Johor gains when its people find work in Singapore, say economists

PETALING JAYA: Johor should enjoy the many benefits of its people working in Singapore rather than discourage them from finding employment in the republic, economists said.

They pointed out that Singapore’s strong currency and higher wages there could be a boost for Johor’s economy and its better work culture could rub off on Johoreans.

They add that some degree of cross-border work was also healthy, disputing the view that there is a need to keep Johoreans in the state to curb brain drain.

Tan Peck Leong, economic development professor at the Arshad Ayub Graduate Business School, noted that many Johoreans who work in Singapore continue to reside in their own state.

“(This means) the money they earn in the republic will mostly be spent in Johor. Given the strength of the Singapore dollar, this will also boost the purchasing power in Johor,” he told FMT.

“This will lead to a spillover effect on the various domestic economic sectors,” he added.

The practice of Johoreans seeking employment in Singapore is one of many issues raised in the ongoing campaign for this weekend’s state election.

Pakatan Harapan candidate for Skudai Kartiyaini Jeyapalan said the wage disparity with Singaore is driving young workers to the republic.

She said it would be difficult to retain talent in the state if these concerns are not addressed.

Tan said that apart from the economic gains, these cross-border workers could also bring home some benefits through “brain circulation”.

“They can bring back the better work ethics, cultures and ideas from Singapore. That will improve the quality of the southern state’s workforce for the long-term,” he said.

“Many Malaysians who work in Singapore bring back stronger work discipline, punctuality, productivity standards, customer-service culture, technical skills and professional networks.

“Therefore, Johor should not just worry about retaining workers. Instead, it should try to capture the values these workers can acquire across the border,” he added.

Data from the statistics department shows that Johoreans accounted for 38% of Malaysians working in Singapore, while 39% of Malaysians who work there are skilled workers and 35% are semi-skilled.

Tan said the experience these workers gain in Singapore could be harnessed through local mentorship programmes where they could train young entrepreneurs or workers, or even through schemes encouraging them to invest in small businesses.

Mutual benefit

Barjoyai Bardai of Malaysia University of Science and Technology said Johor should look to complement Singapore instead of competing with it.

He said that while the island-state excelled in finance, headquarters functions, advanced business service and global connectivity, Johor had its own advantages.

This includes its abundant land area, lower operating costs, manufacturing capacity, logistics, larger labour force and renewable energy potential.

“The goal should be to position Johor as Singapore’s preferred expansion corridor rather than its competitor. This creates a ‘twin economy’ model, where both sides become stronger together,” he said, adding that the Johor-Singapore Special Economic Zone (JS-SEZ) was crucial for this.

Echoing Barjoyai’s view, Tan said the special economic zone would enable Johor to become a regional base for healthcare support, education, engineering, digital business and professional support services.

Barjoyai said the focus should be on creating economic value by pivoting towards the more advanced manufacturing and digital sectors through heavy investments in technical education.

He said a high-value economy that complements with Singapore’s would lead to better-paying jobs and stronger career opportunities, making employment in Johor a genuinely good option for locals.

It’s not just about jobs and pay

Tan is also of the view that beyond better jobs and higher salaries, there is also a need for Johor to develop its infrastructure and improve quality of life for its people.

He said Iskandar Puteri and its surrounding areas could be developed with more affordable housing for the middle-income group.

“Infrastructure — such as public transport, schools, clinics and community spaces — is also essential,” he said.

“Johor can serve as the preferred place of residence for Malaysians who work in Singapore but want to build a life in Malaysia.

“This would enable Johoreans to capture more of their income through cheaper housing, consumption, services, and education, with money left for local investment,” he added.

Touching on the same matter, Barjoyai said skilled professionals were already increasingly opting to be based in locations with good public transport, healthcare, education and overall quality of life.

Raising wages sustainably

Yeah Kim Leng of Sunway University said attracting high-value investment alone would not narrow the wage gap unless accompanied by stronger workforce development and policies that ensured local companies benefitted from these investments.

He said companies receiving incentives related to the JS-SEZ should be encouraged to develop local suppliers, invest in workforce training and generate wider economic spillovers.

Yeah warned that rising property prices and living costs in Johor Bahru and Iskandar Puteri, driven partly by investment inflows, could erode wage gains if workers found themselves priced out of the local property market.

“The greatest risk to the JS-SEZ is not failure but success arriving too quickly for infrastructure and labour markets to handle,” he added.