• Mismatch in demand and supply of civil service positions shows that many Malaysians have not escaped from the middle income trap

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 24th of August 2016

    Mismatch in demand and supply of civil service positions shows that many Malaysians have not escaped from the middle income trap

    When the Economic Transformation Program (ETP) was first launched in 2010, one of its key performance indicators was the creation of an additional 3.3 million jobs by 2020 over 60 percent of which will be in the medium-income or high income salary brackets. Last week, PEMANDU CEO, Datuk Seri Idris Jala, was reported as saying that Malaysia has moved out of the middle income trap.[1] A deeper analysis and understanding of some of the job figures say otherwise.

    If the ETP was successful in creating a vibrant and growing economy that is driven by the private sector, this should result in the creation of many desirable and well-paying jobs in the private sector. But according to figures released by the Public Service Commission (or Suruhanjaya Perkhidmatan Awam (SPA)), the demand for public sector jobs is at an unbelievable high level and far outstrips the supply of such jobs.

    From 2011 to 2015, the SPA received more than 1 million applications for jobs in the civil service. This figure reached a high of 2.1 million in 2013 before falling to 1.59m in 2014 and increasing to 1.63m in 2015 (See Table 1 below). These are very high figures especially considering that the number of civil servants in Malaysia was 1.6m in 2015. While jobs in the civil service will continue to be desirable because of job security and other perks (such as medical care, various allowances and government pensions), this high demand is an indicator that the private sector is not offering enough well-paying jobs to stem the demand for public sector jobs.

    What should be equally worrying is that the number of civil service jobs being offered has decreased from 46,503 in 2011 to 30,964 in 2015. This means that only a small handful of applications are successful in entering into the civil service and this % has decreased from 4.1% in 2011 to 1 mere 1.9% in 2015. This raises the question of what jobs the unsuccessful applicants end up doing.

    Among those successful applicants, a majority (plurality, in some years) of them have only up to a certificate level qualification at most. For example, in 2015, 54% of the successful applicants were hired for jobs which required only a PMR, SPM or Certificate level qualification (See Table 2 below).

    This is a clear indicator that those who desire civil service jobs the most are also those with the lowest qualifications. This is not surprising given that many jobs at the bottom of the economic ladder have been taken up by foreign labour. The only place where foreign labour cannot hold jobs is in the civil service, hence the high number of applications and also appointments at this level.

    This can be seen from the statistics from job application for specific jobs which are taken from the Public Service Commission website.[2] Chart 1 shows the applications and appointments for the position of a general assistant at the Grade 11 level which pays approximately RM1200 as a monthly salary and requires a minimum of PMR as an academic qualification. There were 87281 applicants for 16 positions (0.02%).

    Chart 2 shows the number of applicants and appointments for the position of a food preparation assistant at the Grade 17 level which pays approximately RM1400 as a monthly salary and requires a minimum of SPM as an academic qualification. There were 65041 applications for 24 positions (0.04%).

    Chart 3 shows the applications and appointments for the position of an IT officer at the Grade 41 level which pays approximately RM2300 a month and requires a minimum of a degree as an academic qualification. There were 17895 applicants for 61 positions (0.34%).

    Charts 1 to 3 shows that the demand for public sector jobs far outstrips supply and that the mismatch between demand and supply is at its most acute at the level which requires the lowest academic qualification.

    From a GDP per capita standpoint, Malaysia may have escaped the middle income trap. But those who have benefitted from this increase are the top 20% to 30% with high wages and also businesses which earn large profits but don’t share their earnings with their workers, especially those at the bottom of the ladder.

    For the bottom 40%, the struggle to get out of the middle income trap continues and many of them are still hoping to obtain the security of a public sector job which are becoming more and more scarce.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    Chart 1: Applications for General Assistant Grade 11

    Chart 2: Applications for Food Preparation Assistant N17

    Chart 3: Applications for an IT officer Grade 41

    [1] http://www.thestar.com.my/business/business-news/2016/08/17/idris-jala-malaysia-no-longer-in-middle-income-trap/

    [2] http://online.spa.gov.my/online/index.php. It is possible that some of the applicants would have applied for multiple jobs thereby inflating the application statistics e.g. people who apply for the N41, N17 and even N11 jobs. If this was the case, it would only highlight the lack of opportunity in the job market if even those who are qualified to apply for graduate level entry positions would also want to apply for positions which only require a SPM or PMR qualification.

1 Comment

  1. Alan Tan says: August 24, 2016 at 10:41 pmReply

    Hi. Regarding Idris Jala’s statement that Malaysia has moved out of the middle income trap, I suspect there is some fudge in the GNI nos. Checked the USD/MYR rate he is using to calculate the 2015 US$ GNI per capita. I suspect he is using a 3 or 5 year moving averages instead of the current rate. But our income is based on actual forex rate, not some averages. In any case, this year’s GNI in US$ terms will look plain sad, even if Mr Jala uses averages. Let me know if my suspicion is true. Thanks.