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Sunday, March 27, 2011

Population and quality of workers in Malaysia

Today, we have a population of about 28.25 million people (Bank Negara Malaysia, 2011). Then there are 12.6 million labour force, 12.2 million employed, and 0.42 million unemployed (Department of Statistics, 2011). When we make a comparison between unemployed and total number of labour force, we can say that the unemployment rate in Malaysia is about 3.4%. To measure active population, Labour Force Survey (LFS) by Department of Statistics uses the age limit of 15 to 64 years as the definition of labour force. The economically active population comprises those employed and unemployed, whereas those who are inactive is classified as outside the labour force.

The population size influences by initial number of population, birth rate, death rate, and migration. We also know that the number of children people have is very much a function of two variables: costs and choices. Costs depend not only on how much food and shelter you give to your children, but also on the time of parents. In most societies, most of that time is the mother’s time (even now in our society father also possible to be a homemaker), which has a value.

As we have become richer, and as women have become better educated are working outside the home more, the cost to them of spending time on children has risen. As these costs have risen, families are deterred from having as many children as they had in the past. They spend much of their time at workplace, and less time at home.

The second variable that economists recognize is that families are making choices about the quality of children’s lives in term of their education, training, and health. In modern economies, this quality component has become very important because the emphasis in modern economies is on knowledge, technology, and skills. But there is a tradeoff. If you spend more on each child’s skills, education, and training, you make children more costly and you are likely to have fewer children.

But we know that, it is not just the size of population that matters but the quality of that population it’s in term of level of education, talent and skills is more important. In other word, the quality of our workforce is also a matter of concern. Only 25 % of Malaysia's workforce is composed of highly skilled workers, compared to higher proportions in Singapore, Taiwan and Korea. The percentage of our population with tertiary education is lower than in other advanced developing countries.

Singapore and Taiwan, with a smaller size, but with a better trained and skilled population, has a per capita income much bigger than ours. Indonesia, with a large population and large land area, has a per capita income much lower, although it is now progressing well. The management of resources is therefore of critical importance. If we mismanage our resources, then a large population will lead us to a serious decline in our standard of living. It is the function of governments to ensure growth, and increasing prosperity through good governance, innovation and creativity.

The government has come out with an excellent plan to grow the economy - the New Economic Model and the Economic Transformation Programme. We must successfully implement this, not only to sustain our standard of living but to enhance it. All Malaysians should support the government's effort in this.

Surely a large market, through a larger population, will help and enable our industries to become larger and more efficient producers. But what will be critical is not just the size of the population but its capacity for innovation and creativity. This will depend on our education system to produce the skills and talent for a fast growing and modernizing economy. We need workers that can do activity such as product innovation and process innovation with their multidiscipline expertise.


CT said...

Dear Prof,

I do support the government's effort on the New Economic Model and the Economic Transformation Programme. The transformation of economy will increase demand for technological skills and expertise. Also, a worker equipped with tacit knowledge and a high level of thinking skills.

Therefore, it is hope that Malaysian government will ensure that the education and training system has the capacity to enhance the quality of intellectual capital as well as expand the human resource base.

Government also need to retrain and reskill the workers to minimize the effects of structural unemployment as well as to meet the new skill requirements of the knowledge-based economy.

Thank you,
Siti Aishah Abdullah
805683 -MBA UUM KL

Anonymous said...

For me, the most important is the young workers where unemployment are higher among them with social problems and are employed in unskilled/semiskilled job with low wages and depressing working conditions with the higher possibility of retrenchment. The government needs to provide skilled labour force that will serve the market demand.


Raja Azlan said...

Dear Prof,

I strongly agree with you that we have to support the Government in regards to the new economic model & ETP.

But Prof, don't you think as a citizen, with every day hard living to earn a decent salary... we are burdened with two most whole life loans - high cost of housing loan and car loan?

Best if you can discuss this in your next article. Are the other citizens in developed countries facing the same dilemma as Malaysians? How does this relate to Malaysian economics? What are the ways that the Government can do to help us Prof? With the small affordable cars, are we forgoing our family security from deadly accidents?

Raja Azlan (King)

hariyani said...

