What caused the 22.5% rise in unemployed graduates in 2020?

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Unfavourable Economic Environment Led to 22.5% Rise in Unemployed Graduates in 2020

The number of unemployed graduates in Malaysia saw a significant increase of 22.5% in 2020, reaching 202,400 individuals compared to 165,200 in the previous year. This rise is attributed to an unfavourable economic environment that impacted the overall labour market situation. Consequently, the graduate unemployment rate climbed by 0.5 percentage points to 4.4% in 2020, up from 3.9% in 2019.
Economic Downturn as Primary Driver

The Chief Statistician, Datuk Seri Mohd Uzir Mahidin, explicitly linked the surge in unemployed graduates to the challenging economic conditions experienced in 2020. This adverse economic climate had a cascading effect on the broader labour market, leading to fewer employment opportunities for those with higher education. The data indicates that over 75% of these unemployed graduates were actively seeking work, with a substantial portion having been jobless for less than three months.
Shift in Employment Categories and Underemployment

While the number of employed graduates in skilled occupations, which includes professionals and associate professionals, decreased by 0.8% in 2020, the semi-skilled category saw a notable gain of 19.3%. This shift means that 28.9% of employed graduates were in semi-skilled roles, and 2.3% were in low-skilled occupations. Graduates in these semi-skilled and low-skilled positions are classified as experiencing skill-related underemployment, as their jobs do not fully align with their educational qualifications.
Sectoral Distribution and Salary Trends

The services sector continued to be the primary employer of graduates, with over 75% of the 4.35 million employed graduates working in this area. The manufacturing sector followed, employing 14.6% of graduates. Concurrently, there was a marked decrease in the mean monthly salaries and wages for graduates, falling by 10.6% to RM4,489 in 2020 from RM5,020 in 2019. Degree holders experienced a 9.1% reduction in their average earnings, while diploma holders saw an 11.5% decrease. The skilled category recorded the largest decline in average salary, by 8.0% to RM5,316.

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What caused the 22.5% rise in unemployed graduates in 2020?

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