by AZREEN HANI / pic by TMR FILE
THE median salary of graduates under the age of 24 has already dropped 25% from RM2,066 a month in 2019 to RM1,550 a month in 2020, risking them to be the most vulnerable group, as Malaysia continues to debate on raising RM1,500 minimum wage.
According to data from the Department of Statistics Malaysia (DoSM) in 2020, the average salary of graduates in Malaysia dropped 10.6% from RM5,020 to RM4,489 while the median salary dropped 11.3% from RM4,300 to RM3,796 per month.
This means that young graduates experienced the worst income reduction with their monthly salary reduced by 25%, the worst reduction compared to other age groups.
“What this means is young graduates are the worst hit if the situation is not improved, with lack of proper job opportunities,” DM Analytics Senior Researcher Zouhair Rosli told The Malaysian Reserve.
This would eventually see them being forced to participate in vulnerable employment or getting underemployed.
“More graduates are forced to take risky and unsecured employment activities. Latest data shows that graduates are also forced to set up their own business. While the government may applaud this, it is something that should not be proud of, especially among policymakers,” he said.
Per DoSM’s data, he said in 2016, only 3.7% graduates set up their own business. However, in 2019, the percentage shot up to almost four times to 13.7%. In 2020, it increased even higher to 15.2%.
“Is it good to have more self-employed young graduates? No. Self-employment is often associated with informal employment activity where it will not only bring low and unstable income, but also lack of employment protection,” he explained.
This is evident with seven in 10 of selfemployed young graduates earn income below RM1,500 per month, close to hardcore poverty level.
Worse, only seven in 100 self-employed young graduates earn income above RM3,000 per month.
The debate on raising minimum wage to RM1,500 by year-end remains widely debated as the Malaysian Employers Federation as well as the small and medium enterprises called for the deferment to raise it, at least until the economy has recovered.
They said more efforts should be done to aid business recovery as well as controlling the rising cost of products and services.
Prime Minister Datuk Seri Ismail Sabri Yaakob had said that the government is holding engagement sessions with employers on the RM1,500 minimum wage to enable it to be implemented holistically.
“We are undertaking an engagement with all employers on this minimum wage, because there are companies that can afford it but also companies that are too small and can’t. We are afraid that if they can’t afford it, they will retrench workers and this will add to the unemployment numbers.
“We are not protecting employers, our interest is employees if employees’ minimum wage can be raised to RM1,500, that is for the best,” he told reporters after launching the JaminKerja Keluarga Malaysia initiative and JaminKerja Keluarga Malaysia Career Carnival 2022 over the weekend.
However, the Malay Economic Action Council recently said it supports the Human Resource Ministry’s proposal to increase the minimum monthly wage to RM1,500 and urged the government to set the minimum wage at RM1,350 effective immediately as most Malaysians have depleted their Employees Provident Fund savings due to the Covid-19 pandemic to make ends meet.