Who is actually doing the subsidizing?

With the ongoing politicization of migrant labor in the country, I have been noticing the re-emergence of some deeply problematic rhetoric and beliefs about foreign labor in the country, including that of migrants being a burden on the host society. For example, the false understanding of remittances and the ‘outflow’ of money emerges when we are only able to look at migration and labor through the very narrow lens of the ‘host’ country, in this case Malaysia. There are illuminating studies done by scholars such as Faranak Miraftab (Global Heartland) and David Bacon (Illegal People), as well as those closer to home (Born out of Place by Nicole Constable and Servants of Globalization by Rhacel Parrenas), where they seek to show how a wider transnational understanding of migration actually disrupts and challenges some very wrong beliefs and assumptions. One particularly important one is the belief about remittances and the burden of ‘subsidizing’ foreign workers, which many Malaysian leaders are quick to target and is a popular go-to accusation in public discourse.

Take, for example, the oft-heard comment that “foreign workers are a problem because they are making money in Malaysia and then remitting a lot of it to their home countries”. This is seen as a ‘problem’ mainly because of the perception that remittances represent a loss to Malaysia (or any host country) from an economic standpoint. But what if, as Faranak Miraftab suggests, we look at what remittances actually serve to achieve, not just from the narrow view of financial outflows and inflows but from the perspective of labor and social reproduction? To put it in simple terms, what are remittances actually used for? Research and studies in the last decade have shown clearly how much remittances and the general transnational fragmentation of labor and social reproduction serves to enable and help facilitate the rapid development and growth of ‘host’ societies like Malaysia. Why and how does this work?

Migrants remit money not just so their families can ‘profit’ from the wealth of their hosting countries. Majority of remittances serve a very different purposes – they are used to supplement or, in many cases, cover for the fact that sending communities often lack sufficient public resources and capacities for critical needs such as healthcare, education and housing. Remittances to poorer regions in Philippines, India, Indonesia, Myanmar and Bangladesh, just to name a few, are not some big new ‘savings’ account that suddenly gives people a huge economic boost. Instead they are, by necessity, needed for very basic things that are no longer being provided by public institutions. How does this change the picture for Malaysia and Malaysians? For one thing, remittances are taken directly from the monetary income that foreign workers earn. Remittances are used for the same purposes that local Malaysians depend on their employee benefits, government subsidies (housing) and EPF (pension funds) to help subsidize. As local citizens we generally do not expect to pay for healthcare completely out-of-pocket, or full price for our first homes, and we expect our employers to contribute to our retirement funds. These are essential and very basic items that make our jobs affordable for us. These are things that help give added value to our work. Now imagine if we earned about the same or less than what we do financially at our jobs and yet had none of those other benefits?

Not only would we not want to stay at those jobs, but the jobs themselves would quickly be devalued and become perceived as close to worthless. As Malaysians, we often forget that we not only rely on our monetary income, but these intangible benefits and subsidies that help us, and our families, live comfortable and meaningful lives. Good working conditions, that come with strong benefits and protections such as reasonable working hours, maternity leave, promotions, and opportunities for advancement, help us derive meaning from our work, in addition to being productive citizens, and allow future generations to thrive by having something to aspire to. After all, how many of us who are older become so happy to be able to use our retirement funds to help send our children to college, and buy new homes? These intangible benefits and subsidies are essential to the reproduction of new generations of citizen workers.

Migrant remittances should be seen as being the portion of their income which is meant to cover ALL of those ‘intangibles and subsidies’ that local citizens take for granted and expect from our employers and public institutions. What this means is that rather than providing these additional benefits, protections and subsidies to the workers, we are expecting them to cover the entire cost – of educating their children, caring for their families day-to-day and unexpected needs, planning for their future – purely out of their modest paychecks. What this means is that remittances are not a loss for countries like Malaysia, but instead are what is saving us a lot of money and resources that we would otherwise have to provide. This, to put it differently, is how foreign labor subsidizes our own economic growth and success. The amount of money ‘lost’ to remittances pales by far in comparison to how much we save by not having to invest in the long-term benefits and protections of workers in predominantly working class sectors. This is the most important reason why we constantly turn to cheap, flexible and disposable migrant labor. Miraftab’s and Bacon’s work make for essential reading to better understand this system.

