High wage demand due to ‘over-educated’ young workers, says KRI

By SHAHEERA AZNAM SHAH / Pic By BLOOMBERG

EMPLOYERS should disregard all the misconceptions and negative perceptions that are pegged to young workers and allow new jobseekers to widen their opportunities in the job market.

According to Khazanah Research Institute’s (KRI) recent study, the School-To-Work Transition Report, common perceptions including “demanding and requesting unrealistic salary” are not valid as most young workers are often forced to take low skilled jobs that are not related to their field of studies.

The study also revealed that most new employment seekers are “over-educated” for the jobs that are available.

A very commonly cited reason for rejection of employment among young people is the fact that they demand for unrealistic wage expectations, with employers complaining that fresh graduates are “asking for too much”.

“The study found that the reservation wage, below which they would refuse a job offer, is RM1,555 for young workers and RM1,715 for jobseekers. The actual mean monthly income of young workers is RM1,846,” it said.

The study stated that “high-income jobs” is ranked fourth in the youth and young workers’ list of the prominent characteristic in their jobseeking process.

“Youth unemployment is often attributed to them being ‘choosy’ and wanting higherpaying jobs.

“The results of the study argue that young men and women should not be considered ‘choosy’ when most of them in the unskilled and lowskilled jobs are ‘over-educated’,” KRI’s study stated.

KRI executive committee chairman Hisham Hamdan said acceptance of youth and young workers to minimal wage should be worrisome to the country, and pose a greater indication of the country’s state of the economy.

“The fact that they are willing to accept a RM1,700 job is something that we should question. We know that the cost of education has risen, as well as the cost of living.

“If we look at the basic salary, it is no different than in 1990. This is the issue that we need to address, in addition to why there are not enough high-income jobs and why workers are not getting a higher salary,” he said at the launch of the study in Kuala Lumpur yesterday.

KRI visiting senior fellow Dr Lim Lin Lean said the nature of the business environment is competitive and this might have hindered the country to achieve high-income status.

“We have addressed the fact that young workers do not expect higher wages, but just want to find jobs.

“It has been a long-term issue in this country. It is also one of the reasons that we cannot achieve high-income status as we keep using cheap labour.

“We can still see today that the businesses here are putting little incentives to adopt technologies which result in higher productivity,” she said.

Lim added that Malaysian businesses can be competitive without compromising the cost of production.

“In reality, our young workers are prepared to do the same types of jobs that migrant workers are doing, but with a slightly higher pay.

“Companies can be competitive in more ways than leverage on cheap labour as they should be more dependent on technologies.

“It is revealed in the study that the use of technologies among Malaysian businesses has been facing constraints due to the access to cheap labour,” she said.

Lim said the study also revealed a changing pattern in youth employment, which is becoming visible due to the advent of digital platforms.

“It is true that now more people will opt for freelance jobs that are on the digital platform. Even if they are in a professional line, they would opt for working online rather than for an employer.

“It is because more jobs are linked to the Internet of Things and the nature of work is changing so fast.

“Nobody imagined that we could have occupations such as a drone controller, or a social media influencer,” she said.

Lim added that the authorities have to recognise all the changes and allow for adjustments in terms of legislations and social protections.

“It is not something that we should be scared of, although it may be an insecure and unstable field of jobs.

“Now, there is a need to recognise that this is going to be the reality and allow for a change to the legislations and social protections, in addition to offering more digital support to such workers,” she said.