For at least a decade, monthly wage as low as RM1,000 the norm for Malaysian fresh grads

Office workers are pictured during lunchtime in Kuala Lumpur June 5, 2020. — Picture by Choo Choy May
Office workers are pictured during lunchtime in Kuala Lumpur June 5, 2020. — Picture by Choo Choy May

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KUALA LUMPUR, April 14 — At least 10 per cent of Malaysian graduates with Bachelor’s degrees have been getting a monthly income of just between RM1,001 to RM1,500 since at least 2010, data from Ministry of Higher Education (MoHE) surveys show.

Furthermore last year, more graduates fell into this income bracket compared to others, with the proportion of those earning between those amounts reaching a decade-high value of 22.3 per cent.

Amid economic and employment uncertainties brought on by Covid-19, Malay Mail went over this data for a close look at how Malaysians who graduated with their first degrees have been faring in terms of income since 2010, and how many of them earn more than the minimum wage.

Among other things, the MoHE annual surveys trace the monthly income of those who graduated with their first degrees, including those who earn as little as below RM500 or below RM1,000 every month and those who earn more than RM5,000 per month.

(Such data may however include those who had been working before they furthered their studies).

In 2020, the slice of those earning RM1,001-RM1,500 grew to be biggest

Looking at just the RM1,001 to RM1,500 category, it shot up to its highest-ever level in a roughly 10-year period with 22.3 per cent of 71,108 degree graduates telling the survey that they had such a monthly income.

In short, the proportion of those who earn as low as RM1,001 grew by half compared to 10 years ago.

However, the percentage of graduates in the bracket has fluctuated slightly over the years.

Before this, the percentage of degree graduates with monthly income levels of RM1,001 to RM1,500 steadily hovered above 14 per cent (2010, 2011) and above 13 per cent (2012, 2013), climbing to 15.1 per cent (2014), then dipping to 10.6 per cent (2015), before climbing again in the past few years to 15.9 per cent (2017) and 18.2 per cent (2019).

(For the year 2018, the MoHE survey report does not have data for this category, and instead only made available data for the RM1,001-RM2,000 category. )

 

 

Not only that, there are more earning RM1,001 to RM1,500 than ever

Over the same period, there is a rising trend in both the proportion and the actual number of graduates earning in that income bracket, reaching its peak in 2020.

In comparison, between 2014 and 2019, the biggest proportion of the graduates had earned between RM2,001 and RM2,500, even reaching a higher income bracket of RM3,001 to RM5,000 in 2015.

This was a marked increase from the period of 2010 to 2013, when the biggest proportion of graduates would have earned between RM1,501 to RM2,000.

But in 2020, this had drastically plunged with the RM1,001 to RM1,500 bracket now the biggest category.

 

 

In terms of numbers, Malay Mail’s calculations show 15,857 Malaysian graduates as falling within the RM1,001 to RM1,500 bracket in the year 2020.

Or in other words, 22.3 per cent of the 71,108 graduates that responded to the MoHE’s survey in 2020.

The total number of fresh degree graduates that respond to MoHE’s surveys differs from year to year, but is mostly on an upward trend from 2010 to 2020.

Similarly, calculations show the actual number of Malaysian graduates earning between RM1,001 to RM1,500 has also mostly been growing in the same period, with 7,082 out of 47,850 respondents in 2010, 7,646 out of 52,014 (2011), 7,144 out of 52,144 (2012), 6,643 out of 48,486 (2013), 7,314 out of 48,435 (2014), 6,634 out of 62,586 (2015), 10,001 out of 72,999 (2016), 11,225 out of 70,597 (2017), and 15,722 out of 86,386 (2019).

How does RM1,000-RM1,500 compare with Malaysia’s minimum wage?

The idea of a national policy for minimum wage or the lowest amount that must be paid to employees was first announced by the Malaysian government in July 2012, which then led to the 2013 implementation of minimum rates of RM900 monthly (or RM4.33 per hour) in peninsular Malaysia and RM800 monthly (or RM3.85 per hour) in Sabah, Sarawak and Labuan.

The minimum wage was increased on July 1, 2016 to RM1,000 in the peninsula and RM920 in Sabah, Sarawak and Labuan, and increased further on January 1, 2019 to a nationwide rate of RM1,100.

On February 1, 2020, the nationwide rate of RM1,100 continued to apply, except for 56 locations (16 cities and 14 municipalities, including national capital Kuala Lumpur) where the minimum wage was increased to RM1,200 every month or RM5.77 per hour.

As comparison, the national poverty line was in July 2020 updated by the Malaysian government to RM2,208, which means households with a monthly income below this amount are considered as poor households.

Beyond the minimum wage which is a legally-binding rate, Bank Negara Malaysia (BNM) gave in a March 2018 paper, its provisional estimates for monthly living wage levels in 2016 in national capital Kuala Lumpur, namely RM2,700 for a single adult, RM4,500 for a couple, RM6,500 for a couple with two children.

The estimates — which BNM had said were subject to revision — were provided to illustrate the concept of a living wage, which is not legally-binding but merely reflects wage levels for a “minimum acceptable living standard”.

Why the numbers matter

Recently, public attention has been focused on a news report quoting DoSM as saying that degree graduates recorded a decrease in monthly income where a “majority” of them earned RM1,001 to RM1,500 in 2020 as compared to RM2,001 to RM2,500 in 2019.

This was particularly shocking to Malaysians as it indicated the possibility there could have been fresh degree graduates that were paid the minimum wage as a starting salary in 2020.

It was however subsequently clarified by the human resources minister that the Social Security Organisation’s Employment Insurance System (EIS) data indicated more employers have been complying with the minimum wage rate, and that only 8.8 per cent of workers hired in the fourth quarter of 2020 were paid with basic wages below the minimum wage of RM1,200.

The controversy was further fuelled when ministers weighed in with suggestions that these low salaries were due to the current economic downturn amid the Covid-19 pandemic, and that graduates may have accepted lower salaries as there were lesser job opportunities.

To find out the actual scale of graduates in the RM1,001 to RM1,500 bracket, Malay Mail looked into all the raw numbers as shown below:

 

 

 

 

In Part II of this story to be published tomorrow, Malay Mail speaks to researchers and analysts, who will explain why there was an increase in the percentage of Malaysian degree graduates earning between RM1,001 to RM1,500 and what this means for Malaysia.

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