Labour Market Segmentation in Malaysian Services

Labour Market Segmentation in Malaysian Services addresses the dearth of information on and lack of understanding of the labour market in Malaysia, especially in the service sector by developing a framework with which modern sector and traditional sector services could be analyzed within the broader context of Malaysian labour market processes. 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. 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data culled from censuses, surveys, journals, bulletins, government publications, international research papers, unpublished materials, press reports, seminar papers and other relevant sources of information.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 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