Govt needs to provide new incentive for companies to equip youths with skills

Dr Yeah Kim Leng, Professor of Economics at Sunway University Business School said most youths did not have the right skills or expertise for the jobs, causing huge unemployment among them.

"Some incentives can be designed to actually encourage firms to use our youths as one of the sources in expanding their workforce through appropriate training.

"Wide-ranging skills and expertise are needed in order for them to work productively in the industry," he told reporters on the sidelines of a half-day forum on the Malaysian economy here, Friday.

Yeah, who is also a member of the Bank Negara Malaysia Monetary Policy Committee, said youth unemployment was on the rise not only in highly-skilled jobs, but also in low-skilled jobs, which resulted in the influx of foreign labour in the country.

"The influx of foreign labour is (also) one of the causes of 'depressed wages', mainly in the low-skill labour category. It has been depressed due to the easy availability of foreign labour which affected mostly the low-income group.

"There are merits in terms of dependency on foreign labour for the performance of the 3D (dirty, dangerous and demeaning) jobs. We need that," he added.

Yeah said the problem began affecting youths as foreign workers gradually expanded into other areas, especially in supervisory jobs and the service sector, which should cater to unskilled Malaysians without high qualifications.

"So, in a way, opportunities for them (local unskilled workers) have been taken away by the unskilled foreign labour.

"If they (local unskilled workers) are not be able to up skill (themselves), they will be competing with the cheap foreign labour and their wages will be stagnant," he said.

In order to stem the flow of foreign labour, Yeah said automation was strongly needed as part and parcel of the structure upgrading as it required higher skilled employees.

Yeah said the influx of foreign labour also weaken the ringgit to a certain extend as they sent money from salaries back to their home, causing huge outflow of local currency.

While the minimum wage enforced by the government (on July 1, 2016) has boosted the income of Malaysian workers, it has also benefited foreign workers, he added.

For businesses and industries, he said the minimum wage enforcement had indirectly put pressure in terms of their operation expenditure to upgrade and increase productivity.