Centre For Future Labour Market Studies

Despite producing skilled labour every year in large numbers from local and foreign universities, the problem of fully meeting the demand for skilled labour still exists. This raise question: where does this skilled labour go?

Many skilled workers prioritize wage considerations and concern on achieving work-life balance. They frequently seek higher wages that suits with their skills. The Ministry of Investment, Trade and Industry (MITI) notes that low wages are a key factor in the shortage of local skilled labour, particularly in manufacturing sector and professional, scientific and technical industries. In Q1 2024, a total of 1.93 million labourers are working below their qualifications (Department of Statistics Malaysia, 2024)

If this problem is not prevented in the long term, due to lack of skilled workers, thereby potentially hindering Malaysia's economic growth prospects. Given this issue, what measures should the government consider implementing to address this problem effectively?

Share your thoughts with us.

The transition to targeted diesel subsidies in Malaysia is a strategic move aimed at enhancing fiscal efficiency. Economists project this change could save the government expenditure up to RM8 billion. These savings can be redirected other initiatives like cash assistance and improvements in education and health facilities.

There is concern among the public, particularly consumer, about the non-subsidized diesel price at RM3.35 per liter, as this is expected to lead to high price of goods and services. Previously, the subsidized diesel price was RM2.15 per liter indicates a significant increase at 55.8% of diesel prices in Malaysia. However, SME Bank reports that inflation has could rise by 0.1%, indicating that the focused subsidy approach and gradual implementation have effectively contained inflationary pressures.

The transition of subsidized to non-subsidized diesel prices could triggered a domino effect across various sectors, impacting costs even though the cash assistance is distributed. Given these potential economic impacts, how prepared is the government to support affected businesses and consumers?

SELAMAT HARI RAYA AIDIL ADHA

Wishing everyone a joyous Eid Adha. This celebration remind us of the importance of sacrifice and dedication, values that are essential for inclusive prosperity. May this Eid inspire faith, unity and progress for everyone.

From us, EU-ERA, THE FUTURE

Malaysia has introduced GST in 2015 aimed to broaden the tax base and boost revenue. However, this tax had failed due to delayed refunds, tax evasion, and its regressive impact on lower-income households. Rising prices and compliance costs led to its repeal in 2018. This raises the question: is GST an inefficient tax?

Some experts see it as an effective revenue generator, while others believe it burden low-income earners. Despite the debates, many developed countries have implemented this form of taxation and have established various practices for its application.

Narayanan and Abdul Latif (2024) highlight that Malaysia isn't alone in struggling with GST. Countries like Malta, Grenada, Ghana, and Belize faced initial challenges, leading to GST repeal. However, after adjustments, they reintroduced GST, improving revenue collection and fiscal stability.

They emphasized the need for thorough preparation if Malaysia reintroduces GST. Such as, focus on tax credits and subsidies for low-income households, efficient refunds, and continuous monitoring. Timing with economic conditions is important for GST to support fiscal sustainability and growth.

Given these considerations, should GST be reintroduced in Malaysia?

Malaysia's universities are climbing global ranks, boosting the country's educational competitiveness, particularly in higher education. This recognition highlights their academic excellence and research output.

However, these rankings don't always reflect labor market outcomes. Lower ranks in Employment Outcomes may indicates that graduates are still face challenges in employability and applying their education practically to contribute to society.

Despite higher universities rankings, youth unemployment rate has stayed above 6% since 2015 (Labour Force Survey, DOSM), higher than the overall unemployment rate.

This issue may highlight the need for policymakers to further bridge the gap between higher education and the job market. Improving this connection is crucial for enhancing employability and societal impact.

An engagement session was conducted with the Sweden Embassy in Kuala Lumpur, Malaysia, to explore Sweden's policies and industries for a benchmarking mission aimed at developing a Talent Roadmap to enhance productivity from 2030 to 2034 with Malaysian Productivity Corporation (MPC). Numerous fascinating aspects of Sweden's policy development were uncovered, including its high rate of female labor force participation, productive workforce, and provision of high wages. To ensure a successful and productive benchmarking mission in Sweden, we are awaiting the Embassy's suggestions for industries to visit and their review of the itinerary.

In early phases of essential economic development, developing nations frequently have poor productivity but with great growth potential. They have difficulties with institutional efficiency, technology adoption, and sustainable growth as they become middle-income nations. In planning and development, social and cultural shifts are frequently disregarded.

National policies often overlook social and cultural changes that promote economic growth and welfare. These changes, including shifts in societal norms, values, beliefs, behavior, and institutions, can influence economic growth and welfare. The modern workplace is undergoing significant transformations due to the interplay of generational cohorts and their distinct cultural backgrounds.

Additionally, generation Z (gen-Z) values authenticity, diversity, and social impact in the workplace. They are entrepreneurial, adaptable, and skilled in leveraging technology for productivity.

As a result, structural and social gaps exist in the economy, leading to youth unemployment and increased informal workers. Also, Malaysia's transition to a developed, progressive, and virtuous country will be hindered by social parameters that lack reform efforts and structural changes.

What are your thoughts? Do you work somewhere that has these kinds of social gaps?



To read more about this topic, click the link below:
https://www.nst.com.my/opinion/columnists/2024/04/1042060/better-reform-bridge-gap-between-structural-and-social-changes