MALAYSIA’s unemployment rate increased to 4.5% last year, the highest rate since 1993 when the recorded rate was 4.1%, the Statistics Department said.

Chief statistician Dr Mohd Uzir Mahidin said unemployment rose to 772,900 persons at a rate of 4.8% in December 2020, while the number of employed persons edged up 0.1% month-on-month, equivalent to 19,300 persons, to 15.22 million persons after registering a marginal decrease in the previous month.

“The employment-to-population ratio, which indicates the ability of an economy to create employment was unchanged at 65.1%,” he said in a statement on the Statistics of Labour Force for December and fourth quarter of 2020.

He said employed persons by status of employment in the employee’s category, which comprised 77.6% of the overall employment, augmented by 0.2%, or 23,500 persons, to 11.81 million persons against the previous month. 

Uzir said own-account workers, which consisted of 15.8% of the overall employment, continued to decrease for the third month by 0.6% to 2.4 million persons in December 2020. 

He said this group comprised mostly of daily wage earners working at farmers’ markets, night markets, and stalls, freelancers, as well as smallholders. 

“The number of employed persons who were temporarily not working, increased to 146,200 persons as against 142,000 persons in November 2020 due to the implementation of phases of the movement-control order throughout the whole month, as well as short school break and festive holiday. 

“This group of persons, who were most likely not able to work, was not categorised as unemployed as they had work to return to,” he said.

He said the labour market condition was still influenced by the health crisis and economic consequences in December 2020, causing a slower recovery momentum in the labour market.

Uzir said the labour market remained competitive with the number of labour force increased by 27,800 persons to 15.99 million persons in December 2020 from 15.96 million persons in November 2020.

The labour force participation rate (LFPR) remained at 68.4%.

Additionally, the number of persons outside labour force registered a decrease of 2,600 persons to 7.37 million persons against November 2020 with the largest composition was due to schooling or training.

On the labour supply situation for Q4 2020, he said the market condition rose gradually as the labour force and employment situation continued to increase compared with the preceding quarter, recording 15.92 million persons and 15.16 million persons respectively. 

During the quarter, there were 533,700 persons who worked less than 30 hours per week due to working conditions or insufficient work as compared with 403,800 persons in Q3 2020.

“Out of this total, 369,100 persons were categorised as time-related underemployment since they worked less than 30 hours a week and were able and willing to work extra hours (Q3 2020: 300,800 persons).

“They comprised 2.4% of the overall employment in Q4 2020.” 

Meanwhile, Uzir said skill-related underemployment comprising those with tertiary education but working in semi-skilled and low-skilled occupations accounted for 1.89 million persons or 37.4% of the total of employed persons with tertiary education (Q3 2020: 1.76 million persons; 36.8%).

He said throughout 2020, based on the quarterly averages data, the LFPR eased by 0.3 percentage points to record 68.4% (2019: 68.7%) while the number of employed persons decreased by 0.2% to 15.1 million persons.

Uzir said the country experienced a slower labour demand in 2020 due to adverse impact of the Covid-19 pandemic and the health crisis had hugely impacted the labour force, leading to an unemployment rate above 4% against an average of 3% recorded in the pre-crisis period. 

“Hence, it is foreseen Malaysia’s labour market will remain in a challenging situation in early 2021 but various assistances and initiatives introduced by the government will cushion the impact of the pandemic on the labour market,” he added. – Bernama, February 8, 2021.