Sim: Structural flaws, weak economy behind low graduate wages

New Straits Times

23-05-2025

SHAH ALAM: The growing concern over university graduates earning below RM3,000 a month stems from a deeper, structural flaw in Malaysia's economy, says Human Resources Minister Steven Sim.
He said if the country's economic value improves, university graduates will have better chances at securing jobs with fair and appropriate salaries that reflect their qualifications.
"The economic pattern over the past 20 to 30 years has resulted in society being in a middle-income trap.
"One paradox is that every year, we produce 300,000 university graduates, and another 100,000 TVET graduates – a total of 400,000 highly educated Malaysians.
"But each year, our economy is only able to generate 50,000 high-skilled and high-value jobs. There's a clear gap — that's why we call it a paradox.
"What we must do now is raise our economic value so that companies in Malaysia can create more high-value jobs," he said.
Sim said this during a press conference after officiating the Central Zone-level handover ceremony for the 2025 Trade Union Affairs Programme Assistance (PHEKS) here.
Sim said concerns over graduates earning salaries that do not match their qualifications had been raised before, and the government had taken steps through the introduction of the Progressive Wage Policy.
"This wage guideline is not mandatory, but we encourage employers to adopt it. For instance, it outlines what a fair starting salary should be for an engineer.
"This is the first time such a guideline has been published. It creates awareness and helps establish a clearer benchmark for salary negotiations within the market."
Sim also encouraged workers to join trade unions so that salaries and other benefits can be fairly negotiated with employers.
Previously, it was reported that over 65 per cent of degree holders in Malaysia earn less than RM3,000 per month, resulting in a "just enough" income with little room to save, invest, or climb the social ladder.
In addition, over 70 per cent of graduates are reportedly working in semi-skilled or low-skilled sectors.
These findings were part of the Malaysia Labour Market Insight Series study titled "The 'Barely Enough Salary' Economy: When Higher Education Becomes an Economic Risk".