Look at our education syllabus especially for primary & secondary.More focus on academics but very minimum on technical and soft skills development.At the same time very minimum effort from Govt.especially for special kids.No much incentive from our government. This group of peoples always leave behind. Parents need to find their own solutions. To those who can afford this will have no issue.How about the poor.The life will not improve. Do we know what is the statistic of this special/disabled kids?If growing it will also contribute to high non employment rate.As compared to US, UK & Australia they really give priority to this type of kids. Well teachers handling this type of kids in this countries are well paid and respect by the community.In term of technical and soft skills we need to have an education system where we can identify the children talent.I proposed we can be part of the trainer on volunteer basis to school and Govt can it support maybe by giving tax rebate/tax exemption on number of hours spent i.e. 100 hours in a year for RM1000 tax rebate. So Govt can improve the education curriculum, cost saving and increase tax collection as tax payer see that their tax contribution give significant impact on country growth.
Rezzen KL 807774

yanaruto said...

I agree with you but not all Malaysians knew about the New Economic Model and Economic Transformation Program especially most of the young generation whom only care about the enjoyment and entertainment. As for my opinion about the unemployed, why not the fresh graduates create their own job or business instead of walk around with their certificates for interviews. By creating their own company and business, they not only able to leave from the unemployed problems but also able to create jobs for more unemployed people. Be a job creator not a job seeker... =)

Marine Tech UiTM.

WatieRashid said...

I am in the opinion that generally, the aim of Malaysia’s New Economic Model (NEM) is to bring the country out of its middle-income status, and push it to a high-income economy. As Msia’s population now (2010) has reached to 28.3million, I believe that govt are now seriously looking into 3 main important issues in the NEM: education, entrepreneur skills & institutional reform. Yes, agreed that tertiary education must be the main focus, as innovation & R&D require good universities. This depends on technology upgrading, the creation of a knowledge-economy and the development of a highly skilled workforce. With this it is hoped that the value-chain to move up by emphasising technology-intensive methods of production and by relying on innovation and research and development (R&D). All of this depends on a sound system of education. If our education systems still at the status quo (with the same old syllabus & systems), I don’t think NEM will be a success in terms of producing quality skilled workers or professionals...Regards.

-Shalawati Abd Rashid-
Matric:805682 (UUM_Rezzen_KL)

Irnee Safia said...

Dear Prof,
The birth rate in Malaysia is gradually dropping every year. Currently many couples choose to limit their family size due to economic constraint. Having more children will incur higher cost and require more dedicated time and attention. Many couple could not afford to have only 1 working partner leaving them with the choice of either sending the children to nurseries of hiring maids. The cost of sending to nursery rises proportional to the number of children while it is not easy to find trustworthy maid these days. Add other basic costs such as milk, food, diapers, medical expenses, education and miscellaneous expenses, having more children is becoming a luxury.
Intriguingly, less educated earning low income families usually have more children than their more well off counterparts. The main reason being higher educated parents emphasize on quality rather than quantity of children. They wanted their children to have the best opportunity possible to eventually be more successful than them in future. It is inevitable that as Malaysia was transformed into a high income country, the birth rate will drop even further. Higher income country will have the unwanted effect of high cost of living too. Even if there are excess family fund, they will be spent to give more quality education to less children (e.g sending kids to private schools instead of public school, piano lessons, oversea education etc.). Competition in job market will be fiercer as more people are educated. This vicious circle never ends.
Malaysia has many talented high quality professionals but these people opted to ply their trade overseas due to lucrative income offers. While they are many high quality workforce still living in the country, there are not enough opportunities available for these people to realize their potential. For example, there are many Aerospace Engineering ended up becoming Sales Engineers instead due to the small size of Malaysian Aerospace Industry not to mention other highly advanced technology field such as Nuclear Engineering. I am hopeful that the NEP and ETP will be successful to provide more opportunities for professionals working overseas to return and contribute to our economy and at the same time produce more high quality workforce. However, due to our dropping birthrate, by the time we finally become high income country, I foresee we will face aging workforce with shortage of workforce influx and forced to resort to immigration as currently adopted by developed countries.

Irnee Safia
Rezzen KL 808553

Anonymous said...

Dear Prof,

From the statistics and some of the statements that you have posed seems to raise a number of issues. Taking 20 years ago [in the 1980’s], the population of Malaysia was in the range of 13 million. Now the stats from bank negara have indicated a double fold. If the assumption is that Couples are are mindful producing children, how did the growth in population came about. This leaves the only option of immigration giving rise to the double fold in population in a spate of 20 years. The next question will be if the migration policy done correctly in Malaysia. Are we attracting the right kind of people – skilled or unskilled? Looking at the various developed countries, the immigration policy is quite strict and some thought need to be deliberated. Hope it could be one of the subjects in your next article.

Teles - 808562

Anonymous said...

