Are Malaysians Too Lazy To Deserve Minimum Wage?

Hantu Laut

Can employers be trusted to pay fair wages to their employees?

Malaysia's salary structure at the lower end of the spectrum is unfair and invidious.Employers can't be trusted to pay fair wages to their employees. That's why Malaysia needs to introduce a minimum wage legislation to compel employers to pay minimum basic pay for workers to enable them to sustain a decent life for them and their families.

The plantation,construction and manufacturing industries are making too much money for themselves at the expense of the Malaysian workers.Most companies in Malaysia have poor or non-existence incentive schemes where employees get share of the profits.

Malaysian employers may not be the worst in the world but are still below par compared to countries like Hong Kong, Singapore, Taiwan and South Korea. Significant portion of our GDP still come from the sweatshops, where bigger chunk of the labour market and low wages are concentrated.

The are two conflicting schools of thought about minimum wage.The proponents say that it increases the standard of living of workers, reduces poverty, and forces businesses to be more efficient, while the opponents of minimum wage say that if it is high enough to be effective, it increases unemployment, particularly among workers with very low productivity. Former Prime Minister Tun Mahathir Mohammad was against minimum wage.

The absence of minimum wage in Malaysia has shied away locals from menial jobs or those they consider below them and attracted swarms of cheap migrant workers to this country.Our low wage is low for Malaysians but not low for these migrant workers.The construction and plantation industries are the two biggest employers of migrant workers.Send just half of them back home and you would see the collapse of these two sectors.

In 2006 Indonesian workers remitted a whooping US$2.7 billion back to their home country.The figure did not include foreign workers of other nationalities.Malaysia has almost 2 million registered foreign workers and possibly close to the same figure illegal foreign workers who came in illegally into the country, making Malaysia the biggest importer of labor in Asia.

Malaysians do not realise that over US$6.0 billion left this country annually as foreign workers remittances.If allowed to continue, this anomaly will eventually make Malaysian workers fall into the hardcore poor category and raising the unemployment rate as locals refused to take up these types of low paying jobs.

According to World Bank estimates, global remittances totaled US$414 billion in 2009, of which US$316 billion went to developing countries that involved 192 million migrant workers.In the Asean region, Philippines is still the biggest recipient of overseas workers remittances which stood at 13% Inflow and 0% Outflow in 2007.

Among the Asian tigers only Singapore and Malaysia do not have minimum wage policy. While Singapore let market forces set the minimum wage, Malaysia still allow sweatshops, utilising cheap foreign labour and victims of human trafficking to exist, resulting in the country being placed on the US Congress TVPA Tier 2 Watch List on human trafficking.

With minimum wage and wage increase there must be corresponding increase in productivity, locals taking up jobs previously held by migrant workers and the reduction of outflow of remittances.

Without these goals in mind and achieving them successfully, minimum wage would be disastrous and one that would put Malaysia in much bigger trouble.

Unless, the government can assure the goals are met, minimum wage would create higher unemployment, higher inflation and even bigger cash outflow out of the country.

The eventualities would be even grimmer than now if locals still refused to take up the jobs and migrant workers continue to stay, thereby, increasing the outflow of cash remittances exponentially.

There is a high likelihood that the minimum wage may failed to spur the nation to higher economic progress, because secretly the government knew the bumiputras, which form major part of the employment market are lazy and the man who knew better is Tun Mahathir Mohammad, hence his objection to its implementation.

Where Crude Oil Heading For?

Hantu Laut

Have we reached 'peak oil'? Would the world's industrial output come to a grinding halt when we ran out of fossil fuel.

Peak oil is not about absolute depletion of crude oil and the world running out of it.It is a theory of whether oil extraction have reached its peak and in terminal decline as featured in the 'Hubbart Curve'.

Below is Hubbart's theoretical chart

Click to read:

From the said chart he theorised that oil extraction would decline to zero by the year 2200.

Will it happen? I would think so, maybe, not on the exact Hubbart's time frame, but the day would come when mother earth would run out of fossil fuel. I am also optimistic that by then humans would have found abundance of alternative sources of energy through technological advancement and new inventions capable of mass production of energy producing substances.

The recent high oil prices we saw this year was not the consequence of the law of supply and demand but has an added element of human greed in the form of speculation of oil futures.Again greedy speculators took advantage of this forward and futures contracts and took it to the casinos.

In 1972 the price of crude oil was around US$3.00 a barrel.During the Yom Kippur War or the Arab Oil Embargo in 1973/74 the price of oil quadrupled to US$12.00, not because of shortages but because of Arab's anger at America and the West for having sided with Israel.The Arabs put a brake on productions that increased the price.This year we saw the highest price of over US$150 per barrel fuelled by rising demands and needless to say price highly aggravated by speculations.

Prices have begun to fall over recent weeks as speculators moved out of the market in anticipation of the financial market collapse.The crude oil market is now finding its own price level.

Below is a chart showing the prices of crude between 1947 to May 2008:

Click to enlarge

With increasingly high unemployment in the developed economies, industrial outputs are going to plummet to a low level and consumption of energy would likewise follow.

As more people lose their jobs, businesses going into bankruptcies and reduction in global industrial outputs the demand for oil would show a sharp decline.Consumption would continue to decline as long as the global economy continue to shrink which is expected to continue well into 2009.With reduced global demand prices are expected to fall below US$50 a barrel before the year end.

If the global recession become hard-headed and carry on without any sign of recovery than prices may even drop below US$30 per barrel by the first-half of 2009.

It may sound like good news but it is not.In fact it is a scary scenario, it means the global economy is in the doldrums and there would be widespread hardship among the populace of the world.

Those who have cash are kings and can go bargain hunting.

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The Ugly Singaporeans

Hantu Laut

The United Nations will launch "Day Off" campaign in Singapore on Thursday to drive home the point that a day off every week for foreign maids working in the city state should be made mandatory.

The gleaming city state of Singapore has one of the highest per capita income in Asia and considered a highly developed nation. Unfortunately, this squeaky clean city has one of the worse working conditions for foreign maids and a government who doesn't care at all for the foreign domestic workers dreadful terms of employment.

Not only are they poorly paid, many are not given a day off for the whole duration of their contracts.Salaries are paid on discriminatory basis based on country of origin and colour of the skin.

Indonesia and Sri Lankan maids are paid up to S$280 a month and Filipinas up to $350.In comparison, Hong Kong and Taiwan employers pay US$500 and US$550 respectively.

There are close to 170,000 foreign maids in Singapore and half of this number are believed not to have a rest day at all according to a United Nation's report and some have to work almost round the clock. The Singapore government has done nothing at all to stop this abuse of human rights.Domestic workers are not included in the country's employment act and are, therefore, left at the mercy of their employers.

How could such a modern and highly developed society behaved in such inhuman, uncivilised and appalling manner.This is nothing less than modern day slavery, getting maximum output on a meagre payment and horrendous working conditions.

There were a few cases of maid abuse before which seemed to have ceased after government harsh punishment on the perpetrators. For fear of losing their only source of income there may be significant number of unreported cases of abuse.

It is obvious most Singaporeans can only be disciplined by force of law, just like littering and breaking of the highway codes.They don't do it out of their sense of civic pride.They don't do it in their country because of the very strict laws.

The moment they come to Malaysia, they treat it like one big trash can and the Malaysian highways as race tracks and for some no need to pay traffic summonses.