CHAPTER 2 LITERATURE REVIEW

Racial discrimination is defined as any distinction, exclusion, restriction or

preference based on race, color, descent, or ethnic origin which has the purpose of
impairing the recognition, enjoyment or exercise, on an equal footing, of human rights
and fundamental freedoms in the political, economic, social, cultural or any other
field of public life. Racial discrimination often occurs in Malaysia’s labor market.
This is because Malaysia is a country that its population is characterized by a diverse
ethnic composition, which including the three main ethnics which are Malays,
Chinese and Indians.
The problem of discrimination in hiring and promotion is highly contentious,
fuelled by mutual claims of bias, specifically, against non-Malays in the Malay-
controlled public sector and against Malays in the non-Malays and foreign-controlled
private sector. A study conducted on effects of racial discrimination showed that
employees tend to become more stressed and demotivated consequently, they try to
leave the job position and work elsewhere.
Malaysia has an exceptional education system, in which Malays and non-Malays
largely follow separate pathways through school and university, causing the
difference between Malays and non-Malays in writing the resume when they want to
find for a job. There is an evidence of racial discrimination, with non-Malays resumes
far more likely to be called for interview compared to Malay resumes, at a
considerably higher ratio than that found in previous field experimental studies in
other countries. The differential remains after application of this study’s unique
controls for applicant, employer and job advertisement characteristics. Therefore,
there is study shown that race mattered more than resume quality. Malays were found
to be less likely to be called for an interview.
Within-group differentiation, with non-Malays which is Chinese language
proficiency, Chinese language requirement stipulated in job advertisements and
employer profile whether the company is Chinese, foreign or Malay-controlled will
significantly affecting callback probability. Chinese language proficiency improves
callback prospects for both Chinese and Malay applicants, and for engineering jobs,
Malay-controlled companies are less likely than Chinese-controlled companies to
call a Malay applicant for interview. There is 10% of Malay own companies also
hired Chinese that can talk English and Mandarin fluently. Moreover, there are
English companies stated that Malays are poor in English also one of the reasons they
do not want to hire Malays during the recruitment. Therefore, the unemployment rate
of Malays is higher than Chinese, which is 4% or 3.36 million of Malays and only
2.4%, which is 771,000 Chinese in Malaysia. Between 1980 and 1988, Chinese men
have the highest proportion in working as employers, which was 10.2% compared to
1.4% for Malays.
Up the occupational ladder, Malays account for 34% of senior management posts,
while the Chinese constitute 54% and Indians and others make up the rest. In
analyzing employment and earnings, there is study that found that income for
Bumiputera are 32% lower than for Chinese, after controlling for differences in
education, experience, industry, and occupation. Therefore, it proved that is some
form of discrimination against the Bumiputera in the private sector. When non-
Malays owners have the majority of shares, almost 80% of the managers and 90% of
CEOs are Chinese.This means Malays not only faced obstacles in entering the private
labour market, but also encountered discrimination after entry, mainly in the form of
denied advancement and lower earnings.
There is study of earnings inequality in Malaysia using household income survey
data obtained a Chinese premium of 31%, after controlling for other determinants.
Although there are differentiation in academic achievement and other personal
characteristics favoured in labour market interactions will have an impact on labour
market outcomes, the racial discrimination in Malaysia’s labor market is still the main
factor that will affect the labor market in Malaysia.
SOLUTIONS

The first solution to overcome the racial discrimination in labour market is

government should implement policies so that everyone will have equal opportunities
to apply for a job regardless of race. This is because the qualifications and the abilities
of workers should be the requirements that considered by the employers in hiring
them but not based on their races. When the recruitment process is fair, the potential
workers will have the chance to be hire and bring benefits to the firm. Not only when
apply for a job, government should also implement policies so that the employers will
provide the same salary, benefits and bonus for the same positions regardless of race.
When this policy is implemented, the employers will have no way to just bias the
workers which are same race with the employers. In this way, the racial
discrimination in labour market will be reduced.
Next, employers should educate the employees to create the awareness among the
employees to not discriminate against others that are different races with them.
Employers can organize a talk that is about racial discrimination in workplace so that
the employees will have a deeper understanding about the racial discrimination and
the negative impacts if they discriminate against others that are different races with
them. This is because sometimes, a person does not even realize that he or she is
actually discriminating against others that are different races with them. This hurts the
people that get discriminated indirectly. Therefore, this kind of talks can help them to
realize their weaknesses and they can improve themselves to be a better person in
their career lives.
Employers should have the right attitude to treat all the employees fairly and
without bias. This is because the employees are the assets of the employers. When the
employers give the same salary, benefits and bonus for the same positions regardless
of race, the employees will feel they are appreciated and thus will work harder. The
employers should also be fair when there are conflicts between the employees that are
different races so that the feelings of both employees will be taken into account.
Employers should solve the conflicts wisely to reach a win-win situation among the
employees. The employers can also listen to the suggestions of the employees no
matter what races they are. This is because different workers will have different ideas
and this can help to the development of a firm if the employers listen to the ideas of
employees regardless of race and make a best decision on it.
 Moreover, one of the solutions to overcome the racial discrimination in labour
market is the employers should implement a punishment which is whoever is found
out to discriminate against others that are different races with them, their merits will
be deducted in Key Performance Indicator (KPI). KPI is a value that measures the
performance of the employees in a firm. The promotion of the employees will be
affected if they have poor results in their KPI. Therefore, the employees will think
carefully and will not discriminate against others that are different races with them so
that their merits will not be deducted for KPI. Every firm should implement this
system so that the cases of racial discrimination among the labors will be decrease
effectively.
Lastly, the employees themselves should not have the belief of ethnocentrism in
the workplace and even in their lives. Ethnocentrism means the act of judging another
culture based on their own culture. People with ethnocentrism always feel like their
race and cultures are superior to the others. This will cause the racial discrimination in
labour market occurs. When the employees feel like their suggestions are the best and
not willing to listen to the suggestions other races of colleagues, arguments will
happen and the productivity of the firms will be decreased. Therefore, the employees
should learn to respect each other and cooperate with all colleagues to increase the
productivity of the firms. The employees should try to understand each other and get
rid of the belief of ethnocentrism so that the problem of the racial discrimination will
be solved.
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Lee. H.A (2016). Discrimination of High Degrees: Race and Graduate Hiring in
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Lee. H.A (2016). Racial Inequality an Affirmative Action in Malaysia and South
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