Median Wage of Graduates Under 24 Dropped 25% In 2020
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Graduates under the age of 24 have already seen their median earnings decline by 25%, from RM2,066 per month in 2019 to RM1,550 per month in 2020, putting them at risk of being the most vulnerable group as Malaysia debates increasing the RM1,500 minimum wage.
The worst-hit age group
Data from the Department of Statistics Malaysia (DoSM) stated the average graduate income in Malaysia fell 10.6% in 2020, from RM5,020 to RM4,489 per month, while the median pay fell 11.3%, from RM4,300 to RM3,796 per month.
The data indicate that young graduates have had the greatest income drop, with their monthly wage slashed by 25%, the greatest among all age categories.
DM Analytics Senior Researcher Zouhair Rosli said that the findings suggest that if the situation does not improve, young graduates will be the hardest hit. As a result, they would eventually be forced to work in vulnerable employment or become underemployed.
Starting your own business isn't always good?
He said that more graduates are being pushed to work in high-risk, low-paying work. According to recent data, graduates are also compelled to start their own businesses. While the government may applaud this, it is not something that one should be proud of, especially among policymakers.
According to DoSM data, only 3.7% of graduates started their own business in 2016. However, in 2019, the number increased by nearly fourfold to 13.7%. It will rise even further to 15.2% in 2020.
Zouhair explained that it is not beneficial to have more young graduates who are self-employed as self-employment is frequently coupled with informal employment activity, which results in poor and unstable income as well as a lack of job security.
Seven out of ten self-employed young graduates make less than RM1,500 each month, putting them near to the hardcore poverty line. What is worse is that only seven out of every 100 self-employed young graduates earn more than RM3,000 per month.
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More young graduates are starting their own businesses.
Employers' concerns
The battle over raising the minimum wage to RM1,500 by year's end is still raging, with the Malaysian Employers Federation and small and medium enterprises calling for a postponement, at least until the economy has improved.
They believe that additional efforts should be made to aid business recovery as well as to control the rising product and service costs.
According to Prime Minister Datuk Seri Ismail Sabri Yaakob, the government is hosting engagement sessions with employers on the RM1,500 minimum wage in order to ensure that it will be implemented holistically.
He said that the government is having a conversation with all employers about the minimum wage as there are businesses that can afford it, but there are other companies that can't. The government is concerned that if they cannot afford it, they will lay off workers, adding to the unemployment rate.
Ismaila also said that the government is not protecting employers and that its focus is employees. If employees' minimum wage can be raised to RM1,500, that is for the best, he said.
Meanwhile, the Malay Economic Action Council recently stated that it endorses the Human Resource Ministry’s suggestion to raise the minimum monthly salary to RM1,500.
It also called on the government to raise the minimum wage at RM1,350 effective immediately since most Malaysians have exhausted their Employees Provident Fund savings due to the pandemic to pay the bills.
Source: The Malaysian Reserve