M'sian youth prepared to accept wages below reservation income, says Khazanah Research

KUALA LUMPUR (Dec 12): Young part-time Malaysian workers and contributing family workers earn below their reservation income, suggesting that they are prepared to accept earnings below their reservation so that they have jobs.

This is according to a study by Khazanah Research Institute released today, in a report called School-To-Work Transition of young Malaysians (SWTS). The report was compiled based on an extensive survey among young Malaysian men and women aged 15 to 29 years in the education system and job market.

The report highlighted that a very commonly stated reason for high youth unemployment is that young people have unrealistic wage expectations.

"Employers complain that fresh graduates are asking for too much of between RM2,400 to RM3,000. The SWTS data show actual monthly income (mean value) of RM1,846 for young workers and reservation wage of RM1,715 for young job seekers.

"The reservation wage is the wage below which youth would refuse a job offer. However, the SWTS data indicate that young part-time workers and contributing family workers earn below their reservation income, suggesting that they are prepared to accept earnings below their reservation so that they have jobs," it said.

Compared with government mandated minimum wage which will be RM1,100 as of Jan 2019, the monthly allowance for 1Malaysia Training Scheme (SL1M) participants of RM2,000 and the salary employers offer newly hired undergraduates (minimum RM1,703 and maximum RM2,682), the SWTS data argue that young Malaysians are not "unrealistic" nor are they "asking for too much". — theedgemarkets.com

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