PETALING JAYA: More than 65% of Malaysian degree holders earn less than RM3,000 a month, a wage barely enough to cover basic needs, with little room for savings, investments or upward mobility, according to a recent study that warns of growing economic risk tied to higher education.
The study, titled The ‘Gaji Cukup Makan’ Economy: When Higher Education Becomes an Economic Risk, paints a sobering picture of graduate employment in Malaysia.
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It highlights that over 70% of graduates are employed in semi-skilled or unskilled jobs—suggesting a severe mismatch between qualifications and actual work.
According to the author of the study, Dr Mohd Yusof Saari, the report exposes a deep structural disconnect between higher education and employment, where earning a degree no longer ensures salaries that reflect one’s qualifications and skills.
“This reveals the true state of graduate employability, which is often reported to be above 80 per cent.
“But the report highlights that these figures can be misleading, as they include all forms of employment without accounting for skill mismatches or wage levels.
“The reality is that 65% of degree holders in this country earn a monthly salary of under RM3,000,“ he told New Straits Times in a statement.
Dr Mohd Yusof, who compiled the study under the Malaysia Labour Market Insight Series, warned that the declining return on higher education is becoming a structural crisis. While skill mismatches are also present in developed nations, Malaysia’s persistently low salaries worsen the impact.
“This offers no protection to those working in jobs that do not match their qualifications.
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“In Malaysia, the mismatch leads to deeper economic vulnerability, limits upward mobility, and reduces the incentive to pursue higher education—especially among lower-income groups,” he stated.
As a result, higher education is becoming a growing financial gamble, especially for young Malaysians burdened by rising tuition costs without the promise of matching salaries.
The widening gap between academic qualifications, job quality and career rewards is also eroding the long-held belief that education is a reliable path to upward social mobility.
“The report identifies several key causes of this crisis, including sluggish wage growth, weaknesses in pre-employment preparation, and low demand for skilled labour from the private sector.
“These factors have resulted in a stagnant wage trajectory, where the income gap between graduates and non-graduates is minimal - especially during the early stages of their careers,” he said.
The author urged for structural reforms, starting with replacing misleading employability indicators with metrics that truly reflect skill matching.
He also proposed the creation of a long-term system to track graduate outcomes, the overhaul of industrial training and pre-employment programmes, as well as the modernisation of industries and job redesign to tackle deeply embedded structural problems.
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“The government must also introduce wage guidelines as an advisory tool to address wage suppression.
“The report proposes a holistic policy framework that integrates education planning, labour market demand and wage outcomes - moving beyond fragmented policies towards a coherent, national, outcome-based strategy.”
He added that the report offers a broad overview of the structural issues plaguing Malaysia’s graduate labour market, including stagnant wages, skill mismatches, and flaws in the transition from education to employment.
Beyond highlighting key policy shortcomings, the study also urges further research to turn these insights into focused, high-impact reforms.
“Such follow-up is crucial in designing appropriate policy interventions, tailored to the realities faced by graduates across various sectors, demographics and education tracks.
“When graduate salaries are barely distinguishable from those of non-graduates, investing in higher education is no longer a guaranteed path to social mobility, it has become an economic risk,” he concluded.
