Labour Market Segmentation in Malaysian Services

Preface

Preface Most studies of labour in developing countries have focused on the agricultural workforce and, more recently, on industrial workers, despite the fact that the services sector has long accounted for more of the labour force than manufacturing. This is as true of Malaysia as it is for most developing countries. Studies of those working in services have tended to focus on those in the public sector and, in recent decades, the informal sector, with the former considered “modern”, and the latter “traditional”. This study of workers in services also covers those in private enterprises, both modern (e.g. financial services) and traditional (e.g. transportation services), although such categories are themselves moot. After all, money-lending is an activity which has long existed, even in pre-modern times, while most transportation services today are decidedly modern. The other novel element in this study is the focus on what has been called labour market segmentation, with considerable emphasis on ethnic and gender segmentation besides the other types of segmentation considered by the relevant literature, which emerged in the 1970s and 1980s. This study uses the labour market segmentation approach to develop an overview of labour market processes in the Malaysian service sector (Khong, 1991: Chap. 1). Of particular importance are the impact of structural change in the economy and the interaction between these processes and the labour market on job and pay opportunities. The study is based on official data as well as an earlier survey and interviews. The bulk of the empirical data is from secondary data culled from censuses, surveys, journals, bulletins, government publications, international research papers, unpublished materials, press reports, seminar papers and other relevant sources of information. These were thoroughly studied and follow-up open-ended interviews were conducted with leading representatives, experts and policy planners involved in the service sector to solicit perspectives, opinions and other information with which the secondary data could be interpreted to build a composite picture of labour processes in the service sector. Due to the xiii xiv Preface heterogeneity of the service sector, interview questions were structured along general lines to determine the job classifications and their recruitment criteria; the determinants of wages and the dynamics of wage and non-wage differentials within the industry/sector, and how they compare with other industries/sectors; mobility patterns and career prospects associated with each sector and major occupational category; and the problems and prospects of the sector, and their effect on labour within that sector. In the course of collecting data and conducting interviews, the most frustrating problem was the lack of readily available up-to-date information and the reluctance of government officials to provide unpublished research studies undertaken by the Malaysian government and international bodies such as the International Labour Organization. Available statistics were usually a few years out-of-date as official census/survey statistics are usually published after long delays. Several government officials cited the amended Official Secrets Act of 1986 as a constraint, while bureaucratic red-tape in the private sector also limited the openness and readiness of executives to discuss company data although they were willing to provide information on the industry as a whole. The first chapter reviews the transformation of the Malaysian economy in the last half century since Malaya gained independence in 1957. The second chapter traces the origins and dynamics of ethnic, gender and class segmentation in the Malaysian labour market while recognizing the significant role of the state intervention in the allocation of labour. The third and fourth chapters review the determinants of differential job access and remuneration associated with traditional and modern services respectively, with emphasis on the role of ethnicity, gender and some other socio-economic and political factors shaping career paths and life opportunities. These chapters compare and contrast the diverse factors influencing recruitment, pay and mobility systems in modern and traditional services. The concluding chapter reviews the transformation of Malaysian services, and its interaction with labour market segmentation, before making recommendations for promoting social integration and stability in an ethnically polarized society. ...