Malaysias Unemployment Rates

Malaysias Unemployment RatesJump to Ca theatrical roles of Unemployment Types of Unemployment Unemployment in Malaysia Impact of Unemployment Unemployment and Inflation mop upThe master(prenominal) objective of this paper is to investigate the unemployment and growth appreciates of Malaysia. Unemployment is an important issue for developing economies in a coun settle. Inefficiently of using project resources leave behinding cause to eminent unemployment rate. The result shows that the economics in Malaysia is meliorate with towering employment. In economics, unemployment statistics rate the condition and extent of job slightness within an deliverance.Full employment should be a major macroeconomics goal because it maximizes output. For many years, the manufacturing has been the strongest celestial sphere in the country until it is now being progressively replaced by the service sector.In this research, we will measure how unemployment affects economics growths in Mal aysia and also the reason of utmost unemployment rate of warm graduate. Thus further research and relevant factors is required.IntroductionThis paper asks the question of how the rate of economic growth affects unemployment. The main considerations that lead us to think that this is an interesting question have to do with the re-all(a)ocative aspect of growth. Faster economic growth mustiness come from a faster increase in knowledge.Besides, unemployed graduates have become a serious case in Malaysia that need more awe by the disposal. In year 2006 involving 132,900 graduates from institutions of high learning all over Malaysia indicated that 30.7% of graduates remained unemployed six months after graduation, man 5.7% were still awaiting job placement (Tan, 2007). thither are more fe phallic graduates in this country were unemployed because they lacked the relevant skills required in the task market despite having excellent pedantic results. The bite was much higher in com parison to male graduates (Nor Hartinin, 2007).In the sixties and seventies Okuns law was regarded as ane of the most reliable macroeconomic relations. Okuns Law arsehole clearly present the relationship amongst GDP growth and unemployment. Most economists were playing down the relationship between growth and unemployment. Unemployment was explained by geomorphologic factors, mainly by inflexible labor markets to a fault high wages, too high unemployment benefits and labors attitude.UnemploymentUnemployment or joblessness occurs when those individuals actively seeking jobs remain unhired within the past quadruplesome weeks. Unemployment is expressed as a percentage of the total available melt down force. The level of unemployment varies with economic conditions and other circumstances.The unemployment rate is a measure of the prevalence of unemployment and it is autoeful as a percentage by dividing the egress of unemployed individuals occurrently in the labor force. Dur ing degrees if recession, an preservation usually experiences a relatively high unemployment rate.In a 2011 forward-lookings story, Business Week reported, More than 200 million nation globally are out of work, a record high, as almost two-thirds of advanced economies and half of developing countries are experiencing a s minusculedown in employment growth.Causes of unemploymentThe level of unemployment differs with economic conditions and other market forces. Unemployment occurs when an individual is out of his current job and looking for a nonher job. It also heart that they are unemployment during the duration period of shifting between two jobs. Normally the job seeker ineluctably few months to hunt for their favourite job.When there is a couple of skilled workers in the labor market, the structural change within an economy will bow the unemployment. Some of the causes of unemployment are geographical immobility, occupational immobility and technological change. Nowaday s, most of the companies are using information technology to carry out the job. The employees who have no upgrade himself will disqualify from the caller. Moreover they need to go for training to increase their knowledge on the working field.Unemployment will occur when trade unions and labor organization bargain for higher wages, which leads to fall in the adopt for labor. Currently the raw graduates are hunting for the job which has high salary, nice environment and elementary task. They do not have determination and bear hardships to face the challenges.Unemployment occurs when there is a downturn in an economy, the aggregate fill for heftys and services decrease and demand for labor decreases. At the time of recession, unskilled and surplus labors become unemployed. When there is meagerly demand in the economy to maintain full employment, the problem of unemployment will occurs. If demand falls, tautens sell less and so reduce production. If there are producing less, thi s leads to lower demand for workers. Either worker is fired or a firm cuts back on employing new workers. In the worst-case scenarios the fall in demand may be so great a firm goes bankrupt and everyone is do redundant.Reasons forunemployment in MalaysiaLack of experienceNowadays most of the companies prefer to employ commonwealth with experiences rather than those without working experiences. Based on our research, there are several(prenominal) reasons leading to the high unemployment rate.People lacking of experience are mostly fresh graduates from university or college. The syllabus in university should provide more exposure on real-life industrial training, such as industrial attachment and internship program. Different circumferences have to be managed in different solutions, and the problem-solving skills can be accumulated from the real-life experiences. For example, a computer programmer has to be familiar with a series of computer languages such as C++, PHP, Java and etc. If the applicant did not meet the basic requirements of the company, the company cannot offer the job to this applicant.In University, the knowledge is mostly gained from textbooks, but sometimes