UNEMPLOYMENT has skyrocketed worldwide amid the coronavirus pandemic, and Malaysia is not spared.

The Statistics Department recently revealed that our unemployment rate spiked to 5.3% in May, and warned that the economic downturn is so severe that it is likely to be worse than the recession in 1987. Should that happen, the country could hit an all-time high of more than a million unemployed people. As it is, one out of 20 working adults has lost their source of income.

The thing is, statistics don’t always accurately reflect reality, which is far grimmer than you think.

Last week, I was invited by a local TV station to speak on Malaysia’s economy and consumer spending behaviour post-Covid-19. Sifting data in the course of my preparation, I found more causes for concern.

In the Statistics Department’s report on the labour force, the word “employed” is defined and used broadly, referring to anyone engaged in productive economic activities and receiving remuneration for working at least one hour a week. Therefore, it includes the self-employed, on-request workforce and gig workers.

Many of those categorised as “employed” are not fixed-salary employees, and are suffering a much lower income due to the virus crisis. They are part of the labour force that is highly dependent on the overall economic activity at both the local and global levels. In some cases, their income has plunged to the point that their situation is hardly different from those who are unemployed. However, this is not reflected in the statistics.

Take a stroll down the street and you will find that many businesses have shuttered or shrunk. Try asking around, and you will learn that many have had to take a pay cut or been laid off. And not to mention the large number of graduates finding it difficult to secure a position that matches their skills, resulting in many settling for a less-desirable job, or even a dead-end one, with little chance of career development.

What will happen to these people when the pandemic ends, and the future we’ve envisioned for the nation?

The government has rolled out three stimulus packages, totalling more than RM290 billion, to cushion the economic impact of Covid-19 and the movement-control order. However, their effectiveness is likely to be short-lived.

The packages are primarily focused on retaining jobs, encouraging rehiring, and helping local businesses by providing them with cash aid, tax relief and financing assistance. The results have been far from ideal, and are unsustainable in the long run. Many employers are unable to resume normal operations due to the shrinking economy, eventually resorting to retrenching employees or closing down.

As for individuals, one-off cash assistance, Bantuan Sara Hidup and e-wallet incentives are just temporary aid, and the moratorium on loan repayments only defers their problem. These measures increase disposable income for the time being, but the challenge truly starts when they stop.

The pandemic threat isn’t over, with infections and deaths in some countries continuing to climb. We are lucky to have largely contained the disease, but mind you, we have yet to reopen our borders, so there is no guarantee that a fresh wave won’t hit. Hopefully, we are now better prepared for the possibility, as we can ill afford another lockdown. There is a limit to how long the government can keep channelling funds to help businesses and citizens stay afloat.

Covid-19 has amplified problems that have long plagued our labour force. Nearly 75% of workers are in low- and semi-skilled jobs, which are easily replaced and have a high turnover rate. After more than 60 years of independence, low-skilled positions still dominate the labour market. An MIDF Research report showed that last year, 68 out of every 100 vacancies were for such jobs. It was already tough for qualified applicants to secure employment that matched their skill level before the contagion, resulting in underemployment even then. We have yet to transition into being a nation with a highly skilled workforce, and this may be a good time to re-evaluate our labour policies.

Today, there are more part-time and freelance positions, which offer few to no benefits and job security. The nature of the labour force is rapidly changing, accelerated by the coronavirus, with new concepts, like the gig economy and teleworking, increasingly becoming mainstream. However, the government is not seeing to it that its policies keep up with the changes.

Of the RM290 billion allocated for the stimulus packages, a large chunk was set aside for low-intensity measures, such as employee retention and re-employment assistance, with not much emphasis on job creation or upskilling workers. The virus has substantially changed our lives, and to effectively tackle employment-related issues, we have to create more jobs and enhance job security in emerging industries that are suited to a post-pandemic world. The workforce must be trained towards this end, and more people empowered to count themselves among the highly skilled.

For all this to bear fruit, concerted effort from the public and private sectors is required. The above-mentioned problems, if left unaddressed, will result in decreased household spending, which has the cascading effect of business closures and retrenchment cycles. Let’s not forget that 60% of Malaysia’s gross domestic product comprises household consumption.

The government’s role in spearheading change is vital. A bold new vision is needed to strengthen the workforce instead of carrying on with moratoriums and financial aid, hoping that the pandemic will simply be over someday and the nation will return to the status quo. – July 21, 2020.

* Kelvin Lee is a member of Agora Society. Both a dreamer and realist, he is constantly figuring out ways to balance the two. He believes that by defying the norm, one can pave the way for a better future.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.