Pada era globalisasi yang semakin kompetetif sekarang, hanya modal insan yang berkualiti dapat memajukan ekonomi negara. Oleh itu pekerja yang berkemahiran tinggi memainkan peranan penting dalam pembangunan negara. Bagi merealisasikan Wawasan 2020 negara memerlukan jumlah pekerja yag berkualiti. Pekerja berkualiti juga memberi gambaran dan imej yang baik kepada negara.

808559 Rezen KL

Anonymous said...

My opinion is that parents should not spoilt their kids by giving them the best to compensate the lost in spending time with them.
Knowing that there are still lot of rooms for improvement in our education system, but all and all, due to the precious 1 to 2 children per family, the so called overly focused will is slowly & surely causing serious social problem. Through my experience in people hiring and management, the young generation is no longer seeking long term job security. In fact they keep hopping jobs for quick monetary rewards or incompetent in coping with the job. Knowledge is important, but if the government can introduce area like social and problem solving skills, the will be able to reduce unemployment.
Thinking back, i grew up in poor family with another 3 siblings. Parents are busy working for money, we learn a lot of each other and most of the time we have to solve our own problems in school and later at work. But the children now is different, they grew up in a much protective environment, even at school. This definitely limit their survival skills like problem solving.
My recent holiday trip to Tokyo, and found that the young generations there often a lone ranger. They use a lot of phone SMS (not so much of voice call). A lot of vending machines for all kind of drinks & instant food on the street, the mall, etc. The world's highest vending machine per population. Apparently, Japan is facing this social problem where young generation hardly talk to each others, they prefer to buy from a vending machine who doesn't talk.
Therefore, before we end up with developing social problems, i hope the government can look into improving the teaching methods and skills set.

Michelle Wong

The Unsung History of Life said...

Dear Prof,

When we talk about education in Malaysia, often we forget to look into the aim of education process itself. We neglected the facts that education should prepare the person to face the challenges in the real world. In this case, to perform as a quality worker.

From what can be seen, education in Malaysia today does not prepare the students to face the challenge but more towards preparing them to excel in examination. What do people expect every time the SPM or STPM result being announced each year ? A better result compared to last year. Am I right ? If last year there was a candidate scored 18 A's, then this year there should be a candidate scoring 19 A's or 2 candidates scoring 18 A's. And each year the race continues....

This exam-based education does not prepare the students to become a quality worker when they step in into the real working life later. It is important for the people that responsible for the education system in Malaysia to think on how to improve the system so that it can produce a generation that are mush suitable to fit into working requirements..

212098 said...

Dear Prof,

I totally agree about the implementation of the ETP and GTP. It has really shows result in most of the programs.

However, even the economy is improved but the human capital of the country is not moving at the same pace with the economy.

Many degree holders are not as quality as before. Why does this happen?
In my opinion, the reason of this is just like what "The Unsung History of Life" said, Malaysia's education system focus at a wrong direction of training the student to score in examinations.

Even in University, we can see that the student are too focus in getting high grades. We cannot blame the students, because we are all use to the ways that put into our minds since we are young(Scoring in Exam = you are successful).

Education system have to restructure, emphasize more on Soft Skills.

A good example to look at is Ace Adventure. It is a "tuition centre" for english. but do not emphasize on grammer, verbs, noun. But the students are all pretty good in communicating and using the language. This is because the tuition centre encourage the students to speak in the class. As time goes by, the student will indirectly improve the language and also improve soft skill like presentation skill at the same time.

Another thing is, the choice of course the students of Local university being offered. Not like private college and university, we are not given the chance to choose what we want to study in the future. This really demotivateds the student especially being offered to some random course that does not even come across their minds. This has to be changed! This is also one of the reason why talents are flying out of Malaysia to complete their studies.
In some family, even the parents have to struggle to meet end needs, they too insist to send their children oversea knowing the system in local university are at low quality.

As a conclusion, Education have to restructure for the future of our country. Government might be able to follow how the GTP and ETP program been carried out and use it in Education. Do hope in near future there are programs that really look into improve and structure the education system of Malaysia.

Tee Ke Li said...

In my opinion, to make a good transformation will increase the quality of the workers. How to say that? The rural economic sector, which includes agricultural and non-agricultural activities, is now facing numerous challenges. That why need require the transformation to enhance its contribution to support Malaysia’s aspiration to become a high income nation by 2020. One of the National Blue Ocean Strategy is getting youth into agriculture. For example, My Kampung My Future ( MKMF) is one of the programme introduced by government among the youth. In the MKMF, will create a high value agriculture based economy for the youth. Besides, the agriculture competition will encourage creativity and innovation among the youth and traning them how to become a outstanding entrepreneur in agriculture field.

TEE KE LI,211798