More youths forced into precarious irregular jobs

KUALA LUMPUR: More youths today are taking up “nonstandard” jobs that offer less security and legal protection, a survey by Khazanah Research Institute found.

The School To Work Transition Survey (SWTS), released yesterday, found up to 32 per cent of youths aged 20 to 24 work in the informal sector while 20 per cent of those aged 25 to 29 are already employed informally.

These are typically internetbased jobs or the “gig economy” which pays worker on a job-byjob basis without the protection benefits enjoyed by standard employment.

Among those aged 15 to 19, close to half of those polled are already employed informally.

“Despite more employment opportunities in the ‘gig economy’, they are often poorquality jobs where the work is unstable and insecure and with limited labour and social protection,” the report said in its summary of the findings.

Policymakers should find the data alarming given the size of the “gig economy” today. In Malaysia alone internet-based commerce is projected to be worth RM2 billion by 2020.

And the size is expected to grow exponentially, with some economists already predicting temporary or short-term contract-based work to dominate the employment market in the not-so-distant future.

The government itself has given the sector huge support, promoting the “gig economy” as a key solution to youth unemployment and giving out incentives like tax breaks or subsidies to successful start-ups.

Malaysian-founded Grab, a ride-hailing business, is among the largest beneficiaries of this policy.

Yet global economists have cautioned against embracing a highly precarious economy, warning against the potential socio-economic damage that may stem from having an entire generation of workers without stable jobs.

The KRI survey noted that awareness about rights and social protection among young workers is already very low among young workers with stable employment.

Of the thousands of young workers polled, up to 85 per cent said they do not belong to any workers’ association or union.

This dovetails with findings that graduates in Malaysia today are among those with the lowest wage reservation in the world.

Reservation wage is the lowest threshold which a job seeker is willing to be paid for a job. The KRI SWTS found that the median average reservation wage was as little as RM1,550.

Malaysian graduates are also among the lowest paid in terms of starting salaries, a finding that further strengthens the fact that most job seekers are unaware about the benefits of unionising.

Economists have cited the waning collective bargaining power among Malaysian workers as a key reason for their inability to secure higher salaries.