May 22 2025, 01:28 PM, updated 7 months ago
65pct of degree holders in Malaysia earn below RM3k, study finds
By Suzalina Halid - May 22, 2025 @ 1:13pm
KUALA LUMPUR: Over 65 per cent of degree holders in Malaysia earn less than RM3,000 a month, a figure sufficient only to cover basic necessities, with little room to save, invest, or move up the socioeconomic ladder.
In addition, more than 70 per cent of graduates are forced to work in semi-skilled or unskilled sectors.
These findings were presented in a study titled The 'Gaji Cukup Makan' Economy: When Higher Education Becomes an Economic Risk, conducted under the Malaysia Labour Market Insight Series.
Its author, Dr Mohd Yusof Saari, said the report revealed a deep structural crisis between higher education and employment, with tertiary education no longer guaranteeing wages that match qualifications and skill levels.
"This reveals the true state of graduate employability, which is often reported to be above 80 per cent.
"But the report highlights that these figures can be misleading, as they include all forms of employment without accounting for skill mismatches or wage levels.
"The reality is that 65 per cent of degree holders in this country earn a monthly salary of under RM3,000," he said in a statement today.
He also pointed to the widespread mismatch between academic qualifications and employment as a sign of declining returns on investment in higher education.
He said that although skill mismatch is not unique to Malaysia, and occurs even in developed countries, the situation is more pronounced here due to persistently low salaries.
"This offers no protection to those working in jobs that do not match their qualifications.
"In Malaysia, the mismatch leads to deeper economic vulnerability, limits upward mobility, and reduces the incentive to pursue higher education - especially among lower-income groups," he said.
Consequently, pursuing higher education is becoming increasingly risky from an economic standpoint, particularly for young people who must bear the rising cost of education without the assurance of commensurate salaries.
He said the growing disconnect between qualifications, job quality and career rewards is challenging the traditional belief that education guarantees better social mobility.
"The report identifies several key causes of this crisis, including sluggish wage growth, weaknesses in pre-employment preparation, and low demand for skilled labour from the private sector.
"These factors have resulted in a stagnant wage trajectory, where the income gap between graduates and non-graduates is minimal - especially during the early stages of their careers."
The author called for structural reforms, including the replacement of misleading employability indicators with measures that reflect actual skill matching.
Other proposals include the development of a long-term graduate outcome tracking system, the restructuring of industrial training and pre-employment pathways, the modernisation of industries, and the redesign of jobs to address deeply rooted structural issues.
"The government must also introduce wage guidelines as an advisory tool to address wage suppression.
"The report proposes a holistic policy framework that integrates education planning, labour market demand and wage outcomes - moving beyond fragmented policies towards a coherent, national, outcome-based strategy."
He added that the report provides a macro perspective on structural challenges in Malaysia's graduate labour market, offering a comprehensive diagnosis of wage stagnation, skills mismatch, and inefficiencies in the education-to-employment pathway.
In addition to identifying critical policy gaps, the report also called for further research to transform these findings into targeted, high-impact reforms.
"Such follow-up is crucial in designing appropriate policy interventions, tailored to the realities faced by graduates across various sectors, demographics and education tracks.
"When graduate salaries are barely distinguishable from those of non-graduates, investing in higher education is no longer a guaranteed path to social mobility, it has become an economic risk," he said.
The Gaji Cukup Makan report was developed by the Centre for Future Labour Market Research (EU-Era) under Future Studies Berhad (The Future).
The Future is dedicated to leading the transformation of Malaysia's economy and labour market through evidence-based research, aimed at informing policymakers, industry players and the public on the implications of this ongoing transformation.
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Degree Holders, Low Wages
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