The Malaysian Government must be more aggressive and imaginative in protecting jobs amid the worsening economic recession

Press Statement by the Pakatan Harapan Secretariat Council on Friday, 26th June 2020

The economic recession is worsening. Based on the latest Department of Statistics Malaysia (DOSM) figures, the unemployment rate had surged from 3.2% in January to 5.0% in April 2020. This is the worst monthly rate of unemployment in more than a decade. It will rise further as more companies serve notices to their employees throughout the months of May and June.

The 5.0% rate (corresponding to nearly 800,000 persons) is already high. Unfortunately, the rate understates the problem at hand. Due to technicalities in calculating the figure, at least two types of people were not been included in the 5.0% unemployment rate:

● First, 4.9 million people were not included in the rate. Standards implemented by DOSM and manuals prepared by the International Labor Organization (ILO) classify this group of individuals as employed because they are deemed to have a job to return to in the near future. Nevertheless and contrary to the expectations, there is no real guarantee those jobs would remain in place. To highlight the risk, even if only 10% of this class of workers had lost their jobs, then the unemployment rate would easily double the April 2020 figure.

● Second, 161,000 people left the labour force and as a result, they are not considered unemployed by DOSM. Many of them could be described as discouraged workers. In other words, they have given up looking for jobs.

The peculiarities of calculating the unemployment rate at a time of great uncertainty suggest we are understating the stress in the job market. Therefore, the government needs to adopt a more precautionary approach with the data and be more aggressive in combating the current recession, in terms of both protecting jobs as well as supporting the creation of new jobs.

Expand the public health and public education systems

Beyond cash transfers and other social assistance necessary in the short term, the availability of quality jobs is crucial in building a firm base for economic recovery and maintaining the living standards of all Malaysians. As jobs in the private sectors are being destroyed during this recession, Pakatan Harapan believes the government must play a greater role in creating new jobs, particularly in the public sector.

We propose to greatly expand both the public health and public education systems within the next 2 years. While the expansion will strengthen the public health system and provide additional education opportunities for more Malaysians, it will also create more jobs as well at a time when the private sector is laying off workers. If implemented, this proposal will require new hiring of nurses, doctors, teachers, lab administrators, teaching assistants, lecturers and researchers, among others.

Bold imagination needed

These two are among the few big concrete proposals the government could undertake. More can be done relatively fast. For instance, the Pakatan Harapan government had previously planned to launch the Malaysia@Work programme in the second quarter of 2020. The wage and hiring incentive programme would create 350,000 new jobs within 5 years for Malaysians. Expanding this programme to include public health and public education sectors as stated above would help in creating additional new quality jobs.

During a severe recession such as this, the government has a unique role in stabilizing the economy and preserving the welfare of the people. Indeed, COVID-19 is redefining the role of government. The new normal will demand the government to pivot and be bolder in trying out new approaches as well as ideas thought unworkable previously.

The government needs to do whatever it takes to save and create jobs to protect the livelihoods of all Malaysians during these difficult times. Address this pertinent problem and taking decisive action to solve it is far more important than speculating about a snap election. Failure to act decisively will leave a deep scar on the economy and exert a long term toll on the quality of life of all Malaysians.

YB DS Shamsul Iskandar Mohd Akin
Parti Keadilan Rakyat

YB Datuk Dr Hatta Ramli
Parti Amanah Negara

YB Liew Chin Tong
Parti Tindakan Demokratik

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