Has Unemployment Really Dropped?

According to the Department of Statistics Malaysia (DOSM), the number of unemployed persons fell below 700,000 in November 2021, the first time since March 2020.

This was a decrease of 1.5% month-on-month (m-o-m) to 694,400 persons, compared with 705,000 in October 2021, said chief statistician Datuk Seri Dr Mohd Uzir Mahidin. 

The labour force situation in November 2021 held steady with continuing employment growth reducing the number of unemployed persons as the revival of more economic and social activities stimulated a positive vibe for the labour market. 

November also saw another five states moving into Phase 4 of the National Recovery Plan except for Kelantan and Sarawak, which were still in Phase 3. 

By economic sector, the upward trend of employment in the services sector persisted mainly in wholesale and retail trade, food and beverage services, as well as transport and storage activities.  A similar trend was observed in the manufacturing and construction sectors, while employment in the agriculture and mining and quarrying sectors continued to decrease. 

By the duration of unemployment, 55.7% were unemployed for less than three months, while 7.8% were those in long-term unemployment of more than a year. For those who believed that there were no jobs available or were inactively unemployed, the number dropped 2.5% to 112,600 persons (October 2021: 115,400 persons). 

Youth unemployment rate for age 15 to 24 years reduced by 0.2 percentage point to record 13.7% after registering 13.9% since August 2021. But unemployment rate of youth aged 15 to 30 years recorded an increase of 0.1 percentage point m-o-m to register 8.2% (October: 8.1%).

The key point above is youth (age -15-24) unemployment is close to 14%! And that is a social cost. Those who have completed secondary or tertiary education may face unemployment. Why? Mismatch of skill sets, language (oral/written) fluency especially English is poor, and many have a laidback attitude to work. So, some end-up as Grab drivers or food delivery riders. Jobs that they had not envisaged when they started their tertiary programme. There is nothing wrong being a Grab driver or a food delivery rider, but some are over-qualified for sure. 

To live in an urban setting, you need a living wage of RM2,700. That’s according to BNM.  And starting salaries of graduates in some places are below RM2,500. How could they survive even if they do get a proper job?

Reference:

DOSM: Number of unemployed persons below 700,000 for first time since March 2020

Syafiqah Salim, TheEdgeMarkets, 11 Jan 2022