During the last decade the Malaysian labor force has grown rapidly, due to robust economic growth and the large proportion of young people born in the 1970s. In 1999, the Malaysian labor force was 9.3 million people, with an unemployment rate of 3 percent, or around 270,000. Due to rapid expansion of all sectors of the national economy, there has been a high demand for all types of workers, especially skilled labor in the manufacturing sector and well-trained professionals in the services sector. This led in turn to better wages and rapidly improving working conditions.
The Malaysian government is trying to develop better education at all levels, as it wants to attract skill-intensive industries and services to the country. Primary education is compulsory, and young people may choose between a large number of both public and private schools and colleges. There is an established system of vocational and technical training. A number of Malaysians receive their education overseas, many of them with state support, although during 1997 and 1998, many students returned home. The most popular destinations for overseas education are the United States, England, Canada, and Australia. However, even the rapidly growing numbers of educated and trained Malaysians cannot meet market demand. In the late 1990s, Malaysia experienced shortages of medical doctors, information technology specialists, and professionals in various other areas. In order to meet growing demand of university-trained professionals, in 1994 Malaysia allowed foreign universities to establish campuses in the country.
The higher wages and better working conditions attract large numbers of temporary workers from neighboring Indonesia, Bangladesh, Thailand, and the Philippines. Many of them are hired to work in the low-skill and low-wage construction and service sectors and on agricultural plantations. However, Malaysia has also experienced an inflow of illegal foreign workers, prompting the government to implement harsh detention measures and mass deportation of unauthorized arrivals. Malaysian law does not allow foreign workers to join trade unions. The working conditions of illegal workers are generally inferior to those enjoyed by legally contracted workers. However, labor contractors may be prosecuted if workers complain about abuses or other problems.
The first trade unions appeared in Malaysia before World War II. There are currently 544 trade unions in Malaysia, engaging in the union activities of just over 11 percent of the workforce. Most of the private-sector trade unions are members of the Malaysian Trade Union Congress (MTUC), which was established in 1951. Around 90 unions of public-and civil-sector employees are members of the Congress of Unions of Employees in the Public and Civil Services (CUEPACS). Unions maintain their independence from the government and from political parties; by law, union officers may not hold principal positions in political organizations. However, some individual trade union leaders have been elected to the parliament, and the leader of MTUC joined the ruling party in 1997. The Malaysian Trade Union Act guarantees the right to form or participate in trade union activities, but it restricts the right to strike, calling for "socially responsible behavior." Strikes are extremely rare in Malaysia for several reasons, including strong demand in the labor market and the government's promotion of "industrial harmony." In case of labor disputes, the Ministry of Human Resources may intervene in conciliation procedures; in extreme cases, disputants may refer their case to the Industrial Court. The Industrial Relations Act prohibits employers from taking actions against workers for participating in lawful trade-union activities. There is no national minimum wage, although there have been calls recently from trade unions for its introduction. The Employment Act of 1955 established a maximum 48-hour working week.
The Malaysian Constitution prohibits forced and bonded labor by children, and the government claims that it rigorously enforces child-labor provisions. However, the International Confederation of Free Trade Unions estimates that 75,000 children are engaged as laborers. Faced with the shortages in the workforce, the Malaysian government encourages women to work, providing various initiatives. Currently, more than 35 percent of the labor force are women. However, unionization among women is generally lower than among men.