KUALA LUMPUR: As of the third quarter of this year, approximately 1.95 million Malaysians with tertiary education are working in low-skilled positions, marking a 1.4 per cent increase from the previous year, a top government statistian said.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said that this data highlights that more than one-third of the country's diploma and degree holders are not employed in roles that align with their qualifications, pointing to significant underemployment in the workforce.
Underemployment refers to the situation in which individuals with educational qualifications beyond the Sijil Pelajaran Malaysia (SPM), such as diplomas and bachelor's degrees, are not working as skilled labourers; instead, they are engaged in semi-skilled or unskilled jobs.
Mohd Uzir, however, said that the overall labour market in Malaysia has improved, fueled by steady increases in both demand and supply for workers, adding that it correlates with economic growth projections of 4.8 to 5.3 per cent for this year.
"This performance is supported by robust investment activities, resilient domestic demand, and a recovery in the export of goods and services," he said in a statement yesterday (Nov 21).
Mohd Uzir said the implementation of initiatives such as the new public service remuneration system and a progressive wage model was expected to boost a more sustainable economic growth in the future.
The Labour Market Highlights for the third quarter of this year showed that the labour force participation rate rose to 70.5 per cent, up from 70.1 per cent in the same quarter last year.
The labour force itself increased by 2.6 per cent to 17.26 million, while the employed population grew by 2.9 per cent to 16.72 million.
Low Unemployment Rate
Meanwhile, a lower unemployment rate of 3.2 per cent was recorded, down from 3.3 per cent recorded in the previous three quarters.
Mohd Uzir said that labour demand in Malaysia has reached its highest level since 2018, with 9.01 million positions in the private sector, reflecting a 1.2 per cent annual growth.
Of these positions, 97.9 per cent (8.82 million) were filled, leaving 2.1 per cent (191,800) as vacancies, primarily in the manufacturing sector, which accounted for 56.9 per cent of the total vacancies.
Mohd Uzir said the number of newly created positions has slightly decreased by 0.6 per cent year-on-year, totalling 31,800 in the third quarter of this year.
"The Malaysian labour market continued to expand in the third quarter of this year as both labour supply and demand improved, reflecting the country's strong economic performance supported by resilient domestic demand and ongoing expansion in exports," he said.
This improvement in business activities would attract more investment and create more job opportunities, Mohd Uzir said, adding that this could lead to rise in income.
"Consequently, the labour market is expected to maintain a stable growth trajectory in the upcoming quarters," he said.
Berita Harian previously reported that the World Bank found Malaysia faces a significant gap between the number of highly educated graduates and the availability of jobs that match their qualifications. Currently, six graduates are competing for every one high-skilled job vacancy.
World Bank economist Alyssa Farha Jasmin said this trend reflects a shortage of high-skilled job opportunities in the country, coupled with a skills mismatch between new graduates and the actual requirements of the job market.
The rising level of underemployment could dampen Malaysia's ambitions to become a high-income nation sustainably if the trend continues.