JOHOR BAHRU: The Rapid Transit System Link (RTS Link) from here to Singapore is expected to be a boon for Malaysia’s southernmost city when it is completed in 2026.
Businesses in Johor expect it to pave the way for more investments as well as to boost tourist arrivals from Singapore.
However, the easier commute afforded by the RTS Link could also see an exodus of workers to Singapore for higher salaries, technology service provider Medhini Group CEO Joel William warned.
He said people from others states in Malaysia would flock to Johor with a view to getting a job in Singapore where compensation may be three to four times higher.
However, he said, they are more likely to reside in Johor Bahru.
“While this could bring economic benefits to the city, leading to improved quality of life there, it could also lead to an upturn in the property market,” he said.
The RTS Link will have the capacity to ferry up to 10,000 passengers per hour each way, giving it a ridership of up to 195 million a year.
The estimated travel time between the Bukit Chagar station in Johor Bahru and Woodlands in Singapore is six minutes, and the frequency of the trains is estimated to be 3.5 minutes during peak hours.
William said the quick commute would be very attractive for white-collar workers given that the connectivity to a fixed office location in Singapore via its mass rapid transit system is already well established.
He said this has also led foreign investors to split their investments between Singapore and Malaysia.
“The investors are setting up their headquarters and R&D centres in Singapore but they locate their back-end manufacturing facilities in Johor,” he said.
He said this arrangement would see employees hired in Singapore and Johor travelling between offices on both sides of the Johor Straits. “For them the RTS Link will be very useful.”
William said Singapore would benefit from an influx of Malaysians to fill executive and management-level positions while Johor could benefit from expertise from Singapore.
“Experts who have been hired in Singapore are likely to travel (on the RTS Link) to work in Malaysia,” he said.
Impact on labour cost
He said that while some experts expect to see a reduction of foreign workers in the manufacturing sector, migrant labour would still be essential in sectors such as construction and agriculture.
“Employment (of foreign workers) in these areas will continue to rise,” he said.
However, he said, a significant gap in labour cost between Malaysia and other countries in the Asia-Pacific remains.
This, he said, came across clearly in recent discussions with a potential investor who eventually chose to build its labour-intensive manufacturing plant in Vietnam rather than Malaysia.
In light of this development, he said, it is now crucial that Johor positions itself as a high-tech manufacturing hub and prioritise efforts to attract skilled workers.
William feels that in time, the cost of living in Johor and salaries would gradually normalise to about two-thirds of that in Singapore.
“This will encourage executives who now work in Singapore to consider returning to Johor even if it means a small salary cut in exchange for a better quality of life, which includes more personal and family time and space,” hesaid.
A sign that JB employers must revise wages
A hospitality industry executive, Prema Athiseesan, believes the RTS Link will make the job market in Johor more competitive and that will force employers to introduce progressive wage structures and packages.
Prema, who is associate director of human resource at the Amari Hotel in Johor Bahru, said the easier commute on the RTS Link could lead to a boom in the hospitality sector in Johor.
However, she said it would not be enough to woo Malaysians back from Singapore to work in the local hospitality sector given that compensation would still be lower than across the causeway.
Hence, she said, it is incumbent upon employers to compensate workers adequately for their contributions in giving the best to their hotel guests.
“I see the RTS Link as a push for employers (in Johor) to offer better salary packages,” she said.
Prema said raising wages will also attract locals to work in Johor Bahru.
“The government should introduce incentives for employers to hire locals or the RTS Link will drain our human resources badly,” she said.