Remuneration counts a lot for workers, even those in the higher income bracket. As a result many have opted to work in Singapore where salaries are several times higher.
At the same time, school leavers are opting to work in the gig economy where returns are also higher than in the formal sector.
These are findings by the Institute of Labour Market Information and Analysis from a series of interviews conducted recently and unveiled to the media today.
The findings match those of a 2022 survey conducted by the Malaysian Employers Federation (MEF) which showed that a manager in the manufacturing sector in Malaysia received a basic monthly salary of RM10,304.
Across the Johor Causeway, the same job pays S$7,532, which is the equivalent of RM24,695. For the average Malaysian, this is a staggering sum.
This difference underlines the attractive employment prospects in the Lion City.
The wage gap is not limited to managerial positions. The remuneration in clerical roles in the administration and support services sector also reflect a significant disparity between Malaysia and Singapore.
A Malaysian clerk earns a monthly wage of RM2,065, while his Singaporean counterpart receives S$2,000, the equivalent of RM6,540. This is three times more than what they will earn in Malaysia.
The gap is most evident in the accommodation as well as food and beverages sub-sectors, where salaries in Singapore are nearly five times higher.
The income disparity across a wide range of occupations and industries paints a clear picture of the economic divide between Malaysia and Singapore.
For many Malaysians working in Singapore, the plus point extends beyond a fatter monthly pay packet.
A substantial number of cross-border commuters report being able to save a significant portion of their earnings.
The labour market information and analysis data shows that 51.1% of these individuals manage to save 1% to 10% of their monthly salaries, while an impressive 60% save over 10%.
Higher savings not just ensure them a more secure future but also the opportunity to invest in long-term goals.
The scenario is a lot less promising for those who choose to work in Malaysia.
In 2023, Bank Negara Malaysia reported that only 36% of Malaysian households would be able to sustain their expenses for the next three to six months in the event of a loss of income.
Sparking a gig revolution
The gig economy has attracted many who have not gone to university after completing their Sijil Pelajaran Malaysia (SPM) exams.
Instead, they have gone on to provide p-hailing or e-hailing services.
It has been estimated that in 2020, about 26% of the workforce was mostly engaged in gig work, making it a sector that has seen significant growth.
The reason, again, is tied to remuneration. Preliminary data shows that those in gig work are drawing higher incomes than fresh graduates starting out on their first jobs in the formal sector.
This highlights the need for businesses and educational institutions to address the perception that higher education does not guarantee quality jobs.
However, the instability of gig work, coupled with limited regulation and social support, keeps many gig workers hidden from the formal system, posing a significant challenge to the gig economy’s sustainability.