Cooperatives as a possible solution for 3D jobs

LETTER | Issues such as labour rights and minimum wage tend to draw attention during Labour Day and recently Prime Minister Dr Mahathir Mohamad urged Malaysians to take up 3D (Dirty, Dangerous and Difficult) jobs even though they are low-paying, instead of having foreign workers taking up such jobs. While he argued that it is better than being jobless, the MTUC rebuked his statement for giving the wrong message that slave labour and sweatshop conditions were acceptable and that employers are justified to give low salaries. 

I, too, find Mahathir’s statement questionable for there are Malaysians taking up 3D jobs abroad such as in Singapore and Australia. It is estimated that over half of the foreign workers in Malaysia are illegal or undocumented (it is “cost-saving” for employers to employ them), living in hostels in dilapidated conditions with poor hygiene and exposed to fire hazards. Not to mention that many foreign workers are victims of human trafficking.

Nevertheless, I am here to offer a different and often neglected perspective on what can be done to help working-class people, which is cooperative (co-op). A cooperative is a democratic model of enterprise where members who invest in it have equal voting rights, unlike a typical business or company where only the owners or shareholders have a say in managing the business or company. However, cooperatives have been largely ignored in our society, only contributing to five percent of the gross domestic product (GDP) of Malaysia. It is probably unknown to most Malaysians that Bank Rakyat is actually a cooperative bank.

As argued above, slave labour and sweatshop conditions (including hazardous hostels) are a problem such as in the construction sector. However, employers may argue that if they must pay higher wages to their workers and provide a decent hostel for their foreign workers, they will be burdened with additional costs which may force them out of business, resulting in their workers losing their jobs. We do not know if their argument is valid, or it is merely their excuse to maximise their profits. 

Anyway, if raising the minimum wage to protect the working and living conditions of workers would indeed see construction companies closing down, we shall look into having cooperatives fill the gap. After all, there are construction cooperatives in other countries, in fact, cooperatives may be capable of venturing into various sectors just like any other company or business.

By having cooperatives to run the construction business, I believe that slave labour and sweatshop conditions are far less likely to happen as stakeholders of the cooperatives are very likely to oppose such inhuman conditions, especially if it is a worker cooperative where workers are members of the cooperative. Even if a construction cooperative does hire foreign workers, I believe that the local stakeholders would not want foreign workers to work and live in demeaning and hazardous conditions.

We should indeed support the government’s initiatives to develop the cooperative sector (which is under the Ministry of Entrepreneurship Development) while urging the government to amend laws or policies hindering cooperatives from unleashing their full potential. In fact, a cooperative may eventually develop into a multinational enterprise, such as Fonterra which owns famous dairy brands such as Fernleaf, Anlene and Anmum. As a start, apart from construction cooperatives, I believe that cooperatives may venture into the renewable energy industry as the Ministry of Energy, Science, Technology, Environment and Climate Change is working towards achieving 20 percent renewable energy by 2025.

Research by Virginie Perotin of Leeds University Business School on worker cooperatives in Western Europe, the US and Latin America showed that workers were more productive when compared to their counterparts in conventional businesses. This is because the workers were given a direct stake in managing production and at the same time reaping social benefits of worker autonomy. Other than that, co-ops may avoid frictions between bosses and staff, such as misunderstandings, disputing decisions or resisting unfair work burdens. 

Perotin also argued that co-ops are generally more adept at preserving jobs while planning longer-term adjustments to the firm’s operations, such as slowing down expansion to maintain current assets, unlike traditional corporations that may pay less attention to strategic planning and simply cut jobs to cut costs. In "The co-operative economy 2015"  by Co-operatives UK, it was said that cooperatives are twice more likely than other business ownership models to survive their first five years.

The cooperative sector is indeed something to be given more attention by policymakers and the people, in order to reach the government’s target of contributing towards 10 percent of the GDP, at the same time benefiting the bottom 40 percent income group (B40). It is noted that a few political parties in Malaysia have set up co-ops, such as Umno setting up Koperasi Usaha Bersatu Malaysia Berhad (now KUB Malaysia Berhad), MCA setting up Koperasi Serbaguna Malaysia Berhad (KSM) and Koperasi Jayadiri Malaysia Berhad (Kojadi), as well as PAS setting up Koperasi Al-Hilal Berhad (Kohilal). 

On the other hand, while Rafizi Ramli was contesting for deputy president of PKR, he proposed establishing a co-op for fellow party members and despite his eventual defeat to incumbent Azmin Ali, he carried on with his effort which he proposed to name the co-op as Koperasi Inisiatif Rakyat (Kira).

While I am no expert in co-ops, I believe that it is a possible way of addressing the woes of 3D jobs, therefore should be given a try. If Malaysians benefit from 3D jobs provided by co-ops, it will reduce our reliance on foreign workers, especially the undocumented ones.

At the same time, co-ops should recruit members ethically and not entice new members by promising unreasonably high returns of investment. There should also be transparency in management, in order not to repeat co-op scandals such as in the 1980s where many ethnic Chinese lost their money in in MCA-linked co-ops which resulted in seven co-op members committing suicide. There was also the Kohilal scandal where RM45 million went “missing”.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.