Labour index can help in making of decisions

LETTERS: Across the globe, the labour market index has been used to analyse and evaluate labour markets.

For example, the Australian Labour Market Conditions (LMC) index provides policymakers and researchers with a comprehensive and comparative analysis of labour market indicators across the economy.

In the United States, the Federal Reserve System assesses the overall health of the economy by analysing the Labour Market Conditions Index (LMCI) and uses this information to inform its monetary policy decisions.

The development of LMCI holds great importance as it provides a comprehensive and reliable overview of the labour market, enhancing investor confidence and attracting new investment.

However, in Malaysia, the labour market index has yet to play a prominent role in charting the health of the labour market.

To implement the LMCI for Malaysia, it is imperative to establish strategic cooperation between stakeholders based on the quadruple helix model, involving academia, industry, government and civil society organisations.

This is essential for ensuring that the index is developed through a collaborative effort, resulting in a more comprehensive, accurate, and representable outcome. Furthermore, the LMCI should not only portray quantifiable indicators but also cover the quality of the labour market such as labour market institutional quality and worker social security.

Finally, the LMCI could inform policy development by identifying the key drivers of competitiveness and suggesting policy interventions that can improve the labour market.

Implementing the LMCI for Malaysia can provide insights and guide policymakers in developing policies and initiatives that can enhance the labour market competitiveness.

Senior lecturer, Department of Economics, School of Business and Economics, Universiti Putra Malaysia