Youth Unemployment A Looming Cloud Over Malaysia’s Economy

From Twitter trolls to public rallies, youth unemployment has always been the main concern for Malaysia’s younger generation. Rightfully so, as of January 2021, there are 295,300 youths aged 15- 24 years old currently unemployed[1]. Just a month prior, the figure was 17,000 higher[1]

The numbers are much worse for the 15 – 30 years old demographic, with the unemployment rate being 9.2%, almost double the national average (4.9%)[1]

Source: FocusMalaysia

Whilst many might blame the economic influence of the COVID – 19 pandemics increasing nationwide unemployment by 270,900[1], the fact is that the youth’s labour force participation in Malaysia was already steadily increasing over the past decade[2], and Malaysia’s youth unemployment vastly exceeds the other age groups[2]. Already younger Malaysians face more challenges in terms of housing affordability, higher debt levels and lower wages.

What Does Youth Unemployment Mean? 

Malaysia defines youth unemployment as anyone between the age of 15 – 24 that is currently without work and seeking employment[3].

This age demographic alone makes up 18% of Malaysia’s labour force[2] and 17.8% of its current population. 

There are two types of unemployment. First is the actively unemployed, who are currently between jobs and constantly looking for work and the inactive unemployed. This group is unemployed because they:

  1. Are not looking for work because they believed no work was available or that they were not qualified enough;
  2. Would have looked for work if they had not been temporarily ill or had it not been for bad weather;
  3. Were waiting for the result of job applications; 
  4. Had looked for work prior to the reference week[2]

Barring the few that are not searching for work, the fact is that so many of Malaysia’s future generation are without work and unable to support themselves financially. 

Unemployed Youths: Who Has it Worse?

Despite the vast majority of Malaysia’s labour force being in urban domains, unemployed youths can be found in urban and rural areas[2]. Whilst there is a decline in rural unemployment, this is mirrored by the rise of unemployment in urban areas. 

Geographically, the state struggling with youth unemployment the most is Sabah, with 14% of the youth from Sabah are without work. The states of Kedah, Kelantan, Perak and Perlis are close behind with 11%. Selangor and Kuala Lumpur hover at 10%, while Penang’s state possesses the lowest unemployment rates at 8%[2]

Sabah also has the highest graduate unemployment rates for both men and women[2]. This is surprising as 15-19 year-olds in the state were much more likely to choose work over continuing their education. 

When it comes to gender differences, male unemployment is outstandingly higher in Sabah, but female youth unemployment is prominent throughout the Northern Peninsula, Sarawak, Pahang, Terengganu, Selangor and Kuala Lumpur. Female unemployment is a much more common occurrence. 

In 2019, youth unemployment rates were several times higher than any other age group in Malaysia. It was 14.4% for 15-19 year-olds and 9.5% for 20-24 year-olds[2]. The closest age group to this demographic were those aged 25-29 years old with an unemployment rate of 3.8%, whereas all other age groups were under 2%[2].

Despite many of the youth opting not to continue their education and enter the labour force, many are still left unemployed and without income. So, where is the disconnection between enrolling into the workforce and the rise in unemployment?

Employer’s Opinion on Youth Unemployment

Over the past twenty years alone, youth unemployment has been rising simultaneously with the global average. What this means is that it is increasingly harder for young people to find a job today than it was 20 years ago[5].

A common problem that the youth face when applying for a job is the lack of practical experience. This is understandable, with a large percentage of the youth labour force being inclusive of teenagers. The majority of this census are entering the job-seeking pool for the first time. Many do not have hands-on working experience and are yet to develop their social networks or soft skills[5]. 

From the hiring parties’ point of view, potential candidates lacked language proficiency, with technical and professional skills that were not up to par with existing employee standards. The employers claimed that young jobseekers asked for salaries and working conditions that were simply excessive and unrealistic[2].

Source: World Bank

Are Youth ‘Overqualified’ For Available Job Opportunities? 

In 2019, the Higher Education Deputy D-G released a press statement that over 600,000 job vacancies were yet to be filled as ‘graduates too selective’[7]. He stressed that there wasn’t a problem with job availability but picky tendencies in the youth workforce. 

His statement is far from true when looking at statistics. In 2019, Zouhair Mohd Rosli, Senior Researcher who also co-authored UNICEF’s report on Child Poverty said that: 

There are 1.04 million graduates who are employed in jobs that only require SPM and below last year compared to about 800,000 graduates in 2016. It is getting harder for graduates to get jobs that suit their qualifications. – Zouhair Mohd Rosli (Senior Researcher, DM Analytics Sdn Bhd)[9]

A Khazanah Research Institute study confirmed the point that most of the youth are “over-educated”, with many taking up unskilled or low-skilled jobs when they are more than qualified to do much better[8].  It is also not uncommon for youths to obtain positions that are unrelated to their field of education. 

