Graduates in the wrong jobs: Experts push for urgent reforms
Their concerns follow findings by the PNB Research Institute (PNBRI), which revealed that although higher qualifications have consistently commanded better salaries over the past 25 years, the rate of starting salary growth has been more significant for those with lower levels of education.
"In some cases, we are seeing degree holders unable to secure suitable employment and being forced to accept roles intended for SPM-level qualifications.
"This should not be happening and indicates a clear mismatch in the labour market," said Dr Ida Md Yasin, economist at Universiti Putra Malaysia Business School.
She also described it as "disheartening" that entry-level salaries for graduates had not increased substantially compared to those of SPM holders over the last two decades.
"We know that many students pursuing higher education must take out loans to fund their studies.
"Imagine spending four to five years at university for a bachelor's degree, only to earn a salary barely higher than that of someone with only secondary school qualifications.
"It simply does not seem worthwhile, especially when a portion of that salary must go towards repaying student loans," she said.
Echoing her concerns, Dr Mohamad Idham Md Razak, coordinator at the Malaysian Academy of SME and Entrepreneurship Development, Universiti Teknologi Mara, said the declining returns on higher education in Malaysia highlighted deep-rooted structural issues within the economy and labour market.
He stressed that this trend should not be interpreted as proof that higher education no longer facilitates social mobility.
Rather, he said, it underscored a mismatch between the supply of graduates and the availability of high-skilled jobs.
"Contributing factors include the expansion of low-value-added job sectors, dependence on foreign labour, and a persistent skills gap between graduates and industry demands.
"Higher education remains vital for social mobility, but it must be better aligned with market needs and reinforced by policies that encourage the creation of quality jobs," he told the New Straits Times.
Idham also called for greater collaboration between the government, higher education institutions, and employers to ensure investments in higher education remained relevant and impactful.
Commenting on the rising salaries and employability of Technical and Vocational Education and Training (TVET) graduates, he said this clearly demonstrated TVET's strong potential as a practical pathway for school leavers — especially amid increasing demand for technical skills across industries.
However, he cautioned that for TVET to become a mainstream option, it must be supported by robust infrastructure, recognised certification, and clear career pathways.
"Effective policies such as the National TVET Plan 2030, alongside close cooperation with industry, are essential to enhance TVET's appeal and relevance to students and parents.
"Moreover, active industry involvement in curriculum development and the provision of competitive wages are critical in dispelling the notion that TVET is a second-class option," he added.
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