The storm reaches our shores…


The storm has reached our shores.

In Kedah, 1,429 workers from 17 factories have been “temporarily” laid off.

In Kuching, 1,500 workers have been retrenched as Western Digital shuts its plant in March. About 60 per cent of these workers are reportedly married with children. The job losses account for 15 per cent of the 10,000 workers in the electronics sector in Sarawak.

Another 3,250 workers around the country, mainly from the electronics sector, are expected to be retrenched by over 130 employers in the next three months. And that’s just the official estimate.

Earlier in June, 1,600 workers in Nikko Electronics on mainland Penang lost their jobs when the company said it was unable to continue operations. They received a pittance in compensation.

Can you imagine what it will be like when we feel the full impact of the storm next year? Are we really prepared? Will we also come up with measures to make our economy more sustainable and socially just? It’s also time we put in place a comprehensive safety net (a national retrenchment fund) and begin re-training workers with skills to become self-employed. Unfortunately, this would require federal initiatives or funding, and that could be too little, too late.

The economic stimulus package so far is unlikely to be enough. What we need are measures to boost consumer spending. But low-income workers are already spending all their wages to support their families, so how can their spending be increased? To stimulate the economy, the lower-income group need to have more money in their pockets and the most effective way to raise their purchasing power would be to enforce a decent minimum wage, perhaps in stages and across sectors.

Economist Charles Santiago stresses the importance of a strong social safety net:

Clearly, we have not learnt important lessons from the 1997 economic crisis. How is the government going to cope with high levels of unemployment which involves workers returning from Singapore, retrenched local and migrant workers and workers in the informal sector?

Government inertia and the absence of a social safety net threaten to turn the economic crisis in to a full blown social crisis.

It should be obvious to everyone that some drastic steps need to be taken. As an urgent priority the government should commit to a RM 3 billion retrenchment fund as an immediate initiative to mitigate the negative snowball or multiplier effect of job losses, given that we are a demand-led economy. This would create confidence in the business community, workers and people at large.

Just as importantly, the retrenchment fund would alleviate human suffering. Among other things, it could provide or expand unemployment benefits including food stamps or vouchers to neutralise the income losses of unemployed workers and vulnerable groups.

By putting money into the hands of these groups, retrenched workers would still be able to pay their mortgages and rents and keep their homes, continue buying consumer goods, boosting demand in the sector and subsequently in the capital goods sector. A workers’ retraining programme should be part of the package.

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6 Jan 2009 5.30pm

Dear Bow,

If you really considered us east Malaysian as a brother and sister please help us to eradicate the phantom voters and please bear in mind if PR fail in east Malaysia again. Do you think PR will take over the country. Do you think all the west Malaysian making a right choice?

The PR members simply not doing enough for the Sabah peoples.

31 Dec 2008 12.28pm

First of all, would like to take this opportunity to wish all comrades (Malaysian lah) a Happy 2009. May this new year bring stability and peace to our beloved homeland as there is nothing much we can do except to brace this turmoil bravely.

I would like to believe this ‘storm’ will open up the eyes/teach them a lesson of our ‘blind’ politicians of protectionism (ie:NEP and etc).

31 Dec 2008 1.11am

So long as our brother and sister from east Malaysia want to continue support west Malaysia corrupt and cunning racist politicians, they must be prepared to live in poverty by subsidizing master race lavish life style and face the difficulty ahead of them, they need to make the right choice next time!!

30 Dec 2008 10.05am

I am worry about Sabahan, those”rich” state had been stocking some goodies when economy was booming. But sad to said Sabahan has nothing and it was the poorest state in the country many of families have little stock to spare during this stormy weather. The cost of living here is ridiculously high, we have the country highest parking fees and politician promised to revise the fees before election. However, nothing materialized. Here timber tycoon and Ex-timber tycoon live like a king. You can see “Ninja King” run free in Kota Kinabalu.Peoples here suffer a lot if compare to their Peninsula… Read more »

30 Dec 2008 9.58am

Anil i must say you and the rest of the world is barking up the wrong tree when you stress on consumer spending or what some would like to call consumer confidance (CF). Actually what drives an economy is not CF but the value producers i.e – the guys who produces the cars, the houses, the food and computers. Yes these guys drive the economy – they make things cheaper, thus you dont need to keep spending more money. But why we dont see this happening. Cos we always have the middle man call the goverment who will put restictions… Read more »

Dr.Hamid Ibrahim
Dr.Hamid Ibrahim
30 Dec 2008 7.31am

Dear Anil Actually, I was thinking to write to Subramaniam – On Tuesday 23rd it appeared in the NST as the Dr saying: ” 4,700 t lose jobs as electronics sector takes a hit” If you look at his past statements, I wonder whether he is a Minister for Labour which was the original title from 1955 unti lately, when the Administrators changed to “Human Resources” Manickavasagam was once Minister for Labour in the real sence of the word. He attended to workers problems. From the tone of Subramaniam’s statements I see that he is NOT protecting the workers interest,… Read more »

30 Dec 2008 2.13am

I got to agree with Anil this time. Something must be done. Time to have a tripartite commite with the government, labour unions and the employers. LGE must set up a working commitee on this. Immediately. While bringing in more investors. More economic environment leads to more jobs. More jobs means less poor people. More money to spend. Voila, a sustained and growing economy.

30 Dec 2008 12.46am

High ranking Malaysia government officials helping others????? You gotta be kidding, it has never happened in our nation history, why should it happen now, with the exception of helping only one particular race.

30 Dec 2008 12.29am

Anil;Thanks for brought back te comment.Happy New Year.

29 Dec 2008 10.55pm

Yes,the storm is here before the tsunami which is just at the back…,The Malaysian government should get its priorites right,and start having some funds to handle the crisis.. Najib should forget about the Malays in other countries,he should start looking at our own backyard and help the poor Malaysian of all races..who are in more dire needs at this crucial time…if there is anyone he wants to help..he should look at Mongolia and help the Altantuya family..!and concentrate on Malaysian economy and its people!

29 Dec 2008 10.05pm

pittance in compensation?
anil, guess you know the compensation is even taxable.
say, you have earned RM25,000 until the month of June which means you are not in the taxable bracket. you rec another RM25,000 as retrenchment benefit. This puts you in taxable bracket! This is the most compassionate GOVT, isnt it?
when you are down, they even take away your money!

29 Dec 2008 6.58pm

Did somebody say Malaysia would help the Malays from other countries of the world?

29 Dec 2008 6.25pm

Some sort of stimulus package from government is definitely needed to help the situation. I am against just hand out without works but maybe some form of projects that cater for our future population capacity. Keep the package small so that it can be distributed/tender out to many smaller different companies rather than just one mega conglomerate that come in and swallow everything, then waste it all with abandoned projects due to corruption. If the parcel of fund is small, it is easier to manage with efficiency, red flag can be raised once certain project become stalled, once the $… Read more »

29 Dec 2008 4.36pm

Why do you need to worry Anil? Their grandfather (UMNO Govt) will eventually give them jobs in the various govt sectors and PLCs, training, subsidy scheme, tell them to go plant vegetable and offered a Felda scheme program or given more class F contractor licenses, taxi permits and other forms of govt guaranteed ‘free’ bank loans …

You better worry about those that are not retrenched and not have access to those stuff mentioned above.