Low Monthly Wage Has Become the Norm for Local Fresh Graduates

According to Ministry of Higher Education (MoHE) surveys, at least 10% of Malaysian graduates with Bachelor's degrees have been receiving a monthly income of between RM1,001-RM1,500 since 2010. 

In 2020, more graduates dropped into this income bracket compared to others, with the graduates earning between those amounts reached a decade-high value of 22.3%. 

The MoHE yearly surveys track the monthly income of graduates with first degrees, including those who earn below RM500 or RM1,000 monthly and those who earn over RM5,000 monthly. 

2020: The gap widened

The RM1,001-RM1,500 category recorded its highest-ever point in 10 years with 22.3% of 71,108 degree graduates.

Basically, the proportion of degree graduates who earn as low as RM1,001 increased by half since 2010. Yet, the percentage of graduates in the bracket has shifted for the past few years.

Back then, the percentage of degree graduates with a monthly income of RM1,001-RM1,500 steadily floated above 14% (in 2010 and 2011) and over 13% (in 2012 and 2013). It then climbed to 15.1% in 2014, dipped to 10.6% in 2015 and climbed again to 15.9% in 2017 and 18.2% in 2019. 

Source: Ministry of Higher Education

Now, more degree graduates are earning RM1,001-RM1,500 than ever

From 2010 to 2020, there is a growing trend in both the proportion and the number of graduates earning in that income bracket, which peaked in 2020.

In comparison, from 2014 until 2019, the largest proportion of the graduates had earned between RM2,001-RM2,500. It even reached a higher income bracket of RM3,001-RM5,000 in 2015. 

It was a marked growth from 2010 to 2013 when the most significant proportion of graduates earned between RM1,501-RM2,000.

But in 2020, it had drastically decreased, with the RM1,001-RM1,500 bracket becoming the biggest category. 

In the year 2020, about 15,857 graduates fell within the RM1,001-RM1,500 bracket.

MoHE's surveys say the number of graduates earning between RM1,001-RM1,500 has increased from 7,082 out of 47,850 surveyed in 2010 (14.80%) to 15,722 out of 86,386 respondents in 2019 (18.19%).

Comparison with the minimum wage

The Malaysian government first announced the idea of a national policy for minimum wage in July 2012. It then led to the 2013 minimum wage implementation of RM900 monthly in West Malaysia and RM800 monthly in East Malaysia.

The government increased the minimum wage in July 2016 to RM1,000 in the peninsula and RM920 in East Malaysia. It grew further in January 2019 to a national rate of RM1,100.

In February 2020, the national rate of RM1,100 continued to apply, except for 56 locations, including Kuala Lumpur, where the government increased the minimum wage to RM1,200.

The government updated the national poverty line in July 2020 to RM2,208. It means that households with a monthly income below this amount are considered poor households. 

In a March 2018 paper, Bank Negara Malaysia's (BNM) provisional estimates for monthly living wage levels in 2016 in Kuala Lumpur:

• RM2,700 for an unmarried adult,
• RM4,500 for a married couple,
• RM6,500 for a married couple with two children.

BNM provided the estimates to show the concept of a living wage, which is not legally binding but only reflects the wage levels for a "minimum acceptable living standard".

Do these numbers matter?

As of recent, the public has been focusing on a news report quoting the Statistics Department as saying that degree graduates recorded a drop in monthly income where a "majority" of them earned RM1,001-RM,1500 in 2020 as compared to RM2,001-RM2,500 in 2019. 

It was especially shocking to Malaysians as it hinted that there could have been fresh graduates paid the minimum wage as a starting salary in 2020. 

The Human Resources Minister clarified that the Social Security Organisation's Employment Insurance System (EIS) data showed more employers complied with the minimum wage rate. Only 8.8% of workers hired in Q4 2020 were paid basic wages below the minimum wage rate. 

Source: Malay Mail

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