Poor data, policy gaps hurt graduate salary growth

PUTRAJAYA: The stagnation in graduate salaries over the past two decades has been attributed to the lack of complete and comprehensive data on the labour market and higher education.
Malaysian Inclusive Development and Advancement Institute (Minda-UKM) director Professor Tan Sri Dr Noor Azlan Ghazali said that without a centralised and integrated data system, policymakers face significant challenges in formulating accurate and effective policies, particularly in addressing wage stagnation and graduate underemployment.
He said the availability of comprehensive data is crucial for crafting more effective employment and education policies, as well as intervention strategies.
He said the real issue that is often overlooked is that many graduates today are employed in jobs that do not match their qualifications or skills.
"We often hear claims of demand for tens of thousands of engineers, but actual data shows that only around 30,000 to 40,000 high-skilled jobs are created, while our universities produce over 300,000 graduates each year.
"But the question is, where do all these graduates go? As a result, many either seek opportunities abroad or are forced to accept jobs that fall below their qualification levels.
"This, in turn, leads them to compete with foreign workers in low-skilled sectors, further contributing to issues such as rising living costs and imbalances in the labour market," he said when met at the One-Year Retreat Session following the 2024 Bumiputera Economic Congress.
Previously, a report by the PNB Research Institute (PNBRI), titled Entry-Level Salary Trend in Malaysia: Insights from Private Sector Employment (1997–2022), revealed that the median salary for Malaysian degree holders has declined over the past 25 years, falling from 2.7 times the salary of SPM holders in 1997 to just 1.7 times in 2022.
Meanwhile, Noor Azlan added that, based on available data, job creation within the industrial sector remains relatively low compared to the number of graduates produced annually by the country's institutions of higher learning.
He also warned that the issue of stagnant graduate salaries could have long-term consequences for the national economy, with one of the most concerning outcomes being growing public scepticism about the value of higher education.
He said the perception that attending university no longer guarantees a secure future could discourage individuals from pursuing further studies, even though education should be regarded as a long-term investment in developing high-quality human capital.
"There is nothing wrong with someone choosing to work early to gain experience, but if that decision stems from a loss of confidence in the education system, then that is truly worrying.
"Knowledge still matters. We must understand that to become a developed nation, society must value education and knowledge," he said.

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