KUALA LUMPUR – With more than 90% of p-hailing workers aged 30 and below, the government needs to identify why young Malaysians are opting to work in the gig economy and not in higher-skilled jobs that are essential for the country’s progress, economists said.
Putrajaya must find out whether young adults are taking up such jobs due to personal choice, or if it is a more serious problem – the lack of employable skills, said Lee Heng Guie of the Socio-Economic Research Centre (SERC).
It could be that some have grown accustomed to working such work during the Covid-19 pandemic and have grown used to jobs with flexible timing.
“On the other hand, there may be people who really want a permanent job but they cannot find employment that fits their qualifications. There is a mismatch. Maybe they are working as e-hailing drivers while waiting for the right fit,” he told Scoop.
Once the reasons are identified, the government can take the right steps, Lee added.
The concern with gig work is that it does not help improve the nation’s productivity.
“We need people to continue to contribute to the productivity of the country. We produce about 300,000 graduates (from SPM in a year) and if they all go to the gig economy, it will be a problem for the nation’s (overall) economy,” Lee said.
He proposed the government focus on upskilling programmes to encourage more youths to join the permanent workforce.
A 2022 study by the Statistics Department (DoSM) involving 6,657 p-hailing workers found that 97% of them are aged 30 and below. Most of them earned below RM2,500 a month.
Just under 40% of them are SPM holders or equivalent, while nearly 12% have a Bachelor’s degree.
In 2023, a survey by Malaysia Digital Economy Corporation (MDEC) found that seven out of 10 workers in the gig economy are p-hailing delivery partners.
The gig economy includes more than just p-hailing or e-hailing riders and drivers. DoSM calls it the informal employment sector, which comprised 3.5 million workers in 2021.
They perform an array of jobs such as p-hailing and e-hailing riders and drivers, babysitters, food hawkers, bakers, tailors, internet salespersons, programming analysts, agricultural work, and others.
Fixing job market structure
Recently, Economy Minister Rafizi Ramli said it would be more effective if the government fixed the country’s job market structure rather than intervene in the gig economy.
Addressing job market structures will rebalance supply and demand and enable university graduates to find employment suiting their qualifications, he said in a podcast session.
This rebalancing is exactly what Mohd Khaleed Abdullah, 28, needs.
The diploma-holder in civil engineering has been driving for Grab for the last two years after failing to find a job that fits his qualifications in Sandakan, where he wants to live.
“If I had a choice, of course, I would like to be employed in engineering. But as I want to stay in Sandakan, I cannot find such a job here,” Khaleed told Scoop.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Putrajaya needs to ensure more young adults complete tertiary education or technical-based training in order to fix weaknesses in the job market structure.
At the same time, the government should also promote a competitive economy for the private sector to drive growth, he said.
“Reduce red tape in approval processes, ensure sufficient supply of labour as well as uninterrupted power and water supply, ensure logistic and digital connectivity, and eliminate corruption.
“These are key areas that would incentivise the private sector to grow their business. That way, there will be demand for highly skilled workers who are commensurate with their level of education and experience.
“There is no shortcut for the country to transform into a developed nation, one that will pay its citizens good salaries and benefits,” Afzanizam added.
Malaysian Institute of Economic Research economist Shankaran Nambiar said youth may opt to work in the gig economy for their own reasons, and that is an individual choice.
“As far as the government is concerned, they should focus on attracting investment, improving skill sets, and raising the level of education.”
He agreed with SERC’s Lee that Putrajaya should investigate if gig workers are in the sector due to lack of employable skills.
“If it’s because youth lack skills, whether soft skills or technical skills, then it is a matter of concern.
“The need to revamp the education system and skill-based training has often been raised. The pursuit of micro credits as a way of upskilling is another strategy.
“If people are opting for the gig economy because they value their time, and flexible working conditions, then that is fine. It’s not for the government to decide that being a kindergarten school teacher or a grab driver should not be a default job.
“But if people are turning to this sector because there is no job creation in other sectors, then the government should be worried,” he said.
Universiti Utara Malaysia economics professor K. Kuperan Viswanathan agreed the government should focus on economic growth, attracting investments and developing a trained workforce.
“(With these), more job opportunities will arise for young graduates.” – January 26, 2024