Malaysia faces youth unemployment crisis

The youth unemployment rate in Malaysia, at 10.9 percent officially, is more than triple the national rate of 3.3 percent and has been gradually rising over the past decade, exacerbating the disgruntlement of a youth constituency that was instrumental in swinging the vote that brought the Pakatan Harapan coalition to power in the 2018 general election. Unemployed youth make up almost 60 percent of the 504,000 currently unemployed.

Then in opposition, Pakatan Harapan campaigned hard on youth-friendly policies with firm pledges to tackle youth unemployment. But after more than a year of unfulfilled promises like amending the Universities & Colleges Act to allow students to become involved in politics, disillusionment is increasing rapidly. A recent Merdeka Centre survey of voter satisfaction found that 42 percent (53 percent among Malays) of the 20-30 years age group were either dissatisfied or angry with the Pakatan Harapan government.

Three distinct youth unemployment segments can be identified:

1. Graduate youth. The Ministry of Education reported that 57,000 of 173,000 of last year's graduates remained jobless after looking for a job for six months.

2. Rural youth, those who principally remain at home with their parents and are not working, and

3. Urban youth, comprising non-graduates who are looking for employment in retail, administration, distribution, manufacturing, hospitality, or other service industries.

Graduates – Structural mismatch and over-supply

The prime reason for graduate youth unemployment is the mismatch of graduate qualifications with the country's workforce needs. Of 1.47 million vacancies, 86.9 percent are for low skilled jobs. Only 4.7 percent of those advertised required any tertiary qualifications. Graduate unemployment was 9.6 percent or 204,000 at the end of 2108.

The Ministry of Education decides what courses universities offer rather than market forces. This is where the mismatches are coming from. Malaysian universities are currently overcapacity and producing too many graduates to what can be generally absorbed into domestic Malaysian workforce.

Rural Youth – The hidden segment

Rural youth unemployment has been endemic in Malaysia's kampongs over the past decade. Asia Sentinel visited Northern Malaysia and the East Coast to speak to civil servants and police officers on the ground about the problem. It is estimated that rural youth unemployment could be as high 75-90,000. This is statistically uncounted as many still live with their families and haven't claimed they are actively looking for work.

This group is primarily only educated to secondary school, with many not finishing. According to civil servants on the ground, rural youths don't feel motivated to travel to towns to take up jobs that pay low wages. Many can only speak Malay, have no skills and are not self-disciplined. In addition, many non-skilled jobs are taken by foreign workers which makes these jobs socially unappealing to local youths. Serving people isn't natural to this group and those who try to work in a restaurant or shop usually only last a few days and give up.