Every year, thousands of young Malaysians cross the stage at convocation ceremonies, clutching diplomas and degrees. They have done what society asked of them: study hard, incur debt, and earn a certificate. They enter the workforce expecting to start a career in their field of study.
Instead, many find themselves working as baristas, retail assistants, or data entry clerks—jobs that require no degree at all.
For years, the official narrative has been one of success. In 2024, graduate unemployment in Malaysia fell to a mere 3.2%. On the surface, this suggests a healthy economy where almost every graduate finds work. But this statistic tells only half the story, and arguably, the less important half.
The real crisis facing Malaysia is not unemployment; it is underemployment.
The Numbers Behind the Headlines
While only 3.2% of graduates are jobless, the data reveals a far more troubling trend. According to the Department of Statistics Malaysia (DOSM), approximately 1.6 million graduates—or roughly 32.2% of the graduate workforce—are skill-underemployed. This means they are working in roles that do not utilize the skills they spent years acquiring.
Economist and former university provost Geoffrey Williams puts it bluntly: “Unemployment is low, but underemployment is high. This is the measure to watch. Almost two million are in this category, more than one-third of all graduates.”
This is not just a personal setback for the individuals involved; it is a massive inefficiency for the national economy. When a country invests resources in producing engineers, accountants, and scientists, only to have them perform tasks achievable by someone with a high school diploma, that is a waste of human capital.
Shifting the Blame
For too long, the solution proposed has been to fix the graduate. Young people are told to be more “flexible,” to improve their English, to learn coding, or to pivot to Technical and Vocational Education and Training (TVET). While upskilling is always valuable, placing the entire burden on the youth ignores the structural realities of the labor market.
As Williams notes, “If businesses do not supply graduate-level jobs, universities cannot do anything about that.”
The issue is a skills mismatch driven by an economy that has not created enough high-value, skilled positions to absorb its growing pool of talent. Universities are often criticized for being ivory towers disconnected from industry needs, yet they cannot single-handedly create jobs that do not exist. Similarly, employers who complain that graduates are “not ready” often fail to provide the necessary apprenticeships or training pathways to bridge the gap between academia and the workplace.
A Multi-Pronged Solution
Addressing underemployment requires a coordinated effort beyond simple training schemes. The recent announcements by Human Resources Minister R. Ramanan regarding the 13th Malaysia Plan (13MP) offer a roadmap, but execution will be key.
- Curriculum Reform & Industry Linkages: Universities must move beyond treating internships as a formality. Collaborations with industry leaders like Proton, Huawei, and Petronas need to result in structured pipelines where students gain real-world exposure before graduation. Courses with consistently poor employment outcomes should be reviewed or restructured.
- Elevating TVET: The stigma surrounding vocational training must end. A skilled technician, automation specialist, or healthcare worker is often in higher demand than a general degree holder. However, this shift only works if these roles come with fair wages and clear career progression.
- Wage Alignment: The government’s push to empower the National Wages Consultative Council to set starting salaries for graduates is a crucial step. If a degree-holder is paid a subsistence wage, the incentive to pursue higher education diminishes. A “living wage” framework must be enforced to ensure that skilled work is compensated fairly.
- Data Transparency: Enhancing the e-MASCO portal to include salary data and job quality metrics will help students make informed decisions about their career paths and force institutions to be accountable for their graduates’ outcomes.
The Path Forward
The goal must shift from simply “getting a job” to “building a career.” A society where one-third of its educated workforce is underutilized is a society operating below its potential.
The Madani Government’s focus on structural labor market reforms is a step in the right direction. However, success will not be measured by how many graduates find any job, but by how many find the right job.
Universities, employers, and the government must stop passing the buck. Only by working together to create an ecosystem that values and utilizes skilled labor can Malaysia ensure that its graduates move from merely surviving to truly thriving. The degrees on the wall should be a passport to opportunity, not a ticket to a dead-end job.
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