LETTERS: Issues in the labour market, such as unemployment, are a global problem and have been for several decades. Malaysia is no exception. These issues mostly concern youth unemployment.

The rise in youth joblessness has not happened across the board, as the youth in some states in the country have fared much better than others. There are a lot of discussions on unemployed youth, but not much on the issues or trend of youth in employment.

Throughout last year, the country experienced a sluggish economic performance, with economic growth regressing by 5.6 per cent.

This created a large negative effect on wage earners, especially for new entrants to the labour market. The average wage for youth (those aged 15 to 29) has fallen to what it was three years ago at RM1,915. 

Wage growth for youth had also taken a dip, dropping from 4.6 per cent to three per cent. Adults, too, had been negatively impacted. However, their wage growth reduction is relatively minimal compared with the younger workforce, from five per cent to 4.2 per cent.

Analysing deeper, the number of youth in high-skilled jobs is lower than adults. For example, last year, only two out of 10 high-skilled jobs were held by younger people. Furthermore, they faced a high level of competition in gaining employment, especially in the higher-quality and skilled work categories.

For example, last year, younger people made up only one-fifth of those employed in the information and communication sector, and only three out of 10 workers in the professional, scientific and technical sub-sectors were youth.

Therefore, young Malaysians face a two-fold problem: their wage growth is stagnant and they lack the opportunities to work in high-skilled jobs and future sub-sectors.

These challenges are making it harder for the younger generation to achieve financial independence and for them to have a better career trajectory. It is hoped, therefore, that the government will seriously look into resolving them.

Youth are the future of the workforce in any country. So, perhaps, there are some recommendations that need to be highlighted.

For starters, the government can enact policies that enhance the transition from tertiary education to the workplace, foster the creation of more highly skilled jobs for youth, and increase the wellbeing and social capital of youth.

Investment is crucial to growth, which can be shared in all stages, especially the young. Moreover, better education, training, and retraining can ease labour market adjustment to long-term economic transformation, especially in the Fourth Industrial Revolution age.

So, the issues of a lack of opportunity for an excellent career path and the youth's contributions to the economy, which affect the Malaysian labour market, deserve attention.

In addition, investing is not the only solution to the problem, though it might solve youth unemployment as it also helps push labour's income share upwards and, at the same time, reverses the negative trend of recent decades.

To summarise, structural and fiscal policies should promote economic conditions conducive to sustainable and more inclusive real wage growth.

The youth will be hopeful that the situation can be tackled and improved in the short and medium term, taking into account the progress in overcoming the pandemic.

AMIRUL HAMZA ABDULLAH

Research Analyst

Institut Masa Depan Malaysia (MASA)

https://www.nst.com.my/opinion/letters/2021/08/719834/address-youth-unemployment