Unemployment may rise as demand slows
The anticipated economic slowdown is likely to result in more people losing their employment, although the retrenchments may not reach the scale seen during the 1997/1998 Asian financial crisis.
Malaysian Trades Union Congress (MTUC) secretary-general G Rajasekaran said its feedback showed the country had not experienced a situation similar to that at the onset of the financial crisis. Nonetheless, the umbrella union was concerned about the welfare of the lower income group, he said.
“We have not seen any increase in retrenchment activities as of now, but the main concern would be for next year or even the coming months. In particular, our concern would be for blue-collar workers.
“With the expected slowdown of the economy, local workers, particularly those from the lower income brackets are bracing themselves for the possibility of retrenchment and slower hiring rate, as most employers would rather use cheaper foreign labour to replace them,” Rajasekaran told The Edge Financial Daily.
If foreign labour employment is increased, particularly in the government infrastructure projects, the optimal effect of any fiscal stimulus may not be felt without high participation by local labour.
According to Rajasekaran, the downturn in certain heavy industries such as steel began right after the end of the Beijing Olympics, as demand started to slow even before the current financial turmoil set in.
Among the industries most likely to be affected are the manufacturing and services sectors, with the hotel industry already showing signs of a slowdown in activities. Retrenchment could gather pace if the situation persisted, said Rajasekaran.
Leading online job placement company, Jobstreet.Corp Bhd said a survey on employee confidence index showed that up to September this year, 50% of potential jobseekers said they were confident about their employability, compared with about 30% during the SARS outbreak in 2003.
Its chief operating officer Suresh Thiru said certain segments in the financial industry, such as stockbroking had started to show signs of a slowdown.
A random survey of 600 of it clients by Jobstreet during the first half of this year also found that 42% of companies said employment prospects would be worse than 2007.
Rajasekaran also questioned the accuracy of the country’s official unemployment rate of 3%-4%, saying that most of those who were retrenched or unemployed did not register with the government.
“We do not have unemployment benefits, therefore it makes no difference whether an unemployed registers or not. Retrenched workers would usually look for new jobs around factories, or through newspapers or job agencies for white-collar job seekers,” he said.
Source : The Edge Daily
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