For our interests, the next question should be about what happened to these occupations, jobs and sectors that have rendered them so disposable and almost worthless beyond the output or service itself. Why, for example, are food service work treated and viewed so poorly, to the point that only precarious and desperate migrant workers would be willing to perform them? Why are jobs in construction categorized as ‘3-D’ (Dirty, Dangerous, and Demeaning) in Malaysia, whereas similar jobs in countries like US, Japan and Korea are far more valued and seen as respectable? The rather shallow and quick reason often given is that it is because these jobs are performed by foreigners – that the ‘dirty’ or ‘cheap’ dimensions somehow manifest from ‘who’ happens to be performing the work. While this may be an exaggeration, it is not too far from the very real logics of racism that inform both policy and public opinion on the matter.

A different, more historically grounded, perspective looks at how capitalism and globalization has come to devalue certain forms of work (and workers) while over-valuing others; we call them ‘low skill’ or unskilled, and reduce certain forms of work into close to worthless and disposable status. Throughout the 80s and 90s, between different national ‘Plans’ and initiatives for economic development, Malaysia inadvertently fragmented and degraded the quality and value of certain sectors of the economy – manufacturing and agriculture at first, then construction and more recently services. Initially, these were sectors granted special ‘protected’ status, which is to mean they were meant to be developed quickly and efficiently, which translated into favoring rapid capital accumulation at the cost of working conditions (no unions, minimal protections, and lack of representation):

  • Lack of basic necessities and protections means that locals can’t really afford to take up these jobs
  • Lack of collective bargaining means no voice for workers; compared to a lot of other sectors in working class where there are unions
  • Cultural and social devaluation of the jobs themselves as a result of all these trends.

The growth of those sectors helped promote the hyper-development that Malaysia has witnessed, especially in the urban areas. However, along with the rapid development and increase in wealth, we also witnessed an alarming growth in inequality  – which often is hidden or disguised by the statistic promoted by the government and local research institutes that Malaysian’s are among the ‘least unequal societies’ in Asia, if not the world. This statistic works purely because we’ve decided to remove entire sections of our workforce and society from the calculation. The metric and measure is very different when accounting for everyone who works and lives in our country. It makes no sense to only include Malaysians in a calculation of inequality because this leaves out not just large numbers of workers, but almost entire sectors of our economy that are vital to our growth – construction, agriculture, domestic work, just to name a few.

The current policy perspectives and public discourse in Malaysia, under the new government, is beginning to lean too much into the realm of populist and xenophobic reasoning that is far detached from a real grounded historical understanding of the development of Malaysian capitalism and economic globalization. As it stands, we’re too drawn in by the rhetoric of foreignness and ‘authenticity’, and the narrow view of migrants as burdens on our society, to really be able to make sound decisions and judgments. Yes, there needs to be change in various working-class sectors, but that change should not be informed by racialized logics of ‘who’ is appropriate to work as our cooks or cleaners, or whatever. Any policy aimed at employment and labor should be free of xenophobic agendas, and should primarily be focused on assessing the reasons for devaluation and degradation of working conditions, that made those jobs non-viable for most people in the first place.

We need to stop obsessing about the ‘appropriateness’ of who is working at these jobs, taking pot-shots at foreign workers who are actually subsidizing our own comfortable lifestyles, and attacking those who employ foreign workers. Instead we need to focus on addressing the value of these jobs in the first place, not just from economic standpoint, but in socio-cultural ones. How can we return to making service-work in food industry, construction, etc., be respectable again and valued again? The only way is by promoting better working conditions and giving workers a chance to represent themselves. Doing so would gradually lead make these jobs more appealing, actually affordable and sustainable for workers. This would help address the issue of trafficking and labor exploitation that characterizes labor migration, on one hand, and also promote greater local participation in these sectors on the other. In essence, it is about removing the incentives to force vulnerable people into exploited labor, by getting rid of what makes those form of work exploitable in the first place. The government, private sector and civil society need to engage with this effort to re-empower labor and workers in these devalued sectors, foreign or otherwise. Simply cutting out foreign workers will not produce the outcomes that people claim – It is more likely to just lead to a further race to the bottom and even more desperate conditions for workers themselves (just look at what has been happening in the Eurozone, for example, where the rising tide of xenophobic populism and shrinking economic productivity has put so many countries on the brink of crisis or worse).


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