LETTERS: THE Department of Statistics Malaysia (DOSM), at the end of last month, revealed the status of unemployment in Malaysia between 2020 and March 2021.
Unsurprisingly, the unemployment rate has significantly risen due to the fall in local production outputs, low consumption demand, diminishing business activities and reduction in international trade activities, caused by the Covid-19 outbreak, which forced the authorities to implement the first Movement Control Order in March last year.
The unemployment rate for last year was at 4.5 per cent, an increase of 1.2 per cent from the preceding year (3.3 per cent in 2019). Based on past records, our unemployment has always hovered around three per cent, indicating a stable, natural unemployment rate (3.3 per cent in 2018, 3.4 per cent in 2017 and 2016, and 3.1 per cent in 2015).
The most staggering jobless position, however, was among the youths. According to DOSM, youth unemployment, those aged between 15 and 24 years, is at 12 per cent.
This means 314,000 youths were unemployed last year, an increase from 10.5 per cent the previous year.
The latest figures in March this year showed that unemployment rate was at 13.4 per cent or involving 321,100 youths. Before assessing further, we have to understand a few basic things:
FIRST, it is very common for youth unemployment to be the highest among jobless groups of people in most of countries around the globe.
In the United Kingdom, the Office of National Statistics revealed that youth unemployment for March was at 14.3 per cent (581,691 people), while in the United States, the Bureau of Labour Statistics reported 11.1 per cent of youth unemployment.
In Indonesia, the rate almost reached as high as 25 per cent. Last but not least, the Organisation for Economic Cooperation and Development countries recorded an average of 13.3 per cent of youth unemployment in the same month.
SECOND, most of the youths have to undergo "unemployment period" because of some logical reasons.
They may have just graduated and are looking for suitable jobs to match their interests. They may also lack experience and are not able to be immediately recruited by employers.
However, those factors only suggest why youth unemployment rate is generally higher than the national unemployment rate.
What is worse is that the youths are getting the lowest salary rates.
A study by the Higher Education Ministry showed that fresh graduates' salary had ranged from RM1,001 to RM1,500 per month for the past 10 years!
This is shocking since it is nearly close to the minimum wage of RM1,200 per month. Such a low wage bracket and rising cost of living contribute to lower fertility rates among Malaysian women and the reduction in the size of households.
Women's fertility rate dropped to 1.8 per woman (translated to two children produced on average by a mother during her fertility age) and household size was at 3.9 (around or nearly four persons in a house, including parents).
This is a worrying trend. There should be urgent efforts to address this issue. Perhaps one solution is to follow Thailand's move by providing more opportunities for youths to open up businesses in the street.
As youths have to wait a longer time for firms to hire them during this pandemic, such business opportunies would allow them to gain income and experience for future employment.
This has enabled Thailand to have the lowest unemployment rate in the world at only one per cent.
Wan Omar Fadhli Wan Mahmud Khairi
PhD Candidate (Economics), International Islamic University Malaysia
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times