Malaysians Cross Border for Better Pay as Johor-Singapore Zone Aims to Stem Talent Drain

Every day, thousands of Malaysians stream across the Causeway from Johor into Singapore, chasing higher salaries and brighter career prospects in a city-state where the currency is stronger and opportunities often seem more abundant. For many in Johor Baru, the state’s largest city, the lure of Singapore is not just a fleeting temptation but a deeply ingrained aspiration, shaped by years of watching family and friends thrive across the border. Yet, with the recent launch of the Johor-Singapore Special Economic Zone (JS-SEZ), local authorities are banking on a bold initiative to reverse this talent drain by creating high-skilled, better-paying jobs closer to home. The question remains: will it be enough to keep Malaysia’s young workforce from looking abroad?

The Daily Grind Across the Causeway

In Johor Baru, the rising cost of living has intensified the appeal of working in Singapore, where salaries often dwarf those available locally, even for entry-level positions. For many young Malaysians, the decision to cross the border is less a choice and more a necessity, driven by economic realities and familial precedents. The daily commute, though grueling, is seen as a worthwhile sacrifice for a more secure financial future.

Cheng Kai Neng, an 18-year-old student from Johor, exemplifies this mindset. With parents and siblings already working in Singapore—some even securing permanent resident status—his path seems preordained. “I have always planned to work there and eventually get my PR” he says. “The salary here, including the ones promised for the JS-SEZ, is significantly lower compared to that offered in Singapore.” For Kai Neng, the disparity is stark: even years ago, his father earned over S$2,000 with just a diploma, a figure that translates to roughly RM6,800 (~US$1,450) at current exchange rates, far exceeding local starting salaries.

Similarly, 19-year-old Ameer Mirza Noreswandi, who is pursuing a degree in electronics, acknowledges the appeal of staying in Johor but remains skeptical about local opportunities. “I would be happy to work here and not travel back and forth across the Causeway every day, but it is a sacrifice I am willing to make for a more secure future” he explains. Ameer plans to weigh his options over the next few years, hoping for an influx of multinational companies that might offer competitive pay. If not, Singapore remains the obvious option.

The sentiment is echoed by others, including J. Thenmalar, a 19-year-old graphic design student from Negri Sembilan studying in Johor. She notes the high cost of living in Johor Baru as a significant barrier, suggesting that even the opportunities promised by the JS-SEZ might not suffice. “The cost of living here is high, and I don’t think the salary offered will be enough to manage that” she says. For fresh graduate Melvin Low Rui Yi, 24, from Pahang, the decision hinges on securing a decent salary in Johor. Without it, he too looks toward Singapore or a return to his hometown where expenses are more manageable.

A New Economic Frontier: The JS-SEZ

Amid this exodus, the Johor-Singapore Special Economic Zone emerges as a potential game-changer. Spanning 3,505 square kilometers, the JS-SEZ is a collaborative initiative between Malaysia and Singapore aimed at boosting investment and economic integration. Covering key areas like Johor Baru, Sedenak Tech Park in Kulai, Forest City, Tanjung Pelepas, and Pengerang, the zone promises streamlined immigration processes—potentially passport-free—and enhanced rail connectivity between Johor and the city-state. Target sectors include manufacturing, logistics, digital industries, healthcare, and education, all of which are intended to create high-value jobs.

In May 2025, Johor Mentri Besar Datuk Onn Hafiz Ghazi announced that several investors had committed to offering starting salaries of at least RM3,500 (~US$750) to local workers under the JS-SEZ framework. While this figure is a step up from typical entry-level pay in Johor, it still pales in comparison to Singapore’s offerings, where even basic roles can command significantly higher wages. The state government, however, sees this as a starting point to attract and retain talent, hoping to build a robust economic ecosystem that rivals the pull of its neighbor.

Academics and educators in Johor are cautiously optimistic about the zone’s long-term impact. Associate Professor Dr. Mazlan Ali from Universiti Teknologi Malaysia (UTM) believes the JS-SEZ could eventually help stem the talent outflow. “Although salaries in Singapore are higher, I believe RM3,500 to RM4,000 is a relatively decent starting salary for fresh graduates, especially since they have yet to gain any working experience” he notes. Dr. Ali suggests that the ability of companies within the zone to offer such salaries, particularly in certain sectors, could gradually shift perceptions among young job seekers.

