The Center for Market Education (CME) said low wages for fresh graduates and rising underemployment were interrelated and at least partially due to “mass tertiary education”.

“The rising access to tertiary education, in fact, is generating two additional phenomena, which are decreasing the quality of education itself and decreasing the value of the education certificates,” it said.

There has been a debate on the minimum wage lately, with human resources minister M Saravanan saying a wage of “around RM1,500 a month” was expected to be implemented before the end of this year.

In response, the Malaysian Employers Federation said the proposed increase would kill businesses, which were still recovering from the pandemic.

Meanwhile, the Malaysian Trades Union Congress urged Putrajaya to raise the minimum wage by the second quarter of the year instead of the end of 2022.

In a statement today, CME said the determination of minimum wage should be left to market forces, and a certain amount of freedom should be allowed for unskilled labour to move between different employers.

It also said that “in a community where everybody possesses a degree, the marginal value of that degree declines and the degree does not constitute anymore a signal for the employer about the value of a potential employee”.

“That value, then, needs to be discovered during a period of training, which will be paid less than the average salary precisely because the degree does not contain any longer relevant information about the worker’s value.”

In this regard, it said,  education reform should be conceived, aimed at “lowering the number of tertiary education graduates”.

“Secondary education should be already a qualifying one, preparing for administrative and technical jobs, while tertiary education should be left only for qualifications requiring an extremely high level of skills.

“In this way, false expectations would be avoided and most of the professionals could join the labour force at an early age,” it said.

Lastly, CME said, inflation was a monetary phenomenon and failing to recognise this would bring about misleading analyses and wrong policies.

“Too much money chasing too few goods is the result of the excess quantity of money created to handle the damages created by lockdowns.

“There is a need for a gradual plan of government spending cuts in order to contain inflation and to try to minimise the impact of the restrictive policies which are now unavoidable,” it said.