KUALA LUMPUR: Malaysia's job market has entered a phase of full employment, with the unemployment rate projected to average 3.3 per cent this year.
This follows a decrease from 3.4 per cent last year, down from 3.8 per cent in 2022.
In a research note, Maybank Investment Bank (Maybank IB) highlighted that as the job market achieves full employment based on the unemployment rate, a crucial next step involves increasing workers' incomes, particularly in certain segments of the workforce where wages and salaries are set to rise.
The average salary for civil servants is set to increase by 15 per cent, with the first phase taking effect on Dec 1, 2024, and the second phase on Jan 1, 2026.
Additionally, the minimum wage may be raised in 2025, from the current RM1,500, which was established in 2022, according to analysts Suhaimi Ilias, Dr Zamros Dzulkafli and Fatin Nabila Mohd Zaini.
The Department of Statistics Malaysia (DOSM) reported a drop in the unemployment rate to 3.2 per cent in August 2024, reflecting 558,500 unemployed individuals. This latest figure marks a 0.1 per cent point decrease after nine consecutive months, during which Malaysia's Labour Force Statistics indicated an unemployment rate of 3.3 per cent.
The Malaysian labour market continued to grow in August, driven by robust economic performance, with a steady increase in the number of employed individuals and a decline in the number of unemployed.
The number of employed residents rose by 0.2 per cent to 16.66 million in August 2024, up from 16.63 million in July. Conversely, the number of unemployed individuals decreased to 558,500, down by 0.9 per cent from 563,700 in July 2024.
Maybank IB noted that the youth unemployment rate fell to 10.4 per cent in August 2024, improving after being stuck in the range of 10.6 per cent to 10.8 per cent from August 2023 to April 2024, although this figure remains above the pre-pandemic low of 9.9 per cent recorded in December 2019.
Furthermore, the informal workforce, comprising daily wage earners such as street vendors, food stall operators, smallholders, self-employed individuals and gig workers, has consistently grown since January 2021, reaching 3.08 million in August 2024.
Maybank IB reported that this segment's growth rate of 3.7 per cent outpaces the overall job growth rate of 1.9 per cent.