General Things We Should know About Economics
Economics is a social science that studies the behavior of human
being reacting to a particular constrains to fulfill the individual desires
(Ow, 2012). It is also defined as the science of choice. There are two
different types of economics: microeconomics which focuses on the decision
making behavior of an individual market or industry; macroeconomics is the
study of the overall performance of an economy for a certain area.
Demand and supply is one of the most basic economic concepts. It
shows us how the relationship between consumers and producers works (Sloman,
2008). Demand is the requirement or desire of consumer of a certain quantity of
goods while supply is known by economist as the quantity producers are able to
provide to the consumers. This relationship has shape the foundation of the
economy.
The Shortage of Housemaids Stirs a Buzz in the Malaysia
The Demand of Supply of Full Time Housemaids Affect the economy of both Malaysia
Housemaids are a
common practice in most countries in Asia which includes Hong Kong, Brunei,
Thailand, Malaysia, Singapore and many more. According to Farlex (2013), housemaids
by online definitions are females who are employed to do house works. Since
2009, the demand of housemaids in Malaysia has increase drastically until the
local number of housemaids was not enough to satisfy the overwhelming demand
(Au, 2012). Therefore, a few government departments as well as many private agencies
were established to resolve this matter. The general solution was to bring in
foreign housemaids from places such as Indonesia, Cambodia, Myanmar and
Philippines. Now let’s analyze on how did the whole economy reacts to the
situation of the shortage of housemaids.
The shortage of
local housemaids can be seen in the graph below.
The graph above
shows there is high in quantity demanded for housemaids, Q1, but low in quantity supplied, Q2. Therefore creating a shortage of supply
where the price remains the same as the difference between the quantities
supplied is less than the quantity demanded. The price is less than the
equilibrium price where the demand curve intersects the supply curve. This is
due to the market price
The following
shows the process or how does the shortage occur through certain time period:
As the demand
increase whereas the price remains the same, the demand curve shift to right.
According to the graph, curve D1 shifted
to D2 while
the S curve
representing the supply curve remain unchanged. The price of house maids remain
unchanged creating a shortage in quantity of supply where the difference Q1 and Q2 represents.
To evaluate the
cause of shortage of housemaids, the demand must first be observed. The main clients
of housemaids or people who are paying for housemaids are parents with full
time job that desire house to be well manage and their children to be taken
care off. Why do parents in Asian countries now days require a full time job? This
is because to the blooming economy, for example Malaysia and Singapore,
requires them to support the increase in standard of living with equivalent
income. Other situations such as many adults with old folks at home would also
hire housemaids to take care of their parents for them as they need to work. As
people nowadays are more educated, the number of non-working parents has
decrease in the pass 2 decades. Generally speaking, as living standards
increases, the more and more working parents hit the market to work for more
income to support their lifestyles.
When shortage of
housemaids occurs, the productivity of a certain household decrease as there is
limited options to resolve everyday problems. Most modern day parents are
working either part-time or full-time to provide income for their families.
Housemaids are the main solutions to everyday chores and responsibilities.
Thus, this also causes the overall production or efficiency of country decrease.
Although
Malaysian government establish policies and laws to prevent the outflow of
money to other countries, but the situation does not permit a strict enforcement.
To work out the shortage situation, the government approves licenses for
foreign maids to be brought in to cater to the demand of consumers. Housemaids
from other countries such as Cambodia, Myanmar, Indonesia and Philippines are
supplied to cater to the ‘addiction’ to maids in Malaysia. The government agencies
as well as private sectors also see this shortage as a problem that need to be
solved immediately. The number of day care centre and nurseries has increase
drastically over the years also in areas such as Kuala Lumpur. According to the
Department of Social Welfare (2013), the total number of day care centre and
nurseries in Kuala Lumpur are 37 which show that a small area of containing
such a large number of services. Other than that, the freelance part-time local
housemaids have also become another alternative and also solution for a
household that requires helpers to manage their house work.Effects when Quantity Demanded is Fulfill
On the other
hand, some social issues arise will still arise after the demand is fulfill. With
housemaids taking care of their children, parents will be detached from their
own kids (Wellsphere, 2008). As the times their child spends with them are less
than the time spending with the maids, the children eventually becomes more
attached to the maids. This has become a common and ever growing social issue
that most household take lightly of. As detachments of parents with their own
kids worsen, it often results into rebellious situation where children are not
obedient to their parents. In addition, their parents might also unable to
understand or relate to their child emotionally. Looking at the countries point
of view, the increase in foreign workers in local market will contribute to the
outflow of money from country. Because when the owners pay the maids their
salary, more than often the money is sent back to their home country rather
than spent on them. Furthermore, cases such as runaway maids and maid mistreating
children increases will increase. This shows that other problem still arise
although demand has been fulfill.
The increase of housemaids does still bring benefit to the household and the country itself. In terms of household, more parents are surely able to work outside not distracted by day to day chores at home. Parents with children are able to know that their child is well taken care of. These also leads to the productivity of country continue increasing as more labors are available in the workforce. This situation contributes to the blooming economy in the country. Thus enabling the increase of living standards as income of a family rises together.
