16-06-2025
Youth unemployment needs more than MySTEP
Malaysia's growing youth unemployment rate is becoming a serious problem with significant ramifications for social cohesion and economic stability.
Over 13 per cent of Malaysians between the ages of 15 and 24 are now unemployed, contributing to high rates of poverty and depriving an increasing number of young people of financial stability. While the national unemployment rate hovers around 3.5 per cent, the disproportionate impact on younger individuals underscores the difficulties specific to this group.
Financial stress on young Malaysians
Underdeveloped career pathways, a lack of industry-aligned skills, and limited job opportunities all contribute to the challenges faced by Malaysian youth transitioning from school to the workforce. The job market is highly competitive for fresh graduates, particularly in sectors with strong demand but few entry-level positions.
According to data from the Department of Statistics Malaysia (DOSM), nearly half of recent graduates are employed in fields unrelated to their degrees and often earn below the national median wage – a situation known as underemployment. This trend stifles potential economic contributions and deepens financial hardship in young households, thereby prolonging poverty cycles.
Rising living costs only add to the pressure. In urban areas especially, young people struggle to meet their basic needs due to soaring expenses in housing, transport, and food.
The economic fragility of Malaysia's youth is evident. For instance, food prices alone have risen by 6 per cent in the past year. If left unaddressed, analysts warn this could result in a 'lost generation' trapped by unrealised potential, prolonged financial strain, and reduced social mobility.
Comparisons: Gaining insight from international approaches
Malaysia is not alone in its struggle with youth unemployment. While countries around the world face similar challenges, some have introduced innovative solutions that offer valuable lessons.
Germany, for instance, places significant emphasis on vocational training to tackle youth unemployment. Its dual education system – which integrates classroom learning with hands-on apprenticeships – has helped it maintain one of the lowest youth unemployment rates globally. This model highlights the importance of government–industry collaboration in ensuring steady employment pathways for young people.
South Korea has adopted a more targeted approach with initiatives such as the Youth Employment Support Programme, which equips job-seeking youth with relevant skills. The government-funded internships offered through this scheme give young people real-world experience in sectors like finance and technology. With a youth unemployment rate of 8.7 per cent, South Korea's success in empowering young professionals could inspire similar action in Malaysia.
Australia's Teenagers Allowance programme, which supports unemployed youth enrolled in full-time study or training, seeks to reduce youth poverty. This safety net not only facilitates skill development but also ensures basic living needs are met. By addressing both educational and employment requirements, Australia has managed to build a skilled workforce while lowering poverty among young people.
Malaysian government initiatives and policy suggestions
The Malaysian government is attempting to tackle youth unemployment through initiatives like the Malaysian Short-Term Employment Programme (MySTEP), which offers internships and placement opportunities to young Malaysians. However, critics argue that while MySTEP and similar schemes are commendable starting points, their reach remains limited. They do not sufficiently tackle root issues such as the lack of diverse entry-level jobs and the mismatch between graduates' skill sets and industry demands.
With the rapid pace of technological advancement and evolving industry needs, Prime Minister Datuk Seri Anwar Ibrahim has acknowledged the necessity for structural reform. 'We must give young Malaysians not just jobs, but the right jobs that will match their skills and improve their economic status,' he recently said.
Call to action
Malaysia's youth unemployment issue requires urgent and sustained attention. While some mechanisms are already in place, the mounting challenges faced by young Malaysians demand a more cohesive response involving public, private, and educational stakeholders.
Global examples show that it is possible to empower youth and insulate them from the impacts of poverty through bold, youth-centric policies. For Malaysia, adapting these international models to its local context could yield positive outcomes.
Therefore, a renewed commitment to smart policymaking and strong industry partnerships is vital, as youth unemployment poses a serious risk to the nation's economic resilience and future growth. Only through a collective and sustained effort can Malaysia unlock the full potential of its younger generations, reduce youth poverty, and shape a more promising economic future.
Datin Seri Professor Dr Suhaiza Hanim Mohamad Zailani is the director of the Ungku Aziz Centre for Development Studies, Universiti Malaya.
The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.