Source: NST

Young Malaysians Are Not Only Unemployed But Underutilised

It is important to remember that not everyone can afford to continue their education past SPM. Many choose to complete their SPM exams in order to qualify for unskilled or semi-skilled jobs immediately after. These usually consist of youths from low-income families looking for a source of income to support their families. 

When entry-level jobs such as clerks, food and beverage staff, and salespersons jobs are dominated by ‘overqualified’ youths, SPM graduates or less have a much more difficult time securing a position. 

“Graduates should be employed in skilled jobs where individuals with a degree should be employed in professional jobs such as accountant, lawyer, engineer while those with a diploma should be technicians, construction supervisor and medical assistant… Yet, graduates are currently employed in semi- and low-skilled jobs like clerks, salespersons, food and beverage supervisors, outlet supervisors, kitchen assistants, and cleaner.” Zouhair Mohd Rosli, senior researcher and co-author of a Unicef report on urban child poverty[9]

Where Should Qualified Youths Be Looking For Jobs Opportunities? 

According to MyfutureJobs, the top five careers are all under services and general programs.  Many of which are entry-level jobs. 

  1. Commercial sales representatives
  2. Department store managers
  3. Marketers
  4. Management Assistants
  5. Financial Planners

Other fields such as social sciences, business, law; engineering, manufacturing and construction; and education are vacancies dedicated to the high-skilled youths, thus requiring more communication skills and a refined technical and professional that fit the companies criteria. 

Securing the Future for Malaysian’s Youth

On average, there are roughly 133,800 new jobs for graduates added to the economy each year[10]. A large fraction within the high-skilled bracket needs a diploma or degree to qualify. The Department of Statistics Malaysia has estimated that about 300,000 to 350,000 fresh graduates will enter the labour market in 2020. 

Source: NST

Baring the work experience factor, youths may qualify academically for high-skilled positions. However, they lack good communication and soft skills. It is the jobseeker’s responsibility to ensure that they meet other requirements necessary for the job. It is not simply about graduating with a high CGPA. Employers are keen on good communication and soft skills as well. Having a good command of a second language, preferably English, and being a team player makes the candidate more attractive overall. 

When it comes to employers’ part to play in overcoming youth unemployment, there is a clear gap between the employer’s expectations and employee qualifications. It has become a common culture in order to gain working experience (internship or odd jobs) before starting a full-time career. For those that cannot afford tertiary education, they ought to be given priority when applying for low-level jobs, while those who can afford it should think of ways to make them more attractive and employable. 

At the end of the day, it’s not the youth’s decision what company they work for. They simply go where they are accepted. If there indeed are thousands of job opportunities, employers need to be willing to work with the youth and develop the necessary skills required for the job. Eventually, these people will be primed perfectly for the company in the future. A win-win for all.

Explore Our Sources:

  1. Department of Statistics. (2021). Key Statistics of Labour Force in Malaysia, January 2021. Link. 
  2. L. H. Aun. (2020). Unemployment among Malaysia’s Youth: Structural Trends and Current Challenges. YUSOF ISHAK INSTITUTE ANALYSE CURRENT EVENTS. Link.
  3. The Global Economy. (2019). Malaysia: Youth unemployment. Link. 
  4. F. G. Sander, T. Packard, R. S. Purnamasari, M. Testaverde, K. M. Wacker, W. A. Yap, P. S. Yoong. (2014) Malaysia economic monitor: towards a middle-class society (English). Malaysia economic monitor Washington, D.C.: World Bank Group. Link. 
  5. J. Mohamad. (2020). Youth Unemployment in Malaysia & the Region. ISIS Malaysia. Link. 
  6. Department of Statistics Malaysia. (2020). Graduates Statistics 2019. Link. 
  7. Malay Mail. (2019). Higher Education deputy D-G: Over 600,000 job vacancies not filled as graduates too selective. Link. 
  8. L. L. Lean, J. Mansor, M. A. R. A. Rahim, N. T. Sazali and M. K. M. Izhar. (2018). The School-to-Work Transition of Young Malaysians. Khazanah Research Institute. Link. 
  9. L. Zainuddin & D. Kaur. (2019). Graduates are not picky with jobs. The Malaysian Reserve. Link. 
  10. M. S. Darusman. (2020). Graduate Mismatch In The Labour Market. The Star. Link. 

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