The Malay Mail wrote 21 hours ago, as of writing this article, that between January and May of this year, nearly 39,000 job losses in 5 months, with those aged between 25 and 39 being the hardest hit. The apparent citation for these job losses was, as the Malay Mail article put it: “due to business restructuring and operational adjustments by companies”. As a result of this, there is about a two-in-five chance [or approximately 40%] that these laid-off workers, between 25 and 34 years of age, would end up underemployed, according to recent findings by the Department of Statistics Malaysia (DOSM) - and this poses an existential threat to our high-growth nation [5.4% GDP growth in Q1, according to Bank Negara] because the growth of the economy does not benefit everyone. In this article, I will present three points: the definitions, the political framework and the current situation for better understanding, the path forward for addressing these structural issues and concluding thoughts.
Definitions, Political Framework And Current Situation
Undermployment, according to a journal article published in the Epitome of Nature (EON), is defined as “a situation where individuals are employed but not fully utilized in their jobs, often due to working fewer hours than desired or being in positions that don't match their skills or education level”. There are two main factors of underemployment: time-based and skills-based.
Time-based underemployment refers to employees who work fewer hours due to insufficient work. They are classified based on three criteria, according to a journal article published entitled “Analysing and forecasting the underemployment trend in Malaysia” in the International Journal of Social Science and Economic Research. A person falls into this category if they meet three simultaneous criteria during the reference period: (a) A person who was willing to work additional hours (i.e. wanted another job (or jobs) or was willing to swap job roles for more hours; (b) A person who was available to work additional hours and (c) A person who worked less than a threshold relating to working time. This constitutes about 0.7% of the working population, which is absolutely fine and not a worry at all.
Skills-based underemployment is more nefarious and structural. DOSM defines skills-based employment as: “Those with tertiary education and working in the semi-skilled and low-skilled categories” under their latest monthly labour force statistics report - in April 2026. In a more holistic and “bigger picture” report done by DOSM - the Labour Force Survey Report, First Quarter 2026 mentioned that while skill-related underemployment remained relatively stable at 1.93 million people, the rate dropped by 0.1%. The issue with that is that the skills-based underemployment rate is still north of one in three, clocking in at 35.2%. For context, every 352 out of every 1,000 graduates find themselves precariously in a spot where they are not unemployed, but they aren’t utilising their university degree to the maximum potential.
Yet, even as the Star Newspaper reported that the World Bank’s senior economist for social policy, Matthew Dornan, mentioned that “Skill-related underemployment is holding Malaysia back from achieving its full growth potential”, even going so far as to say that “It is a demand-side problem – businesses are not creating enough high-productivity jobs to absorb what is an increasingly educated workforce – though skills mismatches and capability gaps compound the challenge”, the Malaysian Government’s efforts are uneffective and misguided indeed. Instead of focusing on the demand side of the basic economic problem, they are more focused on the supply side - with there being a disproportionate focus on metrics over job quality, as shown with KESUMA heavily publicising training numbers as a badge of success, as reported by the Malaysian Reserve. Additionally, the emphasis on resources being funnelled into the Upskilling Ecosystem - whereby the Government keeps on dumping resources into TVET improvement and reform programmes, as reported by the Asia Pacific Career Development Association - seems like there’s just more emphasis on creating an intelligentsia class without securing the jobs needed for them to justify the piece of paper that feels like a traditionally big achievement in society.
As a result, due to the misguided nature of Government policy, the reality is that there are simply not enough jobs to be filled - as reported by Human Resources Online. This is leading to our brain drain epidemic, with the World Bank reporting that “Skill-related underemployment has a significant impact on wages: tertiary graduates who are underemployed face a wage penalty of 49.3 per cent”, leading many to move abroad and take their talents and ideas with them as well. This lowers the number of people able to advance the country forward into a high-skilled, high-productivity nation - leading us to be stuck in the wage trap where low wages lead to more welfare programmes, causing us to lose money that should be directed to investment which leads to even more job openings in small and medium enterprises that cannot afford need a bunch of overqualified intelligentsia - expecting high pays to be running operations, leading to low wages and the vicious cycle continues.
Despite the poor performance in employment terms, the Malaysian Government is adamant on sticking to its pro-business policies, frequently defending Mahathir’s neoliberal policy that forced us to work for lower wages - which is incompatible with the needs of the Malaysian intelligentsia. While the state frequently boasts of its historically low unemployment rates, the true economic reality is no longer defined by who has a job, but by whether employed professionals are compensated fairly for their qualifications. However, a new path can be forged which the Government must take to truly foster an attractive place for the intelligentsia to thrive.
The Path Forward
The State is there to protect its people. It is there to intervene when situations are unfavourable to a lot of the population - not necessarily a majority. Therefore, it is imperative that the State be the employer of last resort when it comes to high-skilled jobs, giving people jobs when the private sector fails to do so. This can take the form of many kinds of jobs.
For starters, administrative and science graduates can be placed in public hospitals to reduce wait times and expand preventative care. For example, in rural hospitals, understaffing, as reported by CodeBlue, remains a systemic issue that delays the treatment of our citizens. In addition, due to lower health literacy, there is a Non-Communicable Disease (NCD) Crisis amongst the population that can be addressed via improved staffing by administrators, pharmacists and doctors amongst other types of professionals.
Next, deploy more engineering and technical graduates to build, maintain, and manage state-owned solar, wind, and tidal grids under Tenaga Nasional Berhad. In order to foster a strong energy transformation into a sustainable green economy, there needs to be a stronger emphasis on producing more renewable energy at home. Right now, as reported by Reuters, Malaysia imports around 30 million to 35 million tons of coal a year, which costs the Malaysian Government around $5 billion to $6 billion a year, which is unsustainable and bad for the environment. However, creating green energy jobs at home can foster energy independence while also caring for the people because Government jobs are traditionally a social safety net and the environment - which are all wins in my books!
These schemes and a lot more, tailor-made to each job title, of course, can help us protect and retain talent while making Malaysia a greener and sustainable economy in the future - which can help propel us into “first-world economy” status. The resources and tools are here; it just depends on who is working on the tools, or in Putrajaya, of course.
Concluding Thoughts
The Government’s plan is misguided. Trying to improve supply when the supply is overwhelming is very questionable at the best of times. Government intervention is needed to ensure everyone gets a fair go at life, liberty and the pursuit of sustainability and stability in their professional and personal lives. The Government must turn away from Mahathir-era neoliberalism and embrace solidarity with working people and provide the jobs that are not only lacking in the Malaysian economy, but also those created by their supply-side policies.
Timothy (timothytanyeantim@gmail.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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