Profitable manufacturers reluctant to pay locals better wages, says Johari

Johari’s criticism is about wage fairness. He says profitable manufacturers are reluctant to pay Malaysian workers better wages, even when their businesses are earning millions. The issue matters because low pay can make manufacturing jobs less attractive to local workers and weaken the value of technical skills.

The reports also say companies pay TVET graduates wages similar to foreign workers. That suggests employers may be using a low-wage model rather than rewarding training, productivity or technical ability. Heavy dependence on foreign labour can reinforce this approach by keeping labour costs down.

Johari’s proposed direction is clearer wage recognition for locals and less reliance on foreign workers. He also wants foreign-worker hiring limited to 3D jobs. If manufacturers cannot attract Malaysians at current pay levels, higher wages may become necessary, especially as the government considers rejecting licences built around heavy foreign-labour use.

TVET graduates are people who complete technical and vocational education and training. Their courses usually focus on practical abilities, such as operating equipment, reading technical plans, maintaining machinery or applying workplace safety procedures. These skills can connect education directly to industrial jobs.

They are important to manufacturing because factories need more than general labour. They need workers who can handle machines, solve production problems and support quality control. A trained local workforce can also help companies build skills inside Malaysia instead of relying mainly on imported labour.

The reports highlight a concern: some employers pay TVET graduates the same wages as foreign workers. That can reduce the financial appeal of technical training. If wages do not reflect useful skills, fewer Malaysians may choose TVET, while manufacturers may struggle to develop a stronger domestic workforce.

The supplied source text does not state how many foreign workers Malaysia has or what percentage work in manufacturing. Therefore, an exact scale cannot be calculated from these headlines alone. The safest conclusion is qualitative: the manufacturing sector is described as relying heavily on foreign labour.

That reliance matters because manufacturing employers appear to use foreign workers across a wider range of jobs, while Johari says hiring should be limited to 3D work. The reports also connect foreign-worker dependence with concern about local wages and the treatment of TVET graduates.

The government’s proposed licensing policy shows the issue is considered significant. New manufacturing licences may be rejected when factory plans depend heavily on foreign labour. A precise assessment would require official counts by sector, occupation, nationality, legal status and year, none of which the supplied headlines provide.

Companies often set wages according to the cost of filling a job, not simply the worker’s qualification. If a factory can recruit workers at a similar rate for routine tasks, it may offer that rate to local and foreign workers alike. Profit pressure can also make employers reluctant to reward training fully.

The key mechanism is bargaining power. A large available labour pool gives employers more choice and can restrain wages. Immigration rules that permit substantial foreign recruitment may expand that pool. If TVET graduates are placed in jobs that do not use their technical abilities, their qualifications may not translate into higher starting pay.

This does not mean local and foreign workers have identical skills. It means pay can fail to reflect those differences. Johari’s criticism suggests that manufacturers should raise wages for skilled Malaysians and reduce reliance on foreign labour, particularly outside 3D jobs.

The phrase “3D jobs” commonly means work that is dirty, dangerous and difficult. These jobs may involve unpleasant surroundings, physical strain, safety risks or irregular schedules. Manufacturing can contain roles with such conditions, especially where work is repetitive, demanding or exposed to hazards.

Employers may recruit foreign workers for these positions when local applicants are unwilling to accept the conditions or wages. Foreign-worker programmes can give companies access to a larger labour pool. In turn, that can help factories continue operating without raising pay enough to attract more Malaysians.

Johari’s position is that foreign workers should be used mainly for 3D jobs, not as a broad substitute for local workers. The policy debate therefore concerns both recruitment and job quality. Better wages, safer workplaces and technical progression could make more manufacturing roles attractive to Malaysians.

Rejecting licences for factories built around heavy foreign-labour use would change the conditions for entering manufacturing. Companies might need to show stronger plans for hiring Malaysians, developing TVET talent, improving productivity or using technology. The policy would aim to reduce dependence rather than allow low-cost labour to remain the main solution.

Manufacturers could face higher wages, training costs and equipment investments. Workers might gain better pay and stronger demand for technical skills, but some planned factories could be delayed or cancelled. Consumers could eventually face higher prices if production costs rise, although improved productivity might offset some of that pressure.

The outcome would depend on implementation. A gradual transition could give firms time to train workers and redesign operations. A sudden restriction could create labour shortages and disrupt output. The reports indicate the government is considering licence rejection, but they provide no timetable or detailed criteria.

In a labour market, supply means the number of people willing and able to work, while demand means how many workers employers want. When demand exceeds supply, employers usually compete more strongly and wages tend to rise. When supply exceeds demand, workers have less bargaining power and wages may remain low.

Productivity also matters. A worker who produces more value, solves technical problems or reduces costly errors can justify higher pay if employers share those gains. But training does not guarantee higher wages when jobs are basic, firms have strong hiring alternatives or workers cannot negotiate effectively.

Immigration rules influence labour supply. Easier recruitment can expand the workforce, while tighter rules can reduce it. That may raise wages, but it can also increase employer costs. Johari’s call to reduce foreign-worker reliance connects immigration policy with wages, productivity, local training and manufacturing competitiveness.