1-10-2023 (KUALA LUMPUR) Bavanee Kengkan, a nurse living in Skudai, Johor, faces a daily 90-minute commute to her workplace in western Singapore. This laborious journey involves driving from her home to a bus stop in Gelang Patah, taking a public bus, crossing the Tuas Second Link, and then catching another bus to her job. Despite the strenuous commute, Bavanee firmly believes that her decision to work in Singapore has been one of the best choices she’s ever made. The primary factor driving her to seek employment in Singapore is the significantly higher salary that has allowed her family to live more comfortably.
Bavanee shared her story, saying, “Before I resigned as a nurse in 2014 in Malaysia, my basic salary was just RM2,700 per month. In Singapore, the basic salary for a junior nurse at the time was around S$2,500, which is equivalent to more than RM7,000. It makes a world of difference.” Within two years, she managed to pay off her family’s home debt and her husband’s business van loan, thanks to the additional income.
The phenomenon of Johoreans seeking jobs in Singapore is not new. The proximity to Singapore and the opportunity to earn two to three times their Malaysian wages have been compelling reasons for this trend. However, the recent depreciation of the Malaysian Ringgit against the Singapore Dollar has further increased the appeal of working in Singapore. The currency exchange rate has created more pressure on certain economic sectors in Johor, which were already struggling due to the effects of the COVID-19 pandemic.
Liew Chin Tong, Deputy Minister of Trade, Investment, and Industry, acknowledged the issue and the impact of low wages in Malaysia, particularly in contrast to the higher wages in Singapore. He said, “Every morning, tens of thousands of Malaysians on their motorbikes head to Singapore, at 4 am, 5 am. They are working in jobs that pay S$2,000. That is partly because in Malaysia, wages are very low… probably a third of the pay they earn in Singapore. In terms of currency conversion, there is a huge gap.” He emphasized the need to increase investment in technology, automation, and digitalization to drive wages up in Malaysia.
The shortage of local workers in Johor is particularly affecting sectors like healthcare and food and beverage. Johor Health and Unity Committee chairman Ling Tian Soon revealed that the healthcare sector is experiencing a significant shortage of nurses, with 2,800 vacancies in public hospitals alone. The shortage extends to private hospitals as well, making it difficult to meet the high demand, including from medical tourists.
In the food and beverage industry, there has been a decline of 40% in the number of chefs and cooks in Johor. The currency exchange rate encourages staff to work in Singapore, where they can earn more. This has resulted in longer waiting times and a more challenging work environment for the remaining staff.
To address the issue and retain local manpower, both the federal and state governments in Malaysia must work on raising local workers’ incomes through a longer-term approach. One suggestion is to implement a scheme similar to Singapore’s Progressive Wage Model (PWM), which seeks to raise the salaries of low-income workers by developing their skills. While Malaysia has raised its minimum wage to RM1,500, it’s essential to incentivize employees to seek out pay increases through upskilling and reskilling. Deputy Minister Liew believes that Johor companies should offer salaries around two-thirds of what is offered in Singapore, particularly in the manufacturing sector.
However, Thomas Mathew, Chief Executive of Talent Corporation Malaysia, stated that it might be unrealistic to expect Johor companies to match Singapore salaries, as they have to factor in existing operational costs and account for shareholders. He believes market forces should determine wage levels.
Economist Lee Heng Guie suggests that employers unable to raise wages may recruit employees from other states in Malaysia facing youth unemployment and underemployment issues. He also emphasized the importance of local government efforts to boost employability and skill sets among Johoreans.
Ultimately, reducing the wage disparity with Singapore and increasing employment opportunities in Malaysia will be crucial to retaining local talent and discouraging workers from crossing the border to find jobs in Singapore.
