Impact of Occupational. Safety and Health Act 1994 Towards Labour Demand by the Manufacturing Sector: A Case Study in Kuala Lumpur and Selangor

Rahmah Ismail, Lum Heap Sum

Abstract


This article analyses the effects of labour market regulation, i.e., the Occupational Safety and Health Act (OSHA) 1994, and all its related regulations, on the demand for labour. The changes that these regulations induce in the technology and costs of production will affect labour demand in the manufacturing sector. The nation s growth in manufacturing output and trade has prompted concern for the effect of economic growth on occupational safety and health at the workplace. Regulatory stringency is expected to increase in Malaysia. Arguments against regulations are often framed in terms of tradeoff between jobs and accident occurrences. The results of this study showed that the introduction of OSHA 1994 has a significant impact on the demand for labour by firms. This study also shows that OSHA 1994 has different impacts on different types of industries in relation to labour demand.


ABSTRAK
Artikel ini menganalisis kesan peraturan pasaran buruh, iaitu Akta Keselamatan dan Kesihatan Pekerja (OSHA) 1994 serta peraturan yang berkait dengannya, terhadap permintaan buruh. Perubahan dalam teknologi dan kos pengeluaran kesan daripada wujudnya peraturan ini akan memberi kesan kepada permintaan buruh sektor pembuatan. Pertumbuhan output dan perdagangan yang dialami oleh sektor pembuatan telah menarik perhatian masyarakat tentang kesan pertumbuhan ekonomi terhadap keselamatan dan kesihatan pekerja di tempat kerja. Dengan itu, peraturan yang berkaitan dengan permasalahan ini dijangk akan meningkat di Malaysia. Hujah yang tidak menyokong peraturan ini selalunya dikaitkan dengan berlakunya perhubungan negatif antara kemalangan dan peluang pekerjaan. Hasil kajian ini menunjukkan pengenalan OSHA 1994 membawa kesan yang signifikan terhadap permintaan buruh oleh firma. Selanjutnya OSHA 1994 juga didapati memberi impak yang berbeza terhadap permintaan buruh bagi industri yang berbeza.


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