the knowledge learnt is hard to be applied on working environments. University may overtake the required internship period from 3 months to 6 months or even longer. If the training duration is not long or sufficient enough, students may not be able to apply what they have learnt in school on their works. University students are suggested to apply for companies related to their courses. This may help them improve the learning and practical skills. It is not recommended to join those companies which simply arrange the trainees sitting in front of the computers and do nothing but day dreaming.Firstly, the reason why employers prefer experient employees is because experienced employees can complete the jobs easily without spending much time on learning their works. Having employees without e xperiences, companies need to provide additional training and courses for those employees. This will definitely set in to the cost of the company.Besides, the employee may be not familiar with the industry, thus, it is possible that they cannot complete the job well on time. It is not ensured that they are able to complete their jobs incisively and correctly with their as signaliseed supervisors. They may spend some time on adapting to the new environment and less focus on the jobs.Thirdly, the skills learnt from school are insufficient in real lives. In real life, company job is based on project and it requires the employee to pass with colleagues. Universities also have to provide more project-based modules for students. This can create more chances for students to discuss with their group members. In addition, it helps improve the soft skill of students.Last but not least, the fact that new graduates demand for high salaries also causes the high unemployment rate. Some of the graduate job-seekers are with high expectation for their first jobs. Even they are aware they lack of working experience, they still try to apply for higher salaries canvasd with those with one or two years experiences. Furthermore, students who graduated with excellent faculty member results are no longer secured with good jobs or rivalrous edges in career advancement.Lack of companionable and talk skillsMost of the graduates with rural background lack of communication skills compared with those from city. The reason may be because most of the residents dwelling in villages communicate with their elder adults and friends using their own dialects or bring tongues. They seldom speak in English. However, the working environment in Malaysia mostly requires people to communicate efficiently in English and Malay. in that locationfore, Kampung students may not be competitive in terms of communication skills even though they graduate with excellent academic results.Besides, a numbe r of town students who further test in university seldom use English to communicate with their teachers or friends. For example, the author mostly speak mother language, Mandarin, with her friends. This situation also makes the communication skill in English poor among town students.According to a survey conducted by Ministry of Human resourcefulnesss, it shows that in Malaysia compared with male graduates, female graduates become unemployed because the female are weaker in communication and social skills. Furthermore, the female have a poor command of language and low levels of self-confidence. The unemployment rate of female graduates is much higher than that of male graduates. The result also indicates that a attracter of female graduates are able to achieve excellent academic results but they could not secure their employment without the relevant skills required in the labor market.According toJobStreet.com which conducted an English Language Assessment (ELA) test whereby it had ranked Singaporeans is first, Filipino is second and Malaysians is third. This has proven that Malaysian English level standard is not up to satisfaction. The survey reveals that 65% of employers have turned down job seekers repayable to poor communication of English, which is the official crinkle language for 91% in Malaysias companies.Another report shows that, graduates throughout the country were unemployed due to poor communication skill in English. Though the fresh graduates possess excellent qualification and technical backgrounds, but they are unable to speak English efficiently when facing an interview. They definitely should improve their English language standards.For the basic process of an interview, the first point that the interviewer would assess the interviewee is his/her English communication capability. The way in which the interviewee speaks and interacts with the interviewer is a benchmark when the company measures suitable candidates for the job. If the interviewee even could not talk properly, it is impossible for the supervisor to assign a task to this interviewee.Most of the fresh graduates are not good team players. They are somehow arrogant and believe that they are talented and able to complete the tasks. If the fresh graduates did take part in co-curriculum and be the main committee, this will help prove that they are well trained and capable of managing the task. Co-curriculum also can build characters of people. It provides a platform for students to show their personalities. In addition, the social skill, which is also essential for each graduate, is practiced with various co-curriculums as well.Education in MalaysiaChoosing the wrong course and the poor result.Bahasa Malaysia is the national and official language in Malaysia. Bahasa Malaysia is used as the teaching language for primary school and secondary school. In recent years, Ministry of Education Malaysia has begun focusing on English teaching. However, so distan t Malaysian education still mainly uses Bahasa Malaysia as teaching media, while in working environment people mostly communicate in English. The fresh graduates who are unable to communicate in English fluently will be very tough when finding a job.Generally, the citizens in government organizations use Bahasa Malaysia as communication language. The citizens have got used to