Malaysia Needs a “Good Jobs” Vision for the Next Generation

Economic growth means little to young Malaysians if their wages and careers cannot grow with it

By Jym Tan Jia Tzer

Digital Communications Specialist

For Malaysians of my generation, there is an increasingly uncomfortable question: will we actually be better off than our parents were at the same age?

We are better educated, more digitally connected and entering a far more technologically advanced economy. Yet many young Malaysians do not feel that progress when looking at salaries, housing costs, daily expenses and career prospects. A plate of nasi lemak now costs 81% more than it did a decade ago. Salaries have not moved anything like as fast.

The latest Department of Statistics Malaysia (DOSM) data reinforces that concern. In 2025, nearly two-thirds of Malaysian employees earned RM2,223 or less a month, while the median monthly wage was RM2,940. Although median wages rose 5.3%, the figures also show a stark skills gap: skilled workers earned a median RM5,057, compared with RM2,223 for semi-skilled and RM1,758 for low-skilled workers.

Malaysia Needs Good Jobs for Youth

Recent research from PNB Research Institute (PNBRI) helps explain why. Its research on entry-level salaries found that real wage growth has been largely stagnant over the past 25 years, while the wage premium associated with higher education has narrowed. Its latest paper, A Good Jobs Strategy for Malaysia, argues that economic and productivity growth do not automatically translate into better compensation. Malaysia has a shortage of what PNBRI calls “good jobs” — jobs providing decent wages, skills development, career progression and economic security.

The experience of Malaysians entering employment during the 1980s and 1990s was markedly different. My parents’ generation certainly endured economic difficulties, including the 1985-86 recession and Asian Financial Crisis. But they were also participants in one of Malaysia’s great economic transformations.

Malaysia was rapidly moving from an agriculture- and commodity-dependent economy towards manufacturing, services and global supply chains. World Bank historical data found that real earnings of manufacturing workers grew by an average 3.5% annually between 1973 and 1989.

Following the mid-1980s recession, Malaysia liberalised investment, encouraged export-oriented industrialisation and gave the private sector a greater economic role. GDP subsequently expanded by approximately 8.3% annually between 1986 and 1990, while foreign investment surged.

Most importantly, economic transformation generated enormous demand for workers. IMF data show manufacturing wage settlements averaged around 9% annually between 1988 and 1994. These figures are not directly comparable with today’s national wage statistics, but they demonstrate the wage pressures created by a rapidly expanding economy hungry for workers.

At that time, the Administration made deliberate choices about what Malaysia wanted its economy to become. Industrialisation was aggressively pursued. Foreign investment was courted. Infrastructure was built. Human capital was developed. My parents’ generation watched the Petronas Twin Towers and KLIA go up, and watched university places open to far more people than before. When circumstances changed, economic policies changed with them.

PNBRI challenges the assumption that increasing productivity will inevitably increase wages. Its research argues that Malaysia cannot rely solely on productivity growth because productivity gains do not automatically flow through to worker compensation. That is not an argument against growth. Malaysia still needs a competitive economy that attracts long-term investment and pays properly for skill, because without growth there is nothing to share. The argument is that growth on its own has not been enough.

Job Automation with AI

This becomes even more important with artificial intelligence. As someone working in digital communications, I can already see how rapidly AI is transforming professional work. Writing, design, research, translation, coding, customer service, marketing and administrative functions can increasingly be automated or dramatically accelerated.

AI will undoubtedly create opportunities. But it could also allow companies to produce considerably more with fewer workers.

Our parents entered an industrialising economy that created tremendous demand for human labour. My generation may be entering a technological transformation that reduces demand for certain forms of human labour.

The policy challenge is therefore not resisting AI. It is ensuring technology increases the value of Malaysian workers rather than simply reducing the number of workers businesses require.

I believe what we are missing is an overarching economic mission to create substantially more good jobs for Malaysians. Malaysia should consider setting targeted wage-growth ambitions for key sectors, particularly advanced manufacturing, semiconductors, digital services, AI and other high-value industries. Success should be measured not only by investments and jobs created, but also by whether wages, skills and career opportunities are improving.

We could establish a Good Jobs Task Force comprising government agencies, industry representatives and skills providers to identify sectors capable of delivering stronger wage growth, address barriers to higher-value employment and track measurable outcomes. Investment incentives could also place greater emphasis on companies developing Malaysian talent, raising productivity and creating better-paying jobs. 

Public money is finite, so incentives should be judged on the wages and careers they actually deliver, not on the headline value of the investment announced.

I went to school with Malay, Chinese and Indian classmates, and we assumed much the same opportunities were open to all of us. That assumption holds only while people can see themselves getting ahead. Social cohesion has been one of Malaysia’s quieter economic advantages, and good jobs are what keep it.

None of this is beyond us. Malaysia has the location, the workforce and the record of transformation. What it needs is the same deliberate choice my parents’ generation made, and that is a choice for government, business and civil society together. Ultimately, Malaysia’s success should be measured not simply by how much the economy grows, but by whether the wages and opportunities of Malaysians grow with it.