What caused the overall drop in Malaysian salaries across education levels?

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The Covid-19 Health Crisis Weakened Labour Demand, Leading to Salary Declines Across All Education Levels in Malaysia

The overall decrease in Malaysian employees' median and mean monthly salaries in 2020 was primarily attributed to the severe impact of the Covid-19 health crisis. This unprecedented global health emergency significantly weakened the demand for labour within Malaysia, creating a more competitive job market. Consequently, jobseekers, including recent graduates, were compelled to accept available positions for their livelihood, often disregarding their qualifications and driving down average remuneration across all educational attainment categories.
Weakened Labour Demand Drove Jobseekers to Accept Less Favourable Terms

The Covid-19 pandemic's disruption to the Malaysian economy led to a substantial reduction in the overall demand for labour. This economic downturn intensified competition for available positions, forcing many individuals, particularly those with higher education, to accept roles that might not align with their qualifications or previous salary expectations. The Department of Statistics Malaysia (DoSM) noted that this scenario was a direct consequence of the health crisis, pushing jobseekers to prioritise securing employment for survival.
Significant Salary Reductions Observed Across All Educational Attainments

The impact of the weakened labour market was evident in salary figures across the board. For individuals with tertiary education, the median monthly salary fell by 10.3 per cent from RM3,901 in 2019 to RM3,499 in 2020. Those with secondary education experienced a 16.6 per cent decrease, with their median salary dropping from RM1,955 to RM1,630. The most substantial percentage decline was seen among those with primary education, whose median salary decreased by 18.3 per cent from RM1,560 to RM1,274. Even those with no formal education saw a 13.9 per cent drop, from RM1,436 to RM1,237.
Mean Salaries Also Experienced a Widespread Decline

Beyond median figures, mean monthly salaries also reflected the widespread economic pressure. The mean salary for the tertiary education category declined by 10.2 per cent to RM4,171 in 2020. For secondary education, the mean salary fell by 10.4 per cent to RM2,125. Those with primary education saw their mean salary decrease by a significant 19.3 per cent to RM1,556, while the formal education category experienced a 10 per cent drop to RM1,447. This broad-based decline marked a departure from the consistent upward trend in salaries observed since 2010.
Increased Unemployment and Business Adjustments Contributed to Salary Drops

The economic fallout from Covid-19 also led to a rise in Malaysia's unemployment rate, increasing from 3.3 per cent in 2019 to 4.5 per cent in 2020. In response to operational challenges and reduced business activity, some companies resorted to wage cuts or placed employees on unpaid leave. These measures, combined with the heightened competition for fewer available jobs, collectively contributed to the overall downward pressure on salaries across nearly all sectors and demographics.

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What caused the overall drop in Malaysian salaries across education levels?

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