The Constant Effects of Scarcity and Opportunity Cost
The following
graphs show the difference equilibrium price and quantity between the years:
Note:
S = Supply curve
D = Demand curve
E = Equilibrium point
Ep = Equilibrium price
Ep = Equilibrium quantity
The numbers stands for the year. Eg: 1 = year 1
Both graphs show the increase in quantity demanded and
supply and the difference in equilibrium price and quantity. According to the
graphs, the difference between increases of equilibrium price of year 1 to year
2 is less than the increase of equilibrium quantity of year 1 to year 2. Same
scenario goes to the year 3 and year 4. This shows as time progresses, the
shortage is solved by adding more quantity supplied to quantity demanded.
However, the price of housemaids will slowly increase as quantity supply is
always not able to react fast enough to the quantity demanded.
As time progresses, the amount of supply of foreign
maids slowly becomes in sufficient to cater to the demand of the consumers or
clients (Fernandez, 2013). The concept of scarcity can be seen through that
situation. Scarcities as define by Investopedia (2013) as limited resources but
not a lack of riches, individuals are required to make choices between
different items to fulfill their unlimited wants or desire. The demand for
housemaids in Malaysia has increase to a certain amount where foreign workers
are flooding the populations. This also resulted
into the dependence or also known as ‘addiction’ to housemaids in countries
like Malaysia (AFP, 2011).
Other interesting link:
The concept of opportunity cost also appears as the
price to hire a maid has increase but still considered reasonable to the
consumers as they see more benefit to hiring maids then having none. In-terms
of the foreign maids penetrating the local market, the locals maid are seem to
be losing out their jobs as the foreign maids are considered more cheaper and
trustworthy due to the effects of limited supply of local maid the react to the
constant and never ending demand of the local marketplace.
Long-term Solution for the Shortage of Housemaids
The increase of foreign housemaids is surely a
short-term plan to increase the economy of Malaysia nevertheless long term
issues society issues must be solve. Local companies should provide more
flexible working hours for mothers or female workers as well as male workers to
engage in family issues. Working at home would definitely be a better option as
it provides an opportunity for parents to spend more time with their children
as well as getting the job done. This is feasible now days as technology
advances to a certain degree where everyone is connect by the internet. Works
can be done easily online, in fact even more efficiently. The government should
also keep in check the number of maids per household as well as the number of
foreign housemaids entering Malaysia. This is to limit the money outflow from
the country. Hence, the short-term plan must be replaced with long-term
solutions.Latest Housemaids Shortage Crisis Hits Malaysia
The never-ending increase local demand of housemaids
has cause the Indonesian government to halt its supply of labors into Malaysia.
This is because of multiple cases of mistreated maids that raise concern upon
the foreign government (Yow, 2012). The households in Malaysia might be force
to find alternatives for cheap household helpers. Although proposals have been
given to solve the issue but the shortage will still increase for the coming
few months before a solution or deal is confirm (Alhadjri, 2013).
References
AFP. (2011) Malaysia's maid crunch hits households. Asia
One News [Online]. 25 January. Available from: http://www.asiaone.com/News/AsiaOne%2BNews/Malaysia/Story/A1Story20110125-260178.html [Accessed
3 June 2013].
Alhadjri, A. (2013) Concern
over 'live-out' maid proposal. The Sun Daily [Online]. 4 June.
Available from: http://www.thesundaily.my/news/732612 [Accessed
5 June 2013].
Au,
E. (2012) Costly Filipino maids in demand. New Straits Times [Online].
31 March. Available from: http://www.asiaone.com/News/AsiaOne%2BNews/Malaysia/Story/A1Story20120331-336910.html [Accessed
4 June 2013].
Department
of Social Welfare. (2013) Laman Web Rasmi: Jabatan Kebajikan Masyarakat.
Available from http://www.jkm.gov.my/index.php?option=com_content&view=article&id=162&... [Accessed
2 June 2013].
Farlex.
(2013) The Free Dictionary. Available from: http://www.thefreedictionary.com/housemaid [Accessed
4 June 2013].
Fernandez, C. (2013) Cost
structure for hiring Indonesian maids still controversial. FMT News:
Free and Independent [Online]. Available from: https://www.freemalaysiatoday.com/category/business/2013/02/13/cost-structure-for-hiring-indonesian-maids-still-controversial/ [Accessed
3 June 2013].
Ow, W. (2012) Introduction To Economics, PPF & Economic Systems [lecture to Principle of Economics foundation
semester 1] Taylor’s University. 31 January.
Sloman,
J. (2008) Economics and The Business Environment. 2nd ed.
Edinburgh Gate: Pearson Education Limited.
Wellsphere. (2008) Wellsphere: Health Knowledge Made
Personal. Available from: http://www.wellsphere.com/parenting-article/children-attached-to-maid/137890 [Accessed
5 June 2013]
Yow, H, C. (2012) Subramaniam: Malaysians Must Prepare
For Life without Maids. The Malaysian Insider [Online]. 21 March. Available
from: http://www.themalaysianinsider.com/malaysia/article/subramaniam-malaysians-must-prepare-for-life-without-maids/ [Accessed
5 June 2013].
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