NEWS
Ex BNM Governor: Fresh Grads Should Be Earning Between RM7K to RM8K
Malaysia's real wages have eroded almost threefold over the past four decades, said the former Bank Negara Malaysia (BNM) governor Tan Sri Muhammad Ibrahim.
In an interview by Sinar Harian, he noted that the starting salary for a university graduate these days is only around RM2,000 to RM3,000 a month, which actually isn't a far jump from his starting salary of RM1,300 per month back in 1984.
“Taking into account the annual inflation rate of 5%, the equivalent salary for university graduates in today's era should reach RM7,000 to RM8,000 per month."
"That's equivalent to the purchasing power of around RM300 to RM400 in the 80s. In reality, our salaries have declined by at least three times,” he explained.
Malaysia's low-wage issue stems from various interrelated factors
Additionally, Ibrahim said some of the factors that contributed to this issue included dependence on foreign workers, failure to create high-paying and quality jobs and weaknesses in the education system.
As of December 2024, Malaysia's total workforce is 16.78 million people, with 14% of them (about 2.37 million) being foreign workers.
“Most foreign workers hired over the past decades are low-skilled and inexperienced, making their recruitment cost cheaper, but the situation provides direct competition to the low-income group (B40) since their salaries have not increased.”
Ibrahim also stated that Malaysia has failed to create high-paying jobs due to economic issues. Other than that, the education and skill training systems are also feared to be outdated and no longer meet the needs of the 21st-century market.
“All of the issues are a reflection of the government’s attitude that are still hesitant and too cautious to carry out comprehensive reforms. I believe Malaysia should stop relying on Gross Domestic Product (GDP) figures and focus more on employment structures to develop the economy.”
Featured Image Credit: The Edge Malaysia, Delano.lu