It’s not about high or low wages but a question of supply and demand

It’s not about high or low wages but a question of supply and demand

Unemployment among the educated is high because our economy isn't growing and moving up the value chain fast enough.

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Are our workers paid too high? Or are they paid too low? Are our workers too choosy and fussy? Do our workers prefer unemployment over low wages? Are our workers sufficiently skilled? What sort of skills are we talking about here? Do we have high-skilled jobs readily available to begin with?

I hope by now we realise that we have largely entangled ourselves in one of these “chicken and egg” arguments. I am referring to the news item, “Bosses split over whether fresh grads are asking for too much” which appeared in FMT today.

I wish Pakatan Harapan ministers and leaders would show more interest in issues like this instead of talking no-brainer politics all day.

Companies will employ workers when there are jobs available. They will pay wages up to a level that brings them positive contributions. Is this too difficult to understand?

Why are we arguing whether workers are paid too high or low? If a company can’t afford to pay a living wage to its workers, it means that company is no longer able to continue operating in Malaysia. If there are jobs that can’t offer a living wage, it means no one would want to offer their labour.

I think we shouldn’t be talking about specific skills here. We should be focusing on whether we have produced a sufficient number of educated and trainable workers.

There is no way our universities or technical institutes can produce workers who are able to meet the specific skills required by employers. But I believe we have produced educated citizens and graduates who are trainable for higher-skilled jobs.

Hence, we must first ask whether there are higher value-added jobs readily available in our economy. Singapore depends on many Malaysian workers. Are we saying those Malaysians working in Singapore are unskilled?

Second, the issue is not how high or low the wages are. Ultimately it is always productivity and cost of living that determine employment.

Companies will employ workers and pay realistic wages so long as it is beneficial for them to do so. The higher the contribution of the workers, the higher will be their wages. Similarly, workers will not offer their labour if wages offered are not able to provide them with a decent living.

We have high unemployment among the educated because our economy is not growing and moving up the value chain fast enough. We may blame it on skill deficiency but I think we have missed the forest for the trees.

The education system can’t produce specific skills for specific needs. The most important thing is to produce thinking and trainable workers. Malaysians must be taught from young “to learn how to learn” because all skills and knowledge will get outdated, sooner than later.

Create a conducive environment for investment, grow the economy and educate our citizens, I am sure employment, specific skills and wage levels will take care of themselves.

TK Chua is an FMT reader.

The views expressed are those of the author and do not necessarily reflect those of FMT.

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