MALAYSIAN Employers Federation executive director Datuk Shamsuddin Bardan (pix) believes the Covid-19 pandemic will cost more than two million people in Malaysia their jobs.
He told China Press in a report published yesterday it is quite likely that the domestic job market would only come out of its doldrums by the first half of next year.
Describing Bank Negara Malaysia’s forecast of 4% jobless rate for this year as overly optimistic, Shamsuddin believed it would be much higher.
“More than 500,000 locals have already lost their jobs due to the pandemic. I believe the unemployment rate would soar to 10% or even 15%, and some two million people might be laid off (eventually),” he said.
“Based on its latest survey, the Statistics Department foresees the number of layoffs this year to exceed one million. This is very bad, (and worse than the 1997-1998) Asian financial crisis which saw about 900,000 workers retrenched.”
He said because the law requires that foreigners be the first to go in any retrenchment exercise, some 800,000 foreign workers were laid off during the Asian financial crisis.
And now, employers might be forced to send their foreign workers home, he added.
Shamsuddin said unless the government provides special subsidy, employers will have to bear the high repatriation cost of their foreign workers, an additional burden on employers already weighed down by having to continue to provide these workers with accommodation and food during the MCO period.
He also urged the government to increase the wage subsidy for employee retention under the economic stimulus package as the current rate is not enough for employers to meet their expenses.
He said employers and the government should work together to ensure workers are not retrenched but most companies have cash flow only enough for two months.