This article first appeared in The Edge Malaysia Weekly on November 9, 2026 - November 15, 2026

Minister of Investment, Trade and Industry Datuk Seri Johari Abdul Ghani called out the elephant in the room when he questioned in Parliament why manufacturers who are earning lucrative profits are still reluctant to offer local workers RM2,000 a month — preferring instead to maintain starting salaries at the RM1,700 minimum wage.

Some of them offer local technical and vocational education and training (TVET) graduates wages that are no higher than baseline rates for low-skilled foreign labour, he revealed.

This reflects not just the country’s over-reliance on foreign labour — with the number of foreign workers in Malaysia having already reached 2.6 million, not including a substantial number of undocumented ones, according to Johari — but also its outdated compensation structure that refuses to value local talent.

For years, industry groups peddled the narrative that local youths were “unwilling to work”, a claim Johari rightly dismissed. As he pointed out, many Malaysians cross the Causeway daily for employment or to take up gig work in Singapore because the earnings there “made economic sense to them”.

The issue isn’t a lazy workforce, but an environment that perpetually offers unliveable wages, regardless of the higher skills offered. As Johari revealed, some companies that had operated in the country for 10 to 20 years remained dependent on foreign labour, even as Malaysia’s pool of TVET-trained workers expanded.

So the government’s decision to deny new manufacturing licences to facilities that perpetuate the heavy reliance on low-skilled foreign labour comes as long-overdue “tough love” that Malaysia clearly needs to push its industries towards better-paying jobs for locals and greater investments in automation.

As Johari put it, foreign workers should be confined to dirty, dangerous and difficult jobs, commonly referred to as “3D” work. For other roles, offer wages that make the jobs worthwhile for locals.

In the meantime, the government should work out a holistic policy on foreign worker recruitment to eliminate red tape and abuses, and provide economic stability for industries.

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