export Malaysians to work as cheap labour in Singapore while we import millions of unskilled workers from other countries. Those who work as cheap labour in Singapore are prepared to come home if they get two-thirds of what they are paid in Singapore. So our economy will have to think about creating jobs that pay RM4,000 for skilled workers by reducing unskilled foreign labour through automation and technology,” Liew tells The Edge.

Foreign workers send some RM60 billion back to their home countries every year, money that could have benefited the Malaysian economy in terms of consumption spend and more, Prime Minister Tun Dr Mahathir Mohamad said in his “tough love” Labour Day message this year. He urged more Malaysians to embrace honest work, even 3D jobs, and earn a living using their skills rather than staying unemployed and expecting handouts from the government.

Of the 1.73 million non-citizens counted in the Malaysian labour force in 2018, there were 94,000 with tertiary education (no breakdown for degree holders) with median and average pay of RM2,727 and RM4,750 a month respectively.

Young and employed

Worryingly, nearly 79%, or 396,800 of the 504,300 unemployed people in Malaysia, are aged below 30, although those aged 15 to 29 only make up 29% of the population.

When launching the RM6.5 billion Malaysia@Work initiative last month — which is designed to help more unemployed Malaysians gain the necessary skills and on-the-job training to become contributors to the economy — Mahathir also called for 3D jobs to be re-branded as “dignified, desirable and dynamic” in Malaysia so more people would be willing to take on these tasks.

It is befitting that the initiatives — Graduates@Work, Women@Work, Locals@Work and Apprentice@Work — do not arbitrarily force employers to pay workers more and they not only benefit the unemployed but also those currently outside the labour market. The size of the labour force was 15.27 million as at October, with a labour participation rate of 68.7% and unemployment at 3.2%.

Participation from the 7.18 million population of working age currently outside the labour force would be important as there are only half a million people seeking jobs who are unable to find suitable employment. The official number of foreign workers in Malaysia is estimated at two million, although unofficial estimates are at least twice that number.

While these initiatives should prove beneficial for the economy, it does not address the huge draw from the currency difference across the Causeway.

As an observer says, if a number of “Singapore Girls” are Malaysians, surely Malaysia Airlines should be the one benefiting from the outstanding service pool. What of the talent pool necessary for the country to move up the value chain? Are they, too, being lured away, much like the ride-hailing decacorn company (worth over US$10 billion)?

While Mahathir recently acknowledged that the country is looking into the undervalued ringgit because of the impact on the cost of living, a solution to retain talent while ensuring the country’s other growth engine remains intact will not be easy. After all, a strong ringgit will give Malaysians better purchasing power, but it also makes exports pricier and Malaysia a less affordable travel destination for tourists. Yet, the draw stemming from the ringgit’s strength, or the lack of it, is an issue the powers that be must deftly take on.

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