communicating in Bahasa Malaysia. However, there are a divide of Multinational Corporations which set their head offices or Asia peaceable offices in Malaysia. They require their Malaysian employees capable of communicating in English efficiently. Could Malaysia provide sufficient man authority armed with English communication skills? This is a forged challenge for Malaysia educations system.Besides, high-level education of Malaysia is not competitive compared to overseas education. In Malaysia, the top university is University of Malaysia (UM), but its ranking is the 167th so far, among the worldwide univers ity according to investigation of USNews.com. Compared with our neighbor country Singapore, the National University of Singapore (NUS) ranks at the 28th and Nanyang Techonological University (NTU) is the 58th. This is a great distance between the education systems of the two countries. Therefore, Malaysia government has to put a lot of effort into the education sector to upgrade the ranking and provide talents to international labour markets.The syllabus in local university is not sufficient or up to the satisfaction of working environment. Most of the students gain their knowledge purely from textbooks. They lack of practical skills. Facilities in university have not reached the global standard and still maintained in Kampung standard. Professors and researchers are not graduates from world-class Universities. Equipments in the laboratories are 10-20 years backward. These are all the reasons why more and more students are willing to think in overseas universities although the cos t of education is expensive.Moreover, the qualification lines of entering the universities are very low, as the corresponding university standard is low as well. University should set the higher entry qualification to increase the standard of coming students. Besides, the university should increase their level as well by employing professional stuffs to strengthen education levels. A lot of private colleges which are unqualified set by the Ministry of Education intend to promote as a university. The official explanation is this can improve the sum of money of undergraduates. However, it seems the government did not admit the quality of undergraduates into their consideration.It is suggested that Ministry of education should review the education system in Malaysia by referring to foreign education systems to improve Malaysia education system.With a huge number of students graduating with CGPAs below 3.0, it is unsurprising that these people become unemployable in the Malaysian priv ate sectors. It is recommended that students should take courses based on their capabilities and interests but not based on what is apparently in-demand in the parliamentary law (e.g., IT courses). If students are not interested in the courses, less effort would be put in the study hence, the result would not be scored in flying colour. Normally the company hire employees based on their paper results and abilities instead of their capabilities in other fields. schoolchild with lower scores would probably get lower opportunities of interviews.Types of unemploymentAfter the research, we found that there are four type of unemployment. And below is the summary of structural unemployment, frictional unemployment, and cyclical unemployment.Structural unemploymentWhen there are less suitable job provide for the people will cause to structural unemployment because there is a mismatch between the skills needed for the jobs and the skills of the unemployed workers. For example, A employee f ired by his car maker company because machine had replace human in making car and the employee does not know how to operate the machine, so the employee only have the skills of make car and he have the difficulty in searching a new job.Structural unemployment may also be affected by cyclical unemployment. If a nations economy is suffers from a recession, that means many of the unemployed workers become discouraged, while their skills become rusty and outdated. This means that they (unemployed workers) may not suitable for the job vacancies that are reserved for them when the economy turns to normal. Some economists see this scenario The implication is that sustained high demand may lower structural unemployment under the speech from British Prime Minister Margaret Thatcher during the 1970s and 1980s. This theory has been referred to as an example of path dependence.A lot of technological unemployment occurs, because of the replacement of workers had change into machines to produce m ore solventively, we called as structural unemployment. Thus technological unemployment refer to the way in which production increases by machine but lesser workers to produce the actual comparable level of output or more output every year. The fact that aggregate demand increase suggests that this problem is instead one of cyclical unemployment. As like we said before Okuns Law, the demand side must grow rapidly to take over the growing labor force but also the workers made redundant by increased labor productivity.Frictional unemploymentFrictional unemployment is the time period between jobs and unemployed workers when a worker is seeking for a better job and or a new environment. Frictional unemployment is always present in an economy no matter which country are u, so the level of unemployment is calculated by the unemployment rate minus the rate of frictional unemployment. This means that any changes in unemployment rate are normally represented in the simple statistics.Frict ional unemployment exists because both jobs and workers are multifarious, and a mismatch between the demand and supply. Such a mismatch can be related to skills, payment, work-time, location, attitude, and other factors. New entrants of employee such as graduated students and homemakers that want to return to the career can also include in frictional unemployment. Workers as well as employees accept a certain level of compromise or risk. Time and effort will be invested to find a better match but there is always a risk. This will increase the