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Introduction
In 2020, Malaysian unemployment soared to alarming levels, attaining a 27-year high unlike anything seen in recent memory since 1993. The Labour Market Review by the Department of Statistics Malaysia (DOS) for the first quarter of 2021 indicates that the unemployment rate stands at 4.8%, showing no discernible improvement from a nearly identical rate in the fourth quarter of 2020. The alarming disparity between national averages and youth unemployment rates (15-24 years old) has also not improved; stagnating at levels of nearly three times higher in the fourth quarter of 2020 and in the first quarter of 2021.
We can reasonably expect the unemployment rate to rise in the second half of this year due to the implementation of the third nationwide lockdown (MCO 3.0) since 1 June 2021.
Youth and graduate employability have become increasingly important global issues. In addition to rapid labour market changes, the Covid-19 pandemic has further exacerbated the difficulties of the school-to-work transition for young people and graduates. Pauses in the demand for labour are typically characterised by recruitment cutbacks, less funding for training activities and reduced staff intakes via ‘last-in-first-out policies’. Additionally, the experience of continued unemployment at a young age would leave indelible, long-term scarring effects on career prospects, incomes and well-being. These problems emphasise the urgent need for intervention.
PEMULIH as a framework for reform
In the past year, the Government has been implementing austere pandemic policies which have inadvertently suffocated the economy. Such policies then necessitated concurrent rehabilitative government assistance to be rolled out; an effort to mitigate the negative impacts of the crisis. The latest assistance package, the Economic Recovery and People’s Protection (PEMULIH) programme was announced by the Prime Minister on 28 June 2021. Under its focus on employment and income loss assistance, PEMULIH extends an employment allowance to non-SOCSO contributors; benefitting fresh graduates, school leavers and workers in the informal sector. These groups will receive an allowance of RM300 to help them cope with financial pressures in the pandemic-stricken economy.
While this is a commendable step in the right direction, any strategy going forward must now look at extending these temporary relief measures as an enduring policy tool. Youth unemployment has long been a pervasive problem and, while Covid-19 has seen its exacerbation and subsequent government intervention, sustained support for youths to overcome employability challenges will be as important as ever.
A suggestion could be made to adopt this ‘job-seeker allowance’ approach for youths as a central tenet of policy planning moving forward. Pivotally, graduate allowances can alleviate some of the financial pressures and help ease youths into a smooth transition process. Considering the fact that youths typically lack the resources to kick-start their transition, particularly those from underprivileged families; an allowance would be instrumental in facilitating their progression. Such allowances are not new in the world. Australia notably provides ‘job seeker payments’ and ‘youth allowances’ for unemployed graduates and youths actively seeking work. To complement this approach, Malaysia could also bolster employment services in the form of job matching programs and streamlining access to labour market information. Inclusivity and accessibility are important in the continued support for graduates.
Appraising and refining MOHE-CAP
Following from this, the Government should provide an update on the Career Advancement Program implemented by the Ministry of Higher Education (MOHE-CAP). This program crucially endeavours to provide 20,000 graduates with job-matching, placement, entrepreneurship and gig work prospects. The MOHE-CAP program is a promising initiative from the Ministry of Higher Education; sustained interest in its development will be pivotal. With this in mind, it is important that the MOHE discloses how the program is progressing. Doing so would illuminate how effective it has been in reaching benchmarks, and thus guide how to proceed. If there is widespread interest and engagement with the initiative, the MOHE could further broaden the coverage and support to reach a larger pool of participants. It has been estimated by the Minister of Higher Education that approximately 116,000 graduates will have their employment disrupted in 2021; the 20,000 goal of the program is too modest.
Going forward, the Government can also look to entrepreneurship as a viable alternative pathway for graduates in light of employability struggles. Youths with an interest in exploring such pathways should be given the opportunity to do so and be supported by the Government. It is worth noting that the School-to-Work Transition of Young Malaysians (SWTS) survey findings are somewhat alarming, with only 22 per cent of respondents in tertiary institutions opting for self-employment, and only 3 per cent recognising entrepreneurial skills as a necessary competency to develop. A recent case study by a public university in Melaka also found that graduates prefer to be wage earners in both the public and private sectors, and are less inclined to be part of the gig economy or be self-employed. These findings are indicative of the fact that touting entrepreneurship to graduates as a panacea and pushing initiatives at a late stage in one’s education should not be the focus. Rather, there could be a concerted effort to foster interest from an early age.
Malaysia can look to emulate certain international initiatives, such as the International Labour Organisation’s Know About Business program, which promotes entrepreneurial opportunities, appraises the accompanying challenges, facilitates networking and provides mentoring. By instilling entrepreneurial mindsets and an awareness of what it entails from an early age, the Government can better prepare interested youths who may feel apprehensive or inhibited by a lack of support. This can also be achieved by reforming MOHE-CAP to be a platform with broader focuses and services, sustained policy support with targeted communication and recruitment aimed at both graduates and youths.
Long run measures
The Government can facilitate a symbiotic relationship between industry and universities to help young people understand job and career options, and to develop curricula which allow for smoother transitions from formal education into the world of work. Just as important, however, is career guidance for young people. The SWTS found that most students mainly make educational choices based on parental influence; which may not always be grounded in reality with updated information regarding employment opportunities and employability. In fact, findings from the 2018 OECD Programme for International Student Assessment further acknowledged that young people are forming unrealistic career prospect expectations. Trained counsellors armed with accurate information can reach out to young people at a stage in their lives where critical decisions are being made.
The existing labour market information network should be enhanced with easier access to job search portals, career guidance and job search counselling. Digitisation may exclude some from accessing employment services. Outreach to employment services should therefore sufficiently cover rural areas, especially Sabah and Sarawak. For instance, through a decentralised approach, employment services could use partnership arrangements with stakeholders at a local level to deliver services in smaller remote communities.
The Critical Occupations List is collated on an annual basis to monitor skills imbalances and to provide better coordination of human resource development in Malaysia; this should be widely publicised. It is an evidence-based list of occupations in Malaysia; reflective of the most sought after and hard-to-fill occupations by industry and identifies skill imbalances in the Malaysian economy. The list is intended to serve as a foundational database for companies, education, training institutions and the Government to implement strategies which foster, attract, retrain and upskill talent. What is needed is to better advertise and disseminate the list, while also putting it to better practical use. A forward-looking approach to anticipate and match skill needs is also important to ensure that the workforce is able to adapt to new technologies and changing work. Initial education is a cornerstone, but continuous lifelong learning is imperative for career advancement and to remain in work.
Conclusion
As the country seeks to rebuild stronger post-pandemic, it is essential to take into account the pressing needs of young people and ensure smoother transitions from education to the labour market. Urgent action is needed to help young people secure decent and sustained employment.
