Najib: How did govt allow fresh grads' salaries to fall below minimum wage?

Yiswaree Palansamy
·4-min read
Datuk Seri Najib Razak at the 2021 Umno annual general assembly in Kuala Lumpur March 27, 2021. ― Picture by Hari Anggara
Datuk Seri Najib Razak at the 2021 Umno annual general assembly in Kuala Lumpur March 27, 2021. ― Picture by Hari Anggara

KUALA LUMPUR, April 2 — Former prime minister Datuk Seri Najib Razak today expressed alarm at a recent news report that found the salaries of fresh graduates have now fallen below the government's set minimum wage of RM1,200.

News portal The Malaysian Insight yesterday quoted chief statistician Datuk Seri Mohd Uzir Mahidin as revealing that new graduates, who joined the job market last year, had received lower pay than the previous year, with most getting the absolute lowest salary allowed by law.

He said that fresh degree graduates recorded a decrease in monthly income where the majority earned between RM1,001 and RM1,500 in 2020 compared to between RM2,001 and RM2,500 in 2019.

He reportedly said that the Covid-19 pandemic also caused a lower labour force participation (LFPR) among the group.

Citing the Wage Report 2020-2021 by the International Labour Organisation (ILO), Uzir explained that in an economic downturn, the data on average wages could be distorted due to the “composition effect” or major changes in employment.

"How did this happen? The minimum wage fixed by the government is RM1,200 a month. However, the Statistics Department said that the starting salary for graduates dwindled last year to between RM1,000 and RM1,500 in 2020, compared to RM2,001 to RM2,500 in 2019.

"How is it that the salaries of graduates are lower than the minimum wage set by the government? Where did government enforcement go?

"That too, provided that the fresh graduates successfully get employed, as the unemployment rate of graduates has further increased to 13.5 per cent in January 2021- that is a 0.3 per cent increase compared to that December 2020. Those who are graduates receive a salary of RM1,000. What then is the fate of youths who are not graduates?" Najib questioned.

The former finance minister took the Perikatan Nasional (PN) government to task, “crediting” the low salary issue of graduates to the sluggish inflow of foreign investments into the country.

He said that from a nation which received the highest foreign investments in 2017, Malaysia is now in the lowest rung among its other Asean counterparts, who have outperformed it.

"There are also low investments from investors throughout the seven months during which the Emergency was enforced and the Federal Constitution suspended, as they felt unsafe. Malaysia is the only country in the world which suspended its Constitution and halted Parliament, justifying it as a bid to contain Covid-19," he said, pointing out that businesses such as Sony, Silverstone, Hyundai, T-Systems and IBM have already shuttered their operations here.

He said that despite the government's justification of the pandemic, the number of cases here still hover well above 1,000 cases daily, opining that Malaysia is now the worst in Asean when it comes to combating the Covid-19 pandemic, in terms of population.

"Last year was already terrible because of the pandemic. This year, seven of the 12 months are gone owing to the Emergency. Think about the fate of our graduates and youth. Annually, over 400,000 fresh graduates enter the labour market. In two years, there would be 800,000 youths.

"Can one bear allowing our youth and fresh graduates to just accept salaries which are much lower than the minimum wage, or not having the opportunity to seek jobs and careers which are to their liking?" he asked further.

In The Malaysian Insight report, Uzir said that preliminary data also showed about two-thirds of countries saw slower average wage growth in the first half of 2020.

According to the Ministry of Higher Education, Malaysia recorded 318,593 graduates in 2020, lower than the 346,686 in 2019.

“Malaysian graduates comprised 95.8 per cent (305,301) in 2020, a 7.6 per cent drop compared to 2019 (330,557).

“The graduates’ employability, which encompassed employment, continued study, skills improvement and waiting for a job placement, was at 84.4 per cent,’’ explained Uzir.

However, he said that the overall LFPR of 83.9 per cent last year was marginally above 2019’s 83.5 per cent, adding that for the young age group of 24 years and below, the LFPR was at 64.8 per cent in 2020 compared to 70.2 per cent in 2019.

Last year, the government raised the country’s minimum wage to RM1,200 while the minimum hourly wage is set at RM5.77.

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