economy growth since it results in a better allocation of resources.However, if the mismatches are taking too long finding a job or too frequent, the economy will suffers a decreasing, since some work will not get done. Therefore, governments should search for multiple ways to reduce unnecessary frictional unemployment happen too deep through planning nicely which means including providing education, advice, training, and assistance such as hav ing some camp providing the more information about how to seeking job.An increase or decrease in labor market frictions will shift the curve outwards or inwards. The frictions in the labor market sometimes will illustrate graphically with a beverage curve, a downward-sloping, convex curve that shows a relationship between the unemployment rate and the vacancy rate. Changes in the demand or the supply for labor cause movements on the curve.Cyclical unemploymentCyclical unemployment, also known as deficient-demand unemployment, occurs whenever there is not enough aggregate demand in the economy to provide jobs for everyone who needs a job (People who seeking for job). Demand for most goods and services decreases will lead to less production and for sure fewer workers are needed when they are less product in the market, wages fall and fail to meet the equilibrium level. Its name is derived from the frequent shifts in the phone line cycle although unemployment can also be persistent (during the Great Depression of the 1930s).Besides, with cyclical unemployment occurs, the number of unemployed workers will increase and exceeds the number of job seekers, so that even with full employment and all open jobs were filled, they are still some workers will remain unemployed. These two friction cyclical unemployment and frictional unemployment happen because of the cyclical variables. For example, a surprising crepuscle in the money supply may influence the entire rational economic factors and will cause to restrain aggregate demand.SummaryStructural unemployment Where their skills becomes outdated.(Example person who do not use computer get fired because he do not know how to type in information into computer.)Frictional unemployment where people lose their jobs in order to look for better ones or still searching for job.Cyclical unemployment Unemployment occurs when there is a recession of economy in a nation.The thing about unemployment is that the economy has t o do with gross domestic product (GDP). We can produce more stuff with full employment. So if there is high unemployment, we should produce more but if we dont, this will lead to a bad economy growth in a nation.Malaysia Unemployment RateNormally unemployment rate in developed countries is higher than developing countries due to higher competition. For example, in the last three quarters of 2011, United Kingdoms unemployment rate has rose from 7.8% to 7.9% and followed by 8.3% respectively.At the same time, Malaysias unemployment rate has went up from 3% to 3.2% and followed by 3.3%, and was ranked at 170th place out of 198 countries based on their degree of severity (The Human Resource Ministry of Malaysia and CIA World Factbook, 2012). Observation reveals that youth unemployment rate is even greater than the overall unemployment rate for both of the countries suggesting that youngsters are facing more difficulties in finding jobs as compared to adults.In Malaysia, one of the badly affected sector is the nursing field whereby in 2010, more than 54% of the private nursing graduates were unemployed three to four months after graduating, compared to only 21.7% in 2008 (The Star, 2012). It is a worry situation as fresh graduates find themselves difficult to get employed despite having a unfluctuating academic qualification.Malaysia Unemployment Rate (From July 2010 until January 2012)The unemployment rate in Malaysia was last reported at 3 percent in April of 2012. Historically, from 1998 until 2012, Malaysia Unemployment Rate averaged 3.3600 Percent reaching an all time high of 4.5000 Percent in March of 1999 and a record low of 2.8000 Percent in March of 2012. The unemployment rate can be defined as the number of people actively looking for a job as a percentage of the labor force. This page includes a chart with historical entropy for Malaysia Unemployment Rate.Needs of the Labour MarketQuality of educationFirstly, the quality of education has become a signi ficant cause in current situation and it acquiring worst. Seems like every year our country produces more and more excellent students. This is proved where our students get better and better result (straight A) in SPM or PMR. With the increase number of straight A students in SPM and PMR, it seems like our student is improving a lot. Besides that, it is also easier to find degree holders anywhere. Surely, this is a good sign of the graduates quality.This statement may not bode well with some of the institutions out there but this should be taken as a challenge, not a mockery. (Abdul Razak Ahmad, New Straits times Sunday, March 20 2005) Most of the students will concern only on the major subject instead of minor subject.Besides, government also offer less minor subject to the students. Now the majority of student studying only for certificate, so they do select the easier subject compare to others. Most schools also began to commercialization to benefit, they will reduce the level of subject, resulting in a lot more apparent (look impressive but is worthless) of the University.EconomySecondly, fresh graduate unemployed because of the recession of economy in our nation too. The changing of the economic structure is a probably cause for the increasing number in unemployment.For many years, the manufacturing has been the strongest sector controlling the unemployment rate in the country until it is now being replaced by the services sector step by step. The services sector requires people who do not only know the right technical knowledge, but also those people who know the right soft skills wisdom, communication, interpersonal, maturity and business oriented. frugals growthEconomic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. An increase in the capacity of an economy to produce goods and services, compared from oneperiod of time to another. Economic growth can be measured in nominal terms, which include inflation, or in real terms, which are adjusted for inflation.As an area of study, economic growth is generally distinguished from developing economics. