TRANSITIONING from university to the professional world can be both exciting and daunting for fresh graduates.
In 2021 alone, Malaysia witnessed an impressive number of 5,607,800 graduates, with 4,766,500 individuals venturing into the labour force.
However, the prevailing issue of low starting salaries poses significant challenges for these young talents.
Fresh graduates invest years of dedication and resources in acquiring knowledge and developing skills for success in their chosen fields.
From the age of 18, they embark on a higher education journey, meticulously selecting courses that prepare them for their future careers.
But, upon entering the workforce, their expectations are often met with disappointment as low starting salary offers become the norm.
This can be attributed to the structural wage problem in Malaysia. Despite numerous media discussions on the issue, calls to address this problem have not been given due attention.
While it is acknowledged that the government is in a difficult situation to immediately raise the living wage to a certain level, the public has been yearning for affirmative action.
One key aspect of the structural wage problem contributing to low starting salaries is the mismatch between the skills possessed by fresh graduates and those demanded by employers.
Employers may justify offering lower starting salaries by claiming that graduates lack specific skills needed for the job.
This disconnect often leads to lower wages for individuals whose specialised skills and certifications do not align with industry requirements.
A recently-published article on "Employers unable to meet fresh graduates' high salary expectations" shows that there is a significant percentage, with 60 per cent of the vacancies offering a salary from RM1,500 to RM1,999.
The average starting salary for graduates with honours degree stands at approximately RM2,700, with only 15 per cent of employers offering vacancies in the range between RM2,000 and RM2,999.
It is essential to recognise the value that these qualifications bring to the job market.
Graduates' expectations for starting salaries should align with the level of education and skills they possess, reflecting the efforts and investments they have made in their education.
Addressing the structural wage problem requires a comprehensive review of the wage structure across industries, which has long been overdue.
For years, wages have not been adjusted to keep up with the ever-soaring inflation and many employers fail to revise increments accordingly to ensure fair compensation.
Sadly, the recent 2023 Budget announcement did not directly address the urgent need for fundamental structural changes to improve wage conditions for the working masses, particularly low- and middle-income brackets and fresh graduates.
Policymakers must conduct a thorough evaluation to identify discrepancies and establish guidelines that ensure equitable wages. Industry standards, qualifications, and the cost of living should be taken into account.
Lastly, fresh graduates often have limited bargaining power due to their lack of work experience and competitive skills.
Employers may exploit this situation by offering lower salaries, assuming that graduates are desperate to secure employment.
The unequal power dynamic between employers and fresh graduates contributes to the acceptance of low starting salaries.
The state of unions in Malaysia is relatively weak, with 770 trade unions and 993,000 members and a declining membership trend. The dilution of union power is one of the contributing factors to this situation.
With so many unions and a relatively small number of members, the collective voice to bargain and negotiate for better pay and working conditions has mostly been neutered.
Thus, to strengthen unionisation, there should be encouragement from civil society organisations (CSO), human rights groups and academics.
Collaboration with these stakeholders will help raise awareness, conduct research and address labour rights issues in the country.
Rather than urging fresh graduates to lower their expectations, it is crucial to address and resolve the structural wage problem in Malaysia realistically.
Aligning with Bank Negara Malaysia's recent call for an equitable living wage of RM2,700, we must strive to create a fair remuneration system that empowers and values our future workforce.
This proposed living wage serves as a benchmark for employers to work towards ensuring that fresh graduates are not undervalued or subjected to exploitative practices.
Aligning starting salaries with this benchmark will enhance the financial wellbeing and job satisfaction of young graduates and the overall labour pool.
Competitive starting salaries attract top talents, contributing to more skilled and motivated employees.
Moreover, fair compensation practices foster inclusivity and social mobility, enabling individuals from diverse backgrounds to pursue rewarding careers and achieve financial stability.
We should empower and value our young talents, ensuring a prosperous future for individuals and the nation as a whole.
Let us work together across sectors to create an environment where the skills, efforts and aspirations of fresh graduates are duly recognised and rewarded.
The writer is research analyst (Economy) at Institut Masa Depan Malaysia