The number of employed persons in Malaysia remained on the increasing trend in the second quarter of 2023, albeit at a slower rate of 2.8% (444,900 persons) year-on-year. This was compared to 3.1% in the previous quarter, to record 16.15mn persons, according to the Department of Statistics’ Labour Market Review Q2 2023. During the same period, the employment-to-population ratio (which indicates the ability of the economy to create employment) rose one percentage point (p.p) from the same quarter of the preceding year, to 67.5%.
Quarter-on-quarter, the number of employed persons increased by 0.5%, which translates to a growth of 84,100. Thus, the employment-to-population ratio also grew by 0.2p.p as against the previous quarter. Most of employed persons comprised the semi-skilled occupations category, making up a share of 59.2% (9.55mn persons) in Q2 2023. This category rose 2% (,184,000) compared to the same quarter a year ago. Furthermore, the skilled occupations category which made up 27.9% of the total employed persons, up by 2.9% (125,600) year-on-year and registering a total of 4.51mn persons. The remaining 12.9% was in the low-skilled occupations category, which grew by 7% (135,300) and accounted for 2.08mn persons.
Against the preceding quarter, the number of employed persons in all skill levels recorded increases albeit at a moderate rate. The semi-skilled category grew 0.4% (37,200) from Q1 2023. Meanwhile, the number in skilled and low-skilled occupation categories rose 0.6% (25,400) and 1% (21,400) respectively.
By status in employment, all categories of employed persons indicated year-on-year positive trends in Q2 2023, except unpaid family workers. Making up 3% of the total employed persons, this category declined 1.2% (6,000) from Q2 2022 to record 490,300 persons. At the same time, the employees’ category, made up of paid employment in the public and private sectors, encompassed 75% of employed persons. The number in this category surged 1.9%, or 228,400 persons, to record 12.10mn persons. Those employed as own-account workers are those involved in various roles from traditional employment as farmers, retailers and hawkers to professional employment such as consultants and freelancers. This group comprised 18.4%, or 2.97mn persons, after posting a rise of 7.1% (195,800) compared to the same quarter of the preceding year.
Meanwhile, the employers’ category, which composed 3.6% of total employed persons, went up by 4.8% (26,700) and thus accounted for 585,200 persons in Q2 2023.
However, a quarter-on-quarter analysis showed a positive trend in all categories:
• The employees’ category grew 0.4% (45,500),
• Own-account workers grew by 1.1% (32,700),
• Both employer and unpaid family worker categories improved marginally by 0.6% (3,500) and 0.5% (2,400) respectively.
In the second quarter of 2023, the number of persons who worked less than 30 hours per week declined by 13.6% (44,000) from Q2 2022 to record 280,400 persons. This group accounted for 1.7% of total employment, after it declined by 0.4p.p compared to the same quarter of the preceding year. A similar trend was also observed on a quarterly basis as the number of employed persons working less than 30 hours per week increased by 2.3% (6,200) while the share of this category to total employed persons remained the same as the previous quarter. In line with this, the rate of time-related underemployment declined by 0.2p.p on a yearly basis to 1.2%. The number of persons in time-related underemployment declined by 12.5% (26,500) compared to the same quarter of 2022 to record 186,300 thousand persons. However, quarter-on-quarter registered that the number of time-related underemployment grew by 6.7% (11,700) while the rate increased by 0.1p.p.
Another dimension of underemployment the report assessed would be associated with skill or generally defined as those who wanted to change their current employment situation in order to fully utilised their occupational skills. Given data availability from the Labour Force Survey (LFS), this indicator is measured using proxy variables of occupation and educational attainment.
As of Q2 2023, the number of persons in skill-related underemployment escalated by 6.4%, gaining another 115,000 as against the same quarter of the preceding year, to record 1.91mn persons. As such, the share of tertiary-educated employed persons working in semi-skilled and low-skilled occupations increased by 0.7p.p to 37.4%. In comparison to Q1 2023, those who were in skill-related underemployment also posted an increase of 0.4% (7,400) while the rate remains constant. Despite the slight increase in number, the fact remained that more than one-third of tertiary-educated employed persons are prevalent in semi-skilled and low-skilled occupations. Lastly, the number of unemployed persons declined 9.5% (60,000 persons) from the same quarter in the preceding year, which recorded a total of 581,400 unemployed persons in Q2 2023. Consequently, the national unemployment rate stood at 3.5% after registering a year-on-year drop of 0.4p.p.
The unemployment situation also improved compared to Q1 2023, with the number of unemployed persons decreasing by 0.9%, or 5,500, despite the unemployment rate remaining unchanged from the previous quarter. As for the population outside the labour force as against a year ago, the number in Q2 2023 declined by 1.1% (78,300) to record 7.18mn persons. This decline, together with an increase in the labour force during the quarter, indicated a shift from the inactivity group into the labour market.
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