Financial Burdens and Systemic Challenges

Yet, for many in Johor, particularly those from lower-income backgrounds, the immediate financial pressures outweigh long-term promises. Siti Suraya Hani Mohd Juar, an English instructor at the Manpower Department (JTM) Advanced Technology Training Centre (Adtec) in Senai, highlights the predicament of her students, many of whom belong to the B40 category—Malaysia’s bottom 40% income bracket. “Most of our students come from the B40 category and have a lot of financial burdens to shoulder right after graduating” she explains. “For them, getting a high-paying job is not a matter of choice but of necessity.”

Siti Suraya points out that the escalating cost of living in Johor further tilts the balance toward Singapore. Even for students in Technical and Vocational Education and Training (TVET) programs, local salaries remain discouragingly low, especially for those with only certificate-level qualifications. “In Singapore, even if they take up menial jobs, their pay is significantly higher” she adds. The extra income often justifies the hassle of cross-border commuting, despite the time and energy it demands.

Beyond financial considerations, systemic issues in Malaysia’s education and employment landscape also fuel the talent drain. Kai Neng, a high-achieving student with 9As in his Sijil Pelajaran Malaysia (SPM) exams, expresses frustration at being unable to secure a place in local matriculation programs or public universities. “I am disappointed as I have worked really hard yet still fell short, and I am not the only one feeling this way” he says. This disillusionment drives many young Malaysians to seek better opportunities abroad, where they believe their efforts will be more readily rewarded.

Competing with Singapore’s Pull

The JS-SEZ represents a strategic effort to address these challenges, but it faces an uphill battle against Singapore’s entrenched allure. For young Malaysians like Kai Neng, policy interventions such as state-sponsored scholarships tied to working in Johor for a set period could make a difference. “If the state provides more scholarships that require recipients to work in Johor for a certain number of years, then maybe I will stay” he suggests. Such initiatives might not only retain talent but also foster a sense of loyalty and optimism about local prospects.

However, the salary gap remains a formidable obstacle. Even the “premium” salaries touted under the JS-SEZ framework fall short of what many can earn in Singapore, where starting pay often exceeds RM6,000 (~US$1,280) even for less skilled roles. This disparity is particularly pronounced for TVET graduates and those without advanced degrees, for whom Singapore offers a quicker path to financial stability. As Ameer notes, unless local jobs can offer pay “close to what I can earn in Singapore” the incentive to stay diminishes.

A Broader Economic Context

The talent migration from Johor to Singapore is emblematic of broader economic disparities within Southeast Asia, where proximity to wealthier neighbors often exacerbates brain drain in less affluent regions. Singapore, with its robust economy and high living standards, has long served as a magnet for workers from Malaysia, Indonesia, and beyond. For Malaysia, retaining its skilled workforce is critical not only for economic growth but also for maintaining social cohesion, as prolonged talent outflows can strain local communities and widen inequality.

The JS-SEZ, while ambitious, is not without precedent. Similar cross-border economic zones, such as those between Thailand and Malaysia or Indonesia and Singapore, have yielded mixed results, often struggling to compete with the established advantages of more developed partners. Johor’s initiative benefits from its geographic proximity to Singapore and the city-state’s interest in fostering regional cooperation, but success will hinge on sustained investment, policy innovation, and tangible improvements in local wages and living conditions.

Looking Ahead: Can Johor Turn the Tide?

As the JS-SEZ takes shape, its ability to transform Johor into a viable alternative to Singapore remains uncertain. For now, the daily exodus across the Causeway continues, driven by immediate economic imperatives and long-standing aspirations. Young Malaysians like Kai Neng, Ameer, and Thenmalar are keeping their options open, but their default inclination leans toward the city-state, where financial rewards seem more assured.

For Johor’s policymakers, the challenge is twofold: to attract the kind of high-value investments that can create competitive jobs and to address systemic barriers—such as access to education and affordable living—that push talent away. If successful, the JS-SEZ could redefine Johor’s economic landscape, offering a blueprint for other regions grappling with similar outflows. If not, the state risks losing another generation to its more prosperous neighbor, a trend that could have lasting implications for Malaysia’s future.

As reforms and investments unfold, the impact of the JS-SEZ on Johor’s talent retention remains an open question, one that will shape the state’s economic trajectory for years to come.