Commentary: Young and jobless in Malaysia
Youth unemployment could exacerbate Malaysia brain drain woes, with skilled locals migrating for better opportunities, says Malaysian researcher Edwin Oh Chun Kit.

File photo. Youths account for about 76 per cent of the 567,800 people who do not have jobs in Malaysia. (Photo: iStock/SrdjanPav)
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SELANGOR: Malaysia’s economy is recovering, tourists are returning, and investments are booming. Economic activities are normalising, domestic demand is higher, and the unemployment rate has returned to pre-pandemic levels.
On the surface, things seem positive. But the rosy data coming out of Malaysia masks a looming crisis: Youth unemployment.
Just before the Chinese New Year, the Department of Statistics Malaysia released its labour report, showing that the unemployment rate held steady at 3.3 per cent in the final month of 2023, with higher employment across all sectors.
The figures for youth unemployment, however, told a different story. As of December last year, 307,200 young Malaysians aged 15 to 24 were jobless, representing an unemployment rate of 10.6 per cent. Meanwhile, the unemployment rate for those in the wider 15 to 30 age bracket was 6.4 per cent, comprising 432,100 youths.
Putting this into context, these youths account for about 76 per cent of the 567,800 people who do not have jobs in Malaysia. Another 5 to 6 million students are set to graduate this year, compounding the issue. At the same time, job creations in 2023 slowed down, making things even more challenging for young people seeking to enter the workforce.
The social, economic, and political consequences of youth unemployment cannot be underestimated. This isn't simply a cyclical issue: The problems and flaws are deeply rooted within the system itself, requiring structural reform to achieve lasting change.
BRAIN DRAIN
Persistent youth unemployment could detrimentally affect Malaysia’s workforce and economic growth. Coupled with Malaysia’s history of incentives and cash aids, this could also increase government spending on social programmes, straining the already limited fiscal position.
Young Malaysians also face a double whammy: Low income hindering savings and potentially inheriting a financial crisis from older generations with inadequate retirement savings (nearly half have less than RM10,000 (US$2,110) savings in their Employees Provident Fund accounts).
Over time, this could trigger a brain drain effect, with skilled locals migrating for better opportunities. An estimated 5.5 per cent of Malaysians already choose to work overseas, higher than the global average of 3.3 per cent, former Human Resources Minister V Sivakumar said last year.
A study by the Department of Statistics Malaysia published on Feb 19 showed that three-quarters of Malaysians working in Singapore were skilled or semi-skilled, with the highest earner drawing a gross monthly salary of S$18,000. About two-thirds earned a gross salary of S$1,500 to S$3,599 a month.
The ringgit’s record-breaking decline means income earned by Malaysians in Singapore translates into better purchasing power in their home country. This could further exacerbate the brain drain.

POLITICAL STABILITY
Politically, a disenfranchised youth population, feeling marginalised and overlooked, poses a threat to social cohesion and political stability.
In Malaysia, young voters held the largest electoral bloc in the 15th General Election (GE15) after the minimum voting age was lowered from 21 to 18. The voter turnout for those aged 18 to 30 was robust at 75.6 per cent, close to matching the turnout among the 41- to 50-year-old group. In particular, the estimated voter turnout for those aged 18 to 20 was 79 per cent, among the highest participants of GE15.
The potential for youth voters to swing close elections demands immediate attention. Ignored frustrations and unmet needs could erupt into movements much like Arab Spring where widespread youth unemployment and disenfranchisement fuelled pro-democracy uprisings across the Middle East and North Africa.
The ASEAN region has seen similar movements as well from Thailand’s “lost generation” of young voters rising up and demanding transformation (especially in regard to the monarchy). This was seen in the support garnered by opposition Move Forward Party, led by young leaders claiming the most votes in last year’s election. The scramble to win over young voters was also evident in Indonesia’s recently concluded presidential election.
With such level of risk, the question arises - what is Malaysia doing? If the youth unemployment figures continue to rise, what does the government expect young voters to think at the ballot box? Will potential disillusionment ignite a demand for change? The party offering practical solutions, not just empty promises, will earn the youth's trust and mandate.
WHAT CAN BE DONE?
Numerous polls have consistently identified economic worries as the primary focus for young voters, specifically addressing concerns about escalating living expenses and challenges in acquiring homes.
Recognising those economic concerns, the government will in June pilot a progressive wage policy, aimed at improving the income of low-income workers in Malaysia. It takes inspiration from Singapore’s Progressive Wage Model implemented and identified in specified sectors, where a multi-year salary increment schedule is set out for workers in tandem with skills acquisition on their part.
How far it will go to improve the skills mismatch in Malaysia remains to be seen. Questions have been raised on the potential impact on Malaysia’s labour market, considering the voluntary nature of the initiative, a lack of a strong tripartism tradition in Malaysia and ambiguity on foreign workers inclusivity.
With the growing number of graduates entering the labour market each year, Malaysia also needs to build a transition support system that prepares young people for the job market, not just another exam. According to a report last year, more than 187,000 graduates remained unemployed in 2022, while 40.5 per cent of graduates were underemployed in semi-skilled and low-skilled occupations.
Vocational education could potentially bridge this education-industry gap, but internal reforms are first crucial. For Malaysia, this means addressing instructor competency issues (qualifications, industry experience) and the fragmented landscape of independent providers with varying standards.
Public perception must also be reshaped as there is constant association of vocational education graduates with lower-paying blue-collar roles.
MALAYSIA IS NOT ALONE
Malaysia isn’t alone when it comes to rising youth unemployment. Globally, the youth unemployment rate is estimated at 15.6 per cent in 2021, according to the International Labour Organization.
China’s youth unemployment rate, for example, had previously climbed to record highs of more than 20 per cent. Southeast Asia and the Pacific exhibit particularly concerning rates compared to global averages when considering youth–to-adult ratio of unemployment rate.
Therefore, framing youth unemployment as solely a Malaysian problem is limiting - it is a regional challenge that warrants a regional solution with other ASEAN countries facing similar challenges.
Moving forward, we should strive to move away from the low-skill, low-wage strategy. This approach, while enabling Malaysia to attract companies that seek cheap labour unfortunately perpetuates a negative perception and hinders its potential.
The global geopolitical landscape is shifting. ASEAN has the potential to become a force in this new world order but to achieve this, Malaysia must invest in its youth, equip them with the required skills and champion innovative ideas.
Edwin Oh Chun Kit is a researcher at Malaysian think tank The Institute of Strategic Analysis and Policy Research (INSAP).