5 Apr - 3 min read
Minister in the Prime Minister’s Department (Economy), Datuk Seri Mustapa Mohamed has commented that the starting salary for graduates entering the job market will likely increase within the next three or four months. This is as the country’s economy continues to recover from the negative economic impact caused by Covid-19.
According to the minister, the government knew of the lower starting salaries received by new graduates in 2020, attributing it to the adverse effect of the pandemic. “Last year, we experienced the worst economic recession in history, so job opportunities were low and, of course, the graduates were willing to receive lower salaries. We want Malaysians to enjoy higher wage and salary. It is a problem when the starting salary of graduates has not increased for 10 to 20 years,” he said.
Datuk Seri Mustapa also emphasised that the government intends to create more quality job opportunities, enabling new-employed graduates to enjoy higher salaries.
The president the Malaysian Employers Federation (MEF), Datuk Syed Hussain J.P. also concurred with Datuk Seri Mustapa Mohamed’s opinion that the situation will soon improve. He said that the lower starting salary for fresh graduates in 2020 was only temporary as the forecast for 2021 onwards is bright with the implementation of the National Immunisation Programme. With this, companies will be allowed to operate at full capacity and borders will also be opened.
“We believe all will soon return to normal. Graduates need not be too concerned by the current low starting pay as private sector employers value performances and once the employee begins to contribute and perform, they will be rewarded accordingly. The work experience will also make the graduates more marketable and more employable,” said Datuk Syed Hussain.
Datuk Syed Hussain further explained that the lower starting salary was caused by the financial constraints faced by employers amidst the Covid-19 economy. He shared that many employers were suffering from cash flow problems, with over 32,000 companies going out of business last year.
According to Datuk Syed Hussain, some businesses are still downsizing, and are also employing multi-skilling and multi-tasking efforts at work to continue operating. This is on top of other alternatives, such as implementing shorter-term employment, providing hourly pay, and outsourcing their non-core activities. In light of this, he said that having an employment – even at a lower starting pay – is a blessing these days.
Last week, the Department of Statistics Malaysia (DOSM) had reported that fresh graduates who entered the job market in 2020 received lower starting salaries compared to those who joined the year before. It was found that a majority of new degree graduates earned between RM1,001 to RM1,500 per month in 2020, compared to the average of RM2,001 to RM2,500 in 2019.
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