On youth and the economy and post-retirement workers
Young Malaysians made up 62.8% of our workforce.
Yet today, in terms of jobs, young Malaysians are facing two major problems.
Firstly, there is the problem of youth unemployment. Although the Economy Minister had said that unemployment rate in our country is low, between 3-4%, youth unemployment however is high at 10.4%. In the answer given to me in Parliament by the Human Resources Minister on 12 November 2014, the Minister said that youth unemployment at 10.4% can be considered “normal”. Yet in the same breath, he also compared that to youth unemployment in Singapore at 7% and Thailand at 3.4%. The question then is, why we are not able to lower youth unemployment at least to the levels of our neighbouring countries?
Secondly, a major job-related problem facing young Malaysians today is underemployment.
I want the government to realise that the problem of underemployment is not limited to just the formal definition of “those who are working less than 30 hours a week and are able or wish to do more”. It also encompasses the overall quality of employment, for example low wages, mismatched skills or qualifications to the jobs undertaken, incondusive work environment and others. For example, In the government’s reply to me in Parliament last year, it was revealed that 21% of our graduates are forced to work in jobs which do not require any tertiary education.
In terms of wages, according to the latest Malaysia Salary and Wage Report 2013, the min monthly salary of a Malaysian worker is RM2,052 and the median monthly salary is RM1,500. However, a large majority of our youth workforce (age between 15-24), 67% of them are earning RM1,000 and below while 21% of our youth workforce are earning between RM1,000 to RM1,500.
| Wage categories (RM) | No. recipients (‘000) | Percentage of recipients (%) |
| 1,000 and below | 1,144.5 | 66.8 |
| 1001 – 1500 | 350.8 | 20.5 |
| 1501 – 3000 | 199.8 | 11.7 |
| 3001 and above | 18.1 | 1.0 |
| Total | 1,713.2 | 100 |
Table 1: Wages of youth workers (15-24 years old) in Malaysia (excerpt from the parliamentary reply by the Human Resources Minister on 12 November 2014)
This means, 99% of our youth who are working earn below RM3,000 a month and if measured by the Selangor Pakatan Rakyat state government’s Poverty Income Line at RM1,500 a month, 88% of our working youth are in poverty.
Our education system including re-training programmes failed young Malaysians
This once again shows that not only our regular education system has failed – a view shared recently by former Prime Minister Tun Dr. Mahathir – even the various re-training and continuous education programmes which the government put in place have totally failed to secure decent employment for young Malaysians. And even if they do find jobs, the quality of employment is in question.
Take action now to avoid “scarring” effect on young people
The government must realise that both youth unemployment and youth underemployment are not merely problems for today but will have a long term effect.
According to an article in the Economist in September 2011, entitled, “The Jobless Young: Left Behind”, studies from the United States and UK found that youth unemployment when they are in their early 20s will leave a “wage scar” that affects the quality of the employment ten years down the road until they are in their 30s.
In other words, the quality of education, training and employment which our young people receive today is very important because its consequences linger on for at least a decade. If nothing substantial is done today, we will see the adverse effect not only on our youth but also on the economy as a whole ten years from now.
The government must publish a report on youth and the economy
Hence, I urge the Human Resource Ministry to prepare a detailed study on the problems of young Malaysians and the economy including youth unemployment and underemployment. Currently, there is not much data and information available on these matters. We need to understand the situation better in order to better formulate our response.
I also urge the Ministry to work with related-ministries as well as the Department of Statistics to publish an NEET report for youth. NEET means, “Not in Education, Employment or Training”, a measurement used in many countries in the world to better reflect the actual situation of young people in today’s economy. No such report is available for Malaysia today.
Socioeconomic sustainability for senior citizens – enact a new law to protect post-retirement workers
Last week in Parliament, Deputy Finance Minister, Ahmad Maslan acknowledged that for most contributors, their KWSP savings are very low.
According to the latest report, 69% of KWSP members age 54 have savings below RM50,000 in their KWSP accounts while over 80% of members age 54 have savings of less than RM100,000.
The Deputy Finance Minister also urge KWSP members to emulate workers in developed countries where they continue to work after reaching the minimum retirement age.
While this is a sound advice, I want to also urge the Malaysian federal government to emulate governments of developed countries to create laws to regulate and protect post-retirement workers seeking to re-enter the job market. Without formal protection, retirees seeking re-employment will face various challenges such as discrimination in hirings, unfair wages, work benefits, because of their age.
As such, in order to encourage re-employment of retirees, I call on the government to table a new Act to protect and facilitate re-employment. The Act should address issues such as the conditions and process for hiring retirees, post-retirement job training, rights of post-retirement workers which should be adjusted to the context of their age etc. One model which we can consider for this new legislation is the Singapore Retirement and Reemployment Act.
Implement roadmap to wean off our dependency on foreign labour
Finally, one fundamental issue needs to be addressed if we want to deal with the question of jobs in this country, i.e. our over-dependence on cheap foreign labour. The manufacturing and services sectors for example should be able to absorb young Malaysians and post-retirement workers but are now saturated with foreign low-skilled workers. This not only reduces employment opportunities for locals but also leads towards a competition to the bottom where our economy has no or very little incentive to go up the value chain, no incentive to improve workers’ welfare or to increase their skills (and therefore the quality of employment).
Thus I urge the government to formulate a workable roadmap to assist our industries to reduce the dependency on cheap low-skilled foreign labour. This should include assistance such as grants especially for small and medium industries to increase their value, innovate, improve on technology as well as workers’ skills and provide better employment packages to their workers.