Mention the informal job market and most people would give you a sympathetic look. The first thought that usually comes to mind is how difficult it is to earn money without steady employment.

While this may be true to some extent, attitudes are changing. More and more Malaysians consider working for themselves or starting their own businesses something to strive for these days. To them, it’s better than working for other people.

The informal job market can be thought of as businesses that are typically small and not registered with the government. Think stalls at markets or roadsides, food trucks, musicians, or freelancers writing that article for your news portal.

With this in mind, here are six facts about the informal job market in Malaysia. This article draws on data from the Department of Statistics Malaysia (DOSM), which provides breakdowns according to gender, sectors, urban/rural locations, type of workers and other factors, from 2013 to 2021.

1. The pandemic effect

The informal job market has been a fallback for many Malaysians throughout the years when things get hard in the economy. This was no different in 2020 and 2021, when the pandemic reached local shores.

Between 2019 and 2021, there was an approximate 200,000 increase in unemployed Malaysians. Guess where most of them turned to? That’s right. The number of informally employed Malaysians increased by about 46,000 to 1.3 million during this period.

The prospect of losing your job during hard times is daunting. Luckily, the informal market can provide opportunities for you to rely on to support yourselves, even if temporarily. Who knows, it might end up becoming your long-term primary source of income.

2. City focus

If you think most people who work informal jobs are located outside of cities, think again. In 2021, about 73.7% of such jobs (about 960,000) were in urban areas.

It goes to show that opportunities for informal work are available virtually anywhere. Those in cities don’t necessarily need to move to access this job market, especially not with the popularity of remote work buoyed by the pandemic.

3. Longer hours

This was a boon for many who lost their jobs during the pandemic. Before this, informal workers faced irregular and inconsistent working hours, which meant their income was also uncertain – a major contributor to people shunning this job market.

But the average number of hours worked per week by informal workers increased to 41.4 in 2021 from 38.9 hours in 2019. In many cases, an increase of 2.5 hours of work and wages made the difference when it came to having enough food for the family.

The increase in hours also shows there is enough work to be found in the informal market, especially in the gig economy.

4. Service, please

In 2021, the service industry made up about 67% of total jobs – formal as well as informal – marking a consistent rise since 2013 (then 63.9%).

This 67% primarily consisted of wholesale and retail trade, as well as repair of motor vehicles and motorcycles industries.

Wholesale and retail here refer to brick-and-mortar stores including shophouses and shopping malls, as well as roadside stalls and mobile businesses.

Hence, if you’re looking for informal work, you’ll likely find yourself working in service and retail. The rest of the informal jobs were concentrated in manufacturing (19.1%) and construction (13.4%).

5. Younger people

It seems like the younger generation is more open to embracing the unpredictability of the informal job market. Having a stable, cushy office job and working for others to save up for retirement is no longer a dominant ambition of young adults.

Workers aged 15-34 made up about 44% of informal jobs in 2021 – a 4% increase from two years prior. And interestingly, the number of young women working informal jobs increased during this period: 43,400 compared with 25,900 young men.

6. Selangor, East Malaysia, and down south

Selangor, with about 25% of total informal jobs in Malaysia, is one of the key hubs for the country’s services and manufacturing industries.

Sabah and Sarawak come in second at about 19% – good news for those based in East Malaysia who do not have to pack up and move to the peninsula (and again, there’s the option of working remotely!).

Coming in at No. 3 is Johor, with 10.5% of total jobs. Given its proximity to Singapore, you could even consider plying your trade there.

This article was written by Su-Wei Ho for MyPF. To simplify and grow your personal finances, follow MyPF on Facebook and Instagram.