Commentary: Graduate Underemployment in Malaysia Is a Complex Challenge With Political Implications

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As Malaysia’s political landscape gears up for the upcoming state elections, a concern has come to the forefront – a large number of highly educated graduates who find themselves in jobs that fail to tap into their full potential.

Around 40 per cent of degree- and diploma-holders are underemployed in semi-skilled and low-skilled jobs, according to 2022 job placements data released in June by Malaysia’s Social Security Organisation (Socso). 

Malaysia is undergoing a stretch of political turbulence, with governments at both the federal and state levels being prone to frequent and often unexpected changes.

Human Resources Minister V Sivakumar said last week at the launch of a career exploration programme that the issue of skills mismatch needs early intervention. He has previously warned that as many as 4.5 million Malaysians could lose their jobs by 2030 if they do not improve their skills to meet the needs of an evolving job market.

The issue of job mismatch in the country raises pertinent questions about the impact this could have on voter sentiment and policy priorities.

Will young people wasting their qualifications become a political issue? They are an important voting bloc, so how will parties woo young people who feel they have wasted their education?

With more voters in Malaysia getting better educated, how will this shape Malaysia politics going forward? 

TOO GOOD FOR THEIR JOBS

Examining the issue of job mismatch in Malaysia requires a thorough exploration of the interconnected structural factors at play.

According to official statistics, there were 5.6 million graduates in Malaysia in 2021, up from 5.36 million in 2020.

On the one hand, it should be noted that in a still developing country, albeit one endowed with several high-tech industries such as Malaysia, the public and private sectors face limitations creating and maintaining a substantial number of jobs that require graduate-level competence.

Despite that, successive Malaysian governments have been more than enthusiastic in churning out as many university and college graduates as possible, to be touted as bright spots in their oft-changing educational policies.

As such, there is a fundamental mismatch between the number of graduates the industries can effectively absorb and the accumulated backlog of graduates entering the job market.

Furthermore, this seemingly insatiable drive to produce more and more graduates often inadvertently comes at the expense of course standards. This is coupled with a preference for majors that are either more cost-effective to establish on a large scale or are perceived as facilitating a smoother path to graduation for students.

Consequently, employers may view such mass-produced graduates unfavourably, perceiving them as lacking the required types and levels of skills, thereby limiting their employability to lower-skilled positions.

This situation underscores the existence of both quantitative (too many) and qualitative (too “easy” to graduate) disparities, which are evident for many in Malaysia, but are too sensitive to be openly discussed – what more effectively addressed – in a highly racialised domestic sociopolitical environment.

BREAD AND BUTTER CONCERNS

The Malaysian job landscape presents a dual-sided coin with its own complexities.

Despite being an upper middle-income economy, Malaysia has grappled with persistently modest average graduate pay scales.

According to the Socso survey, 28.7 per cent of graduates’ placements in 2022 started below RM1,999 (US$440) a month.

The average household in Malaysia spent RM5,150 per month in 2022, according to the Household Income and Household Expenditure Survey released last month.

Employers often cite education-job mismatches as a reason for stagnant wages, alongside what they perceive as lacklustre work attitudes from graduate employees. Conversely, many graduates may be hesitant to work for employers who offer what they consider inadequate or subpar wages.

In the Socso graduate job survey, data showed that close to 65 per cent – nearly two-thirds – of those underemployed went into “sales and services”.

It can be argued that these underemployed graduates may prefer the often commission-based remuneration schemes associated with such roles, which they may feel are more commensurate with their job contribution. Others within this category might take up essentially franchised independent-contractor positions, such as e-hailing, which gives them greater flexibility over their schedules.

In the realm of “sales and services”, these graduates, while perhaps still mildly perturbed at being underemployed, are likely to be more preoccupied with practical concerns such as meeting sales targets and fulfilling financial commitments.

Politically, they would be more likely to prefer parties they perceive as effective in managing the economy and rolling out socioeconomic policies with promises of tangible improvements to their livelihoods, irrespective of whether their employment status aligns with their educational qualifications.

LOOKING FOR SOLACE

On the other hand, the Socso survey also showed that around one-third of those underemployed graduates were engaged in clerical, operational or “elementary” positions. 

It’s not unreasonable to deduce that a significant portion of these graduates may not be too satisfied with their current circumstances. Having invested time and money on college or university, and with high expectations from their families, they now find themselves confined to roles they may view as disagreeable, with seemingly limited avenues for advancement.

In contrast to their sales-and-services counterparts who prioritise socio-economic concerns, this group of graduates may be more inclined to identify politically with parties that lean towards religious or racially charged issues in their political discourse.

At present, across the colourful Malaysian political spectrum, there appears to be a lack of substantial and sincere political will to effectively address the increasingly pressing issue of graduate underemployment.

The subtle but eventual effect of this on Malaysian politics, however, is something to watch.