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic aspects of the development process in low-income countries.As economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure.Advantages of Economic GrowthSustained economic growth is a major objective of government policy not least because of the benefits that flow from a growing economy. high Living Standards For example measured by an increase in real national income per head of population see the evidence shown in the chart below. craft force outs Growth stimulates higher employment. The British economy has been growing since aut umn 1992 and we have seen a large fall in unemployment and a rise in the number of people employed.Fiscal Dividend Growth has a positive effect on government pays boosting tax revenues and providing the government with extra money to finance spending projects.The Investment Accelerator Effect Rising demand and output encourages investment in new capital machinery this helps to sustain the growth in the economy by increasing long run aggregate supply.Growth and Business Confidence Economic growth normally has a positive impact on company profits business confidence good news for the stock market and also for the growth of small and large businesses alike.Disadvantages of economic growthThere are some economic costs of a fast-growing economy. The two main concerns are firstly that growth can lead to a bracer in inflation and secondly, that growth can have damaging make on our environment, with potentially long-lasting consequences for future generations.Inflation risk If the ec onomy grows too quickly there is the danger of inflation as demand races ahead of aggregate supply. Producer then take advantage of this by raising prices for consumers.environmental concerns Growth cannot be separated from its environmental impact. Fast growth of production and consumption can create negative externalities (for example, increased noise and lower appearance quality arising from air pollution and road congestion, increased consumption of de-merit goods, the rapid growth of household and industrial waste and the pollution that comes from increased output in the energy sector) These externalities reduce social welfare and can lead to market failure. Growth that leads to environmental damage can have a negative effect on peoples quality of life and may also impede a countrys sustainable rate of growth. Examples include the destruction of rain forests, the over-exploitation of fish stocks and loss of ingrained habitat created through the construction of new roads, hote ls, retail malls and industrial estates.How does unemployment affect your economy?If more people are unemployed, less people pay taxes or less money for spending. Spending money boosts the economy through taxes which is why everything is taxed. The taxed money adds up when everyone shops. If one is unemployed, they live on what is save or what unemployment departments weaken them. Therefore, they do not have more money to spent, they only buy necessities.Also by not having the money to buy wants, not only needs, it means some business will have to cut prices in order to try to sell. By cutting prices this leads to less, no, or sometimes negative profits. Enough of this happens and that business might go out of business which leads to MORE unemployment. All of this leads to deflation which could lead to a depression. Deflation does not encourage spending, in fact it does the opposite. Also your dept numerically stay the same but now you earn less so it will be even harder to pay th em off.The consequences of unemployment to the Malaysian economyUnemployment can lead to var. emotionally and mentally. When stress occurs, the individual and the loved ones around them suffer. There would be unnecessary pressure and expectations and a case of low morale. Thus leading to misunderstandings.When misunderstandings occur, one may resort to violence and in turn affect the relationship or lead to an increase in crimes.Unemployment affects the economy by having a reduction in AD (aggregate demand), and economic growth. There would also be a lack of demand as people unemployed are saving.Unemployment influence and effect economic growthUnemployment affects the economy in ways that most people do not visually see. If more people are unemployed, less people pay taxes or have money for spending. Spending money boosts the economy through taxes which is why everything is taxed. The taxed money adds up when everyone shops. If one is unemployed, they live on what is saved or wha t unemployment departments give them. Therefore, they do not have money to be frivolous, they only buy necessities.Spending less doenst benefit the economic growth. With the increase in unemployment people will be more inclined to turn to a life of crime thereby decreasing the economic growth.Some of the well-known effects of unemployment on the economy areUnemployment financial costsThe government and the nation suffer. In many countries the government has to pay the unemployed some benefits. The greater the number of the unemployed or the longer they are without work the more money the government has to shell out.Therefore, the nation not only has to deal with the lost income and diminish production but also with additional cost.Spending powerThe spending power of an unemployed person and his/her family decreases drastically and they would rather save than spend their money, which in turn affects the economy adversely.Reduced spending power of the employedIncreased taxes and the insecurity about their own work may affect the spending power of the working people as well and they too may start to spend less than before thus affecting the economy and also the society in a negative manner.