HR minister: Lower Malaysian grad wages in 2020 ‘temporary’ due to Covid-19, high-paying jobs to come once economy recovers

Human Resources Minister Datuk Seri M. Saravanan giving his opening speech during the launch of HRDF Placement Centre in Kuala Lumpur Convention Centre April 6, 2021. ― Picture by Hari Anggara
Human Resources Minister Datuk Seri M. Saravanan giving his opening speech during the launch of HRDF Placement Centre in Kuala Lumpur Convention Centre April 6, 2021. ― Picture by Hari Anggara

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KUALA LUMPUR, April 9 — The decrease in fresh graduate salaries in 2020 is “temporary” and caused by the Covid-19 pandemic that forced them to be underemployed, Human Resources Minister Datuk Seri M. Saravanan said today.

Saravanan said the Human Resources Ministry (MOHR) is confident salary levels and jobs matching the skill levels of graduates would increase as the country’s economy stabilises.

“Hence, the MOHR sees the issue of new graduates receiving lower pay in 2020 than in 2019 with some getting lower than the minimum wage, as a temporary situation.

“The government recovery and stimulus packages, coupled with the Covid-19 vaccination plan are expected to contribute to the revival of the economy, the business sector and the employment market,” he said in a statement today.

He said the ministry through its agencies — such as the Social Security Organisation (Socso) and the Human Resources Development Fund — were actively implementing government initiatives to stabilise the labour market and help jobseekers find suitable employment.

The initiatives include PenjanaKerjaya career fairs, hiring and training programmes under PenjanaKerjaya and regular open interviews.

More complying with minimum wage

Saravanan said data from the Socso’s Employment Insurance System (EIS) indicated that more employers have complied with the legal minimum wage in Malaysia.

He cited EIS data that showed a decline in the wage bracket below RM1,000 during the year 2020, along with a 1.2 per cent growth for the wage brackets of RM1,000 to RM2,999, and RM1,000 to RM1,499, and stagnation for the RM3,500 to RM3,999 income range.

In Malaysia, the minimum wage is RM1,100 nationwide, except for areas under 56 city and municipal councils where the minimum wage is RM1,200.

As a whole, EIS data showed that the monthly average of wages in the Malaysian economy in 2020 rose by 4.4 per cent from the average of RM2,519 to RM2,631, he said.

Wages offered in 2020

As for wages employers offered through the national employment portal MYFuture Jobs in 2020, the minister said that 67.3 per cent of job vacancies were within the RM2,000 to RM2,499 range.

Saravanan said only 8.6 per cent or 4,924 of the total vacancies offered on MYFuture Jobs were with monthly wages of below RM1,500, noting however that these are related to pre-career positions including interns and apprentices.

Saravanan also said job placement for graduate-equivalent occupations, namely Professionals, Managers, Executive and Technicians (PMET) jobs improved from 38 per cent in the third quarter of 2020 to 50.2 per cent in the fourth quarter of 2020.

Graduates or those with tertiary education represented 45.5 per cent of total jobseekers in the fourth quarter of 2020. — Picture by Choo Choy May
Graduates or those with tertiary education represented 45.5 per cent of total jobseekers in the fourth quarter of 2020. — Picture by Choo Choy May

He went on to say that the increase of graduate-equivalent jobs in the services and manufacturing sectors was a “good sign” of improvement in Malaysia’s labour market, as these two sectors were the main sources of employment for graduates during the pre-crisis period in 2019.

In the same statement, he said Socso has been directed to analyse and publish insights of the actual 160,000 job placements for jobseekers throughout 2020, including the breakdown of placements for jobseekers with tertiary education.

He also cited EIS statistics as showing that 62.5 per cent or the majority of workers — including graduates — that were hired in the third and fourth quarters of 2020 had received basic wages ranging from RM1,200 to RM1,499 a month.

“Only 8.8 per cent of workers are paid with basic wages below the minimum wage of RM1,200,” he said.

Why Malaysians are accepting RM1,200-RM1,499 jobs

Saravanan said there are three factors for the concentration of wages within the RM1,200 to RM1,499 category, namely stronger demand for non-graduate jobs, location, and cyclical unemployment due to the Covid-19 pandemic.

He noted that graduates or those with tertiary education represented 45.5 per cent of total jobseekers in the fourth quarter of 2020, while the majority or 70 per cent of vacancies offered by employers then were for non-graduate jobs.

“With a shortage of vacancies for graduate occupations, the jobseekers with tertiary education are most likely to opt for the non-graduate jobs such as clerks, sales assistant, admin assistant, customer service and the like as a temporary measure until the economy fully recovers with more job opportunities for PMET category,” he said.

He also said similar jobs in different locations may come with different salary packages, noting as example that salaries offered to graduates in Kelantan tend to be lower than in Selangor.

Noting that unemployment rates in Malaysia rose from 3.3 per cent before the Covid-19 crisis to 4.5 per cent during the crisis period, he said: “Added with declining number of vacancies for graduate jobs in 2020 compared to 2019, many jobseekers are shifting towards non-graduate jobs that offer lower salaries rather than remain unemployed.” 

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