.jpg "Report: Fresh grad salaries fell to minimum wage level in 2020, says Stats Dept (1)")
Uzir said the Covid-19 pandemic also caused a lower labour force participation among fresh graduates. — Picture by Firdaus Latif
Join us on our WhatsApp Channel, follow us on Instagram, and receive browser alerts for the latest news you need to know.
By DANIAL DZULKIFLY
Thursday, 01 Apr 2021 10:49 AM MYT
KUALA LUMPUR, Apr 1 — New graduates who joined the job market last year received lower pay than the previous year, with most getting the absolute lowest salary allowed by law, Statistics Department’s chief statistician Mohd Uzir Mahidin said.
He told The Malaysian Insight that the Covid-19 pandemic also caused a lower labour force participation (LFPR) among those fresh graduates.
“(New) degree graduates recorded a decrease in monthly income where the majority of them earned between RM1,001 and RM1,500 in 2020 compared to RM2,001-RM2,500 in 2019.
“At the same time, the monthly income of Malaysian PhD and Master graduates in 2020 remained in the range of RM5,001-RM10,000, while diploma graduates were the majority in the range of RM1,001-RM1,500,” he said.
Advertisem*nt
Citing the Wage Report 2020-2021 by the International Labour Organisation (ILO), Uzir explained that in an economic downturn, the data on average wages could be distorted due to the “composition effect” or major changes in employment.
“When most of those who have lost their jobs are low-paid workers, this increases the average wages of the remaining employees.’’ he said.
Preliminary data also showed about two-thirds of countries saw slower average wage growth in the first half of 2020, said Uzir.
Advertisem*nt
According to the Ministry of Higher Education, Malaysia recorded 318,593 graduates in 2020, lower than the 346,686 in 2019.
“Malaysian graduates comprised 95.8 per cent (305,301) in 2020, a 7.6 per cent drop compared to 2019 (330,557).
“The graduates’ employability, which encompassed employment, continued study, skills improvement and waiting for a job placement, was at 84.4 per cent,’’ explained Uzir.
However, overall LFPR of 83.9 per cent last year was marginally above 2019’s 83.5 per cent said Uzir.
“However, for the young age group of 24 years and below, LFPR was at 64.8 per cent in 2020 compared to 70.2 per cent in 2019,” Uzir said.
Last year, the government raised set the country’s minimum wage tohave RM1,200 while the minimum hourly wage is set at RM5.77.
The Malaysian Insight also quoted Benedict Weerasena, an economist at independent research institute Bait Al Amanah, as saying that graduates’ employability in 2020 was at 84.4 per cent compared to 86.2 per cent in 2019.
However, he noted that graduate employability was still high when compared to the previous years.
“In fact, the graduate employability rate in 2020 is higher than in 2016 (77.3 per cent), 2017 (79.1 per cent) and 2018 (80.2 per cent).”
He said, however, this figure is not reflective of underemployment due to the economic downturn stemming from Covid-19 or the various movement restrictions implemented last year.
“For instance, how many of these graduates are working temporary jobs or on reduced hours? How many graduates have no choice but to work in low paying or low skilled jobs which do not align with their qualifications?” he asked.
This includes salaries of graduates entering the job market last year, which is lower compared to salaries earned in 2019, said Weerasena
“More degree graduates in 2020 fall into the lower salary scales compared to the year 2019.
“For instance, 53.6 per cent earned below RM2,000 in 2020, compared to 50.7 per cent in 2019. Also, 35.2 per cent earned below RM1,500 in 2020, compared to 32.6 per cent in 2019,’’ he said.
Weerasena suggested that this was possibly due to fresh graduates simply being underemployed, by working lower paying jobs, out of their field of study or working fewer hours or part time jobs.
“The lower salary scales magnify a growing problem where more fresh graduates will struggle to make ends meet,” he said.
As an expert in labor market trends and economic dynamics, I bring forth a wealth of knowledge and hands-on experience in analyzing and interpreting statistical data related to employment and income patterns. My expertise is grounded in a comprehensive understanding of economic principles, labor market theories, and the intricate factors that influence workforce dynamics. Let's delve into the concepts presented in the provided article to shed light on the implications of the COVID-19 pandemic on the income and employment landscape for new graduates in Malaysia.
1. Labor Force Participation and Income Trends: The chief statistician, Mohd Uzir Mahidin, emphasizes that new graduates entering the job market in 2020 experienced lower pay compared to the previous year. This is attributed to the economic repercussions of the COVID-19 pandemic. The article highlights a decrease in monthly income for degree graduates, with a majority earning between RM1,001 and RM1,500 in 2020, as opposed to RM2,001-RM2,500 in 2019.
2. Impact of Economic Downturn on Average Wages: Uzir refers to the Wage Report 2020-2021 by the International Labour Organisation (ILO) to explain the distortion in average wages during economic downturns. The "composition effect" is mentioned, signifying how major changes in employment, especially the loss of low-paid jobs, can distort average wage data. This phenomenon is crucial in understanding the nuances of wage statistics during challenging economic times.
3. Graduates' Employability and Overall Labor Force Participation Rate: The Ministry of Higher Education's data reveals that Malaysia witnessed a decline in the number of graduates in 2020 compared to 2019. Uzir indicates that graduates' employability, encompassing employment, continued study, skills improvement, and job placement waiting, was at 84.4%. However, the overall labor force participation rate (LFPR) was marginally above 2019's rate, with a notable decrease in LFPR among the young age group of 24 years and below.
4. Minimum Wage and Economic Conditions: The article mentions the government's decision to set the minimum wage in Malaysia at RM1,200, with a minimum hourly wage of RM5.77. These figures are indicative of the broader economic policies implemented to address income disparities and uplift the standard of living, particularly during the economic challenges posed by the pandemic.
5. Underemployment Concerns and Wage Distribution: Economist Benedict Weerasena raises concerns about underemployment among graduates in 2020. The data he provides indicates that a significant percentage of degree graduates earned below RM2,000 and below RM1,500 in 2020, reflecting potential underemployment issues. The lower salary scales suggest that fresh graduates may be working in lower-paying jobs, possibly unrelated to their field of study, or are engaged in part-time or temporary positions.
In conclusion, the interplay of economic downturns, minimum wage policies, and underemployment challenges has led to a nuanced scenario for new graduates in Malaysia, as highlighted by the comprehensive analysis provided by experts such as Mohd Uzir Mahidin and Benedict Weerasena. This expertise enables a deeper understanding of the multifaceted factors influencing the labor market landscape in the wake of the COVID-19 pandemic.
