‘Feedback from World Bank to be presented in 13MP’
KUALA LUMPUR: The feedback on improving the welfare of informal workers, as outlined in the World Bank report on informal employment in the country, will be presented in the 13th Malaysia Plan (13MP), said Economy Ministry deputy secretary-general of policy Datuk Dr Zunika Mohamed.
Informal employment includes gig employment, which refers to jobs that are typically facilitated through digital labour platforms.
According to the Statistics Department, informal employment refers to workers who do not have access to at least one social security scheme or employment benefit.
“In moving forward, we should explore additional measures to support Malaysia’s informal sector, especially considering the significant issues and challenges they face.
“It is imperative that we engage in further discussions with the World Bank to collectively propose strategic solutions for inclusion in our 13MP,” she told reporters after the launch of the “Informal Employment in Malaysia: Trends, Challenges and Opportunities for Reform” report yesterday.
Zunika said the underemployment rate of formally employed workers had increased to 26.5 per cent in 2020 from 16.2 per cent in 2010.
The rate of informal employment is generally higher among the poorest households, and almost half of all informally employed workers are from B40 households.
“In sharp contrast, the underemployment rate of informally employed workers had increased to 73.2 per cent in 2020 from 23.7 per cent in 2010,” she said.
Zunika said due to digitalisation and the consequences of the Covid-19 pandemic, the nature of employment had transformed and further fuelled the growth of gig work.
She said the report also stated that existing provision for the informally employed workers in the context of retirement savings and protection against health and injury risks fell short of meeting their needs.
The inability or unwillingness to make contributions to social insurance schemes further stresses the disparity in social protection for informal workers.
“The stark reality, as we delve into the findings, is that informally employed workers grapple with a higher prevalence of skills-related underemployment and time-related underemployment compared to their formally employed counterparts,” she said.
The report was a collaborative effort between the Economy Ministry and the World Bank Group through the Reimbursable Advisory Services.
Improving the welfare of informal workers will continue to be one of the priorities for the government as highlighted in the midterm review of the 12th Malaysia Plan.
Zunika said the government had allocated RM100 million in matching grant for the self-employment social security scheme provided by Social Security Organisation.
“The voluntary i-Saraan programme under the Employees Provident Fund is further boosted by increasing the matching contribution value to the maximum of RM500 per year for each individual,” she added.