Malaysia’s unemployment rate reached 27-year high



MALAYSIA’s unemployment rate rose 4.5% in 2020, the highest rate recorded since 1993, according to the Department of Statistics Malaysia (DOSM).

The number of unemployed individuals in December 2020 also rose for the annual comparison, rising 1.6% to 772,900 individuals or at a rate of 4.8% in December.

Chief Statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said in 2020, the labour market was being challenged with the rising numbers of new individuals entering the market amid the unstable economic activities.

“The labour market condition in December 2020 was still influenced by the health crisis and economic consequences and has caused slower recovery momentum in the labour market.

“Thus, during the month, the labour market remained competitive with the number of the labour force increased by 27,800 persons to 15.99 million persons

“The labour force participation rate (LFPR) remained at 68.% for the month while the number of persons outside the labour force registered a decrease of 2,600 persons to 7.37 million persons compared to November 2020 with the largest composition was due to schooling and training,” he said in a statement yesterday.

Mohd Uzir added that in the fourth quarter of 2020 (4Q20), there were 533,700 individuals who worked less than 30 hours per week due to less productive working conditions or insufficient work.

“Out of the total number of employees, 369,100 persons were categorised as time-related underemployment since they worked less than 30 hours a week and were able and willing to work extra hours.

“They comprised 2.4% of the overall employment in the 4Q20. In the meantime, skill-related underemployment which comprises those with tertiary education but working in semi-skilled and low-skilled occupations accounted for 1.89 million persons or 37.4% of the total of employed persons with tertiary education,” he said.

He said the LFPR has edged down by 0.3 percentage points to 68.4% throughout 2020, based on the quarterly data, while the number of employed persons decreased by 0.2% to 15.1 million individuals.

“The marginal decrease was due to the uncertainty in the labour market following the health and economic crisis during the year.

“As the country experienced a slower labour demand in 2020 due to the adverse impact of the pandemic, the unemployed persons recorded an increase of more than 200 thousand persons.

“The health crisis has given a huge impact to the labour force which led to the unemployment rate reaching above 4% against an average of 3% recorded in the pre-crisis period,” he said.

Read our previous report here:

Malaysia’s jobless rate expected to remain high until mid-2021