IDEAS home Printed from https://ideas.repec.org/a/aac/ijirss/v8y2025i2p4308-4321id6304.html
   My bibliography  Save this article

Foreign labor dynamics in Malaysia’s construction industry: Policy impacts and economic consequences

Author

Listed:
  • Mohd Nasir Saari
  • Md Shukri Shuib
  • Mohd Na’eim bin Ajis

Abstract

The Malaysian construction sector’s reliance on foreign labor, especially in “3D” roles—dirty, dangerous, and difficult—has presented both economic advantages and socio-political challenges. This study investigates the impacts of Malaysia's foreign worker policies on the construction industry, exploring dependency patterns, policy effectiveness, and implications for workforce localization. Utilizing a qualitative approach, the research incorporates in-depth interviews with policymakers, construction managers, and labor union representatives, supported by document analysis of policy records and labor statistics. Findings indicate that foreign workers comprise 70–80% of the workforce, driven by local reluctance towards lower-wage, physically demanding positions. The analysis reveals that inconsistent policy enforcement and the COVID-19 pandemic have destabilized labor supply, heightened employer concerns, and underscored the socio-economic risks of foreign worker dependency, including wage suppression and limited skill transfer to local workers. The study recommends a tiered levy system and workforce development incentives as strategic solutions to balance immediate labor demands with sustainable localization goals. By addressing workforce challenges and leveraging policy insights, this research contributes to the discourse on sustainable labor management in developing economies heavily reliant on foreign workers.

Suggested Citation

  • Mohd Nasir Saari & Md Shukri Shuib & Mohd Na’eim bin Ajis, 2025. "Foreign labor dynamics in Malaysia’s construction industry: Policy impacts and economic consequences," International Journal of Innovative Research and Scientific Studies, Innovative Research Publishing, vol. 8(2), pages 4308-4321.
  • Handle: RePEc:aac:ijirss:v:8:y:2025:i:2:p:4308-4321:id:6304
    as

    Download full text from publisher

    File URL: https://ijirss.com/index.php/ijirss/article/view/6304/1198
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aac:ijirss:v:8:y:2025:i:2:p:4308-4321:id:6304. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalie Jean (email available below). General contact details of provider: https://ijirss.com/index.php/ijirss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.