By Steven Sim, MP for Bukit Mertajam and DAPSY National Political Education Director  

During my maiden parliamentary sitting in 2013, “economy minister” Abdul Wahid Omar said in Parliament that our country’s unemployment rate is about 3-4% and hence it can be said that we have a situation of full employment. In response, I have pointed out the problems of underemployment, youth unemployment, unfair industrial practices, gender discrimination in the job market, brain drain and post-retirement workers to remind the government not to adopt a self-congratulatory attitude towards the issue of jobs in this country.

Two days ago, on 12 May, at a Business Leaders Dialogue Session with the Prime Minister, Abdul Wahid finally acknowledged the problem of youth unemployment. He said that currently, 161,000 graduates aged between 20 and 24 had yet to find a job.

Graduate unemployment is only half the problem

However, young graduate unemployment is only half the problem. In a report by the Finance Ministry, it was shown that from January to August 2011, 90.1% or 308,371 persons among job seekers registered with the Human Resource Department are young people aged between 15-29 years old – both graduates and non-graduates.

While unemployment is below 4%, youth unemployment is more than 2 times higher at 10.4%. This is considered high for the region, compare for example to our immediate neighbours, Singapore at 7% and Thailand at 3.4%.

Those who actually have jobs, however, suffer from underemployment, mismatched jobs to their qualification, low wages, and other bad career situations. For example, even based on the government’s conservative definition, youth underemployment is at 15.1%. Meanwhile 21% of employed degree holders are working in jobs which do not require a degree.

A majority of young workers living in poverty

An overwhelming majority of young workers in Malaysia, that is, 67%, earn a monthly salary below RM1,000 while 21% earn between RM1,000 to RM1,500. In other words, 88% of young workers in Malaysia earn below RM1500.

In Selangor, those earning below RM1,500 a month are classified as living in poverty.

Schedule 1: Number and percentage of earners (15-24 years old) according to salary bracket (Parliamentary reply from Human Resource Minister to MP for Bukit Mertajam on 12 November 2014)

Young Malaysians affected badly by GST

In such a situation, the federal government insisted on implementing the Goods and Services Tax (GST) last April. The government obviously have not taken into consideration the adverse impact of GST on young Malaysians.

The Penang Institute has shown that where the head of the household is below 24 years old, the household will pay a higher GST over income rate compared to other households.

Schedule 2: GST over income (GSTI) of different households based on the age bracket of the head of household (Source: Penang Institute)

In other words, GST will affect young households the most.

But of course the worst off are the unemployed young Malaysians, graduate or not. GST obviously does not discriminate between the employed or the unemployed.

GST is the most irresponsible policy by the Najib administration since April 2009 when he became Prime Minister. It was implemented haphazardly without taking into consideration the current economic situation of Malaysians, especially the situation facing young Malaysians.

The future is bleak for young Malaysians under the current crony capitalist policy of the Barisan Nasional regime. This will definitely leave an economic scar on our young generation, affecting them for at least a decade from now. If a young person is jobless or poor or in debt today, we must not assume that ten year from now he will be doing very well compared to others who are not in such situations now.

– The Rocket