MOHR: Unemployment Rate Expected To Ease To 4.3% In 2021
Author Avatar

(Image: The Malaysian Reserve/Muhd Amin Naharul)

The Ministry of Human Resources has projected that the annual unemployment rate will improve from a historic high of 4.5% in the previous year due to the Covid-19 pandemic, to between 4.2% and 4.3% in 2021.

Despite the positive forecast, Human Resources Minister Datuk Seri M Saravanan said that there are still several concerns that continue to hinder the growth of Malaysia’s labour market. These include a mismatch between qualifications and job opportunities, as well as slowed career growth and salaries. To also note, this projection by the Ministry of Human Resources stands higher than the Prime Minister’s Office (PMO) target of lowering the unemployment rate to 3.5% for 2021.

(Image: Malay Mail/Yusof Mat Isa)

“The ministry will continue to monitor the local labour market and give attention to the appropriate intervention programmes to stimulate recovery and drive the labour market’s efficiency,” said the minister in a statement, in conjunction with the release of the Quarterly Labour Market Perspectives – Modest Labour Market Recovery report for the fourth quarter (Q4) of 2020. The report was published by the EIS-UPMCS Centre for Future Labour Market Studies (EU-ERA).

Based on the report, Datuk Saravanan said that Malaysia’s labour market recorded a moderate improvement in Q4 of 2020, which is attributed to the relaxation of movement restrictions. This is as the Malaysian government replaced the movement control order (MCO) with conditional MCO (CMCO) in several states.

(Image: Malay Mail/Firdaus Latif)

“The loss of employment rate in the private sector is also reduced for the quarter, while work placement for categories including the professionals, managers, executives, and technician roles increased,” said Datuk Saravanan, adding that the labour market recovery recorded a “trapezoid” pattern. Essentially, this pattern reflected an imbalance between job seekers and job opportunities that are available.

The minister further said that this imbalance, which sees an excess of job seekers, must be properly addressed as a wider gap could develop due to the rate of new employees entering the market. “The job creation for salaried employees only grew at a rate of 1.1% compared to 7.5% in the same quarter of 2019. Salaried workers comprised 77% of the total workforce in Malaysia in 2019, and slower job creation under this category was the major contributor to the unemployment rate in the country,” he went on to explain.

On top of that, the report also pointed out several disruptions in the labour market that arose from this pandemic, including the possibility of structural transformation that could worsen the labour market imbalance.

unemployment job search

(Image: Focus Malaysia)

“Some of the jobs that disappeared will not come back. The current structural transformation of the labour market is affected by digitalisation and automation of jobs. Some skills may no longer be required for new jobs. The discrepancies between the employers’ demand and the skills of labour explain the large number of employed persons with mismatched skills and unemployed people who did not get appropriate jobs,” noted the report.

Finally, the report also compared the severity of the Covid-19 pandemic’s impact on the labour market in comparison to the Asian financial crisis in 1997. “Although the impact on economic growth during the pandemic is less severe than the Asian financial crisis, the pandemic has a more profound impact on the labour market. Malaysia was able to maintain an unemployment rate of 3.2% that was induced by the Asian financial crisis. However, the pandemic has resulted in thousands of people losing their jobs and income, increasing the unemployment rate to 4.5% in 2020,” the report stated.

(Source: The Malaysian Reserve)

0 0 votes
Article Rating

SHARE

Comments (0)

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Top Personal Finance News Articles
Post Image
Petrol Price Malaysia Live Updates (RON95, RON97 & Diesel)
The RinggitPlus Team
- 20th October 2021
We provide weekly updates on every Friday at 5pm on the prices of RON95, RON97 and Diesel in Malaysia and a chart that shows the movement of fuel prices across a 6-week period. Bookmark this page now!
Post Image
Shopee Introduces SPayLater, Lets Users Buy Items Now And Pay Later
Alex Cheong Pui Yin
- 18th January 2021
Shopee has introduced a new payment feature that lets its Malaysian users purchase items and pay for them […]
Post Image
Touch n Go RFID: What Malaysian Road Users Need To Know
Jacie Tan
- 10th August 2018
Everyone’s talking about Touch ’n Go RFID being used at Malaysian highway tolls soon – here’s what you need to know about it.
Post Image
Best High Interest Savings Accounts In Malaysia (October 2021)
Pang Tun Yau
- 6th October 2021
Make your money work for you by depositing them into the best high-interest savings accounts in Malaysia!

Related articles

Related Posts Image
Related Posts Image
Related Posts Image

Apple Launches A RM99 Polishing Cloth

Jacie Tan -
2nd February 2021
Related Posts Image