I am pretty taken aback by the expansion of the Malaysian labor force in the past year or so. The rise has made me skeptical about the utility of the labor market numbers to ascertain the health of the economy. Whenever I look at it, I tell myself, wait until it normalizes. When? If you look at […]

An ageing population is a major economic problem to a number of developed countries. It is not ageing itself that is the issue or even slower economic growth. An aged society usually has an advanced and rich economy. Further economic growth does not mean much if the society is already extremely rich. The problem comes […]

I do not typically post news articles these days, but I think this news article is particularly relevant on one issue that I raised earlier. MALAYSIA is losing billions of ringgit in palm oil exports because there is not enough foreign workers to harvest fruit bunches in the oil palm fields. The Malaysian Palm Oil Board […]

One impact of minimum wage is the general increase in labor supply in the market. Let us be clear and not talk too generally or loosely. Precision is key. I think if you cannot be clear, then it is very likely that you do not understand or have not thought of the issue well enough. […]

(This is a really long reply and relatively technical. For summary in plain English, click here.) Let us begin with a real life conversation between friends of mine and a professor of economics. The professor highlighted how women were discriminated in a certain country and how that discrimination affected the labor market in a bad […]

Ahmad Fuad Rahmat wrote a short essay in support of minimum wage.[1] While there may be a number of reasons to support minimum wage, I believe he misunderstands some issues and mischaracterizes others while he attacks the anti-minimum wage camp. He first and foremost takes issue with Wan Saiful Wan Jan’s statement that ”when employers […]

In general, minimum wage affects the labor market negatively. At some level, it will increase the unemployment rate. That may happen either through direct disemployment as employers struggle to meet the cost, or through the freezing or insufficient job creation growth as the labor force increase. Whatever it is, I believe the relationship between minimum […]

There is a popular allegation that illegal immigration, or even immigration as a whole, is the culprit behind the level of unemployment Sabah is experiencing. I am unsure how accurate that is. First of all, while the unemployment rate of Malaysia nationwide was about 3.6% in 2009, the unemployment rate in Sabah was 5.5%. The […]

The prime minister has said it so many times. His administration wants to turn Malaysia into a high-income country.  One of several initiatives that the administration believes can help in that direction is the introduction of minimum wage through the establishment of the National Wage Council. In promoting its supposedly market-friendly and market-driven policy, the […]

I just ran through the recently released Malaysian labor force participation rate for May 2010 and I find it odd to see a huge drop in the rate. I wonder what explains the drop. Why suddenly a lot of individuals decided not to look for jobs anymore in May?

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