PETALING JAYA: Unemployment is likely to inch upwards this year as the private sector puts the brakes on expansion, say economists as latest official statistics show that unemployment went up to 4.8% in December.
Universiti Tun Abdul Razak economist Barjoyai Bardai said unemployment is likely to get worse with more people being unemployed for a longer period of time.
“It will go up further from 4.8%. Being jobless for a longer period of time is going to be a permanent feature,” he told FMT.
He said the private sector may not want to hire people for various clerical and other jobs which can be done by software or artificial intelligence.“Companies are doing away with jobs that can be done by AI to cut overheads,” he added.
The Statistics Department’s labour force report for December shows there were 772,900 who were unemployed last month, up from 764,400 in November.
“As the Covid-19 pandemic continues to spread across the world coupled with a spike in new daily cases in Malaysia, it is foreseen that Malaysia’s labour market will remain challenging in early 2021,” the report said.
Of the 772,900 who were unemployed, about 83.4% were actively seeking new employment while the rest were classified as “inactively unemployed or discouraged” because they were not doing anything about their situation as they believed there were no jobs available.
Barjoyai suggested that the government should re-examine training schemes and give subsidies only to those who attend the training. The training should be market driven so that these groups are not left behind.
“Some of them may need six months’ training. Give them allowances to survive while attending the training,” he added.
As for diploma and degree programmes, he said Putrajaya needs to intensify market driven education by tying up with the private sector. “This is one of the ways for Malaysians to stay relevant in the job market,” he added.
With Malaysia still recording over 3,000 cases a day, he said there is no assurance the movement control order will be lifted by Feb 18; the economy would collapse further if the restrictions are continued.
“Companies will fall harder,” he said, adding that more small- and medium-sized enterprises may wind down if the government continues to impose lockdowns instead of imposing more targeted measures to curb the spread of infections.
Economist Yeah Kim Leng said consumption remains low, dampening any efforts for the private sector to expand business. “Unemployment will only inch down unless there is economic recovery, and the pandemic is contained,” he told FMT.
Yeah expects the first half of 2021 to be challenging unless Malaysia gets on top of the pandemic and allows social activity to return to normal levels. “Until then consumer spending will be low and unemployment high,” he added.
Malaysia recorded 5.3% unemployment in May 2020 because of the national economic shutdown, and many economic sectors especially the service sectors were still unable to recover their losses, he said.
Source: https://www.freemalaysiatoday.com/category/nation/2021/02/09/going-jobless-for-longer-periods-here-to-stay/