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Low salary for graduates is the fault of company and government policies

As seen in the Star,

There are several letters debating on basic salary for graduates in The Star. Seem the local employers are habitually put the blame on the poor attitude and lack of English proficiency of our graduates.

This scenario is not entirely true.

Malaysia economy had been stuck in the middle-income trap due to local company’s short-sighted human resources policy. The import of several millions cheap and low-skilled foreign workers was the beginning of low pay era. Local companies are competing on low labor cost for low valued added products and services since 80s after the very lenient and unplanned foreign worker import policy was introduced.

For instance, RM2,500 is deemed high because local companies only surviving factor is low cost. They are comparing Malaysia salary with Indonesia, Vietnam, etc. after being trapped in the same playing ground with them, and wrongly perceived RM2,500 is a high salary in Malaysia.

Unfortunately, Malaysia’s living cost is a few times higher than our neighbors and our workers are feeling the pinch of stagnant salaries and decreasing purchasing power over the years.

Moving to higher operational efficiency and up value chain should be initiated by the employers. No employee can turn the tide if local company’s management still expects low cost or low salary is the only weapon to compete globally.

The dire need to retrain fresh graduates is attributed to mismatched in the manpower supply and demand planning, poor academic standard in our universities and lack of participation from local industries in formulating university syllabi. Outdated syllabi, poor knowledge and skill set issues should be tackled by our government, universities and industrial players. Our local graduates are the real victims, and being punished with a low salary and bad employee perception is unfair and unjust to them.

Our talented graduates will look to the outside world for the greener pasture due to low salary offered by local companies. Less talented graduates from locals and foreign countries will fill up the gap leftover by them. The vicious cycle of poor quality graduates and low salaries in the local companies will be continued until the cows come home.

The root causes of low salary is local company over dependent on cheap foreign workers, poor manpower training and planning at the national level and also poor participation from the industries in shaping university syllabi.

Our workers and graduates are merely scapegoats for the country’s failure to break away from the middle income trap.

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