Table of Contents

Abstract ........................................................................................................................................... 2

Introduction ..................................................................................................................................... 3

Body Analysis ................................................................................................................................. 8

Characteristic Malaysian Market Labor ...................................................................................... 8

Specific Category in Market Labour ......................................................................................... 12

Problem of Characteristic of Labour Market in Malaysia......................................................... 15

Recommendation .......................................................................................................................... 18

Conclusion .................................................................................................................................... 19

Apendix ......................................................................................................................................... 20

Reference ...................................................................................................................................... 22

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Abstract
Malaysia is expected to have many populations of people and the total number of the population
is increasing every year. The demand of the market labor also to be expected will increase. In
this paper is about to investigate the current labor market in Malaysia. It also to find the
characteristics of the Malaysia labor market which mostly the major characteristic of the
Malaysia workers. In addition, this paper also about to investigate the specific category and the
component of each sector in Malaysia that conduct to the country economic growth and its GDP.
Along with that, this paper will state the problem of the Malaysia labor market which the
challenges face by Malaysia. By this, we also will provide a few recommendations for Malaysia
to upgrade and solve the problem that they face so that Malaysia labor market will run smoothly.
Lastly, there will the conclusion about the whole body of this assignment.

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Introduction
A labour market is the place where workers and employees interact with each other. In
the labour market, employers compete to hire the best, and the workers compete for the best
satisfying job(Times Internet Limited, 2014).A labour market in an economy functions with
demand and supply of labour. In this market, labour demand is the firm's demand for labour and
supply is the worker's supply of labour. The supply and demand of labour in the market is
influenced by changes in the bargaining power.

The nominal market in which workers find paying work, employers find willing workers,
and wage rates are determined. Labour markets may be local or national (even international) in
their scope and are made up of smaller, interacting labour markets for different qualifications,
skills, and geographical locations. They depend on exchange of information between employers
and job seekers about wage rates, conditions of employment, level of competition, and job
location.

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 Malaysia Population

The population of Malaysia stands at over 28 million in 2012. Malaysia's population

comprises many ethnic groups, with the Malays at around 50.4% making up the majority and
other indigenous groups in Sabah and Sarawak at 11% around of the population. By
constitutional definition, Malays are Muslims who practice Malay customs and culture. Around
23.7% of the population is of Chinese descent, while Malaysians of Indian descent comprises
approximately 7.1% of the population. Indians began migrating to Malaysia in the early 19th
century.

Other Malaysians also include those whose origin, can be traced to the Middle East,
Thailand and Indonesia. Europeans and Eurasians mainly include British who settled in Malaysia
since colonial times. The population distribution is highly uneven, with some 20 million
residents concentrated on the Malay Peninsula, while East Malaysia is relatively less populated
(Wonderful Malaysia, 2007-2014)

However, Based on The Star Online's monitoring of the population clock, approximately
one birth rate occurs every minute, which means the 30 million figure will be reached.
According to the Department's population projections, the figure will reach 38.5 million people
by the year 2040, comprising 19.6 million males and 19 million females.The Department also
stated that as at 2010, Bumiputras make up 67.4% of the population, Chinese (24.6%), Indians,
(7.3%), with other races making up the remaining 0.7% (KUMARI, 2014).

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Gross Domestic Product Malaysia

Gross Domestic Product (GDP), is the total market value of all final goods and services
produced in a country in a given year, equal to total consumer, investment and government
spending, plus the value of exports, minus the value of imports(TRADING ECONOMICS,
2014). The gross domestic product (GDP) measures of national income and output for a given
country's economy. The gross domestic product (GDP) is equal to the total expenditures for all
final goods and services produced within the country in a stipulated period of time.

The Gross Domestic Product (GDP) in Malaysia was worth 303.53 billion US dollars in
2012. The GDP value of Malaysia represents 0.49 percent of the world economy. GDP in
Malaysia averaged 65.56 USD Billion from 1960 until 2012, reaching an all-time high of 303.53
USD Billion in 2012 and a record low of 2.42 USD Billion in 1961. GDP in Malaysia is reported
by the World Bank Group (TRADING ECONOMICS, 2014).

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Type of Unemployment in Malaysia.

Frictional unemployment

Frictional unemployment refers to the portion of the unemployment rate that

results from labour market turnovers. This unemployment is ongoing and
includes job transitions and communication lags between employers and
potential employees, people entering and exiting the labour force and from the
constant creation and destruction of jobs(InvestingAnswers, 2001-2014).

For example, the unemployment temporarily experienced when looking for a

new job.

Structural unemployment

A longer-lasting form of unemployment caused by fundamental shifts in an

economy. Structural unemployment occurs for a number of reasons, workers
may lack the requisite job skills, or they may live far from regions where jobs
are available but are unable to move there. Or they may simply be unwilling to
work because existing wage levels are too low. So while jobs are available,
there is a serious mismatch between what companies need and what workers
can offer. Structural unemployment is exacerbated by extraneous factors such
as technology, competition and government policy(Investopedia US, 2014).

Caused by a mismatch between the location of jobs and the location of job-
seekers. "Location" may be geographical, or in terms of skills. The mismatch
comes because unemployed are unwilling or unable to change geography or
skills.

Cyclical unemployment

A factor of overall unemployment that relates to the cyclical trends in growth

and production that occur within the business cycle. When business cycles are
at their peak, cyclical unemployment will be low because total economic
output is being maximized. When economic output falls, as measured by the
gross domestic product (GDP), the business cycle is low and cyclical
unemployment will rise.

Economists describe cyclical unemployment as the result of businesses not

having enough demand for labour to employ all those who are looking for
work. The lack of employer demand comes from a lack of spending and
consumption in the overall economy(Investopedia US, 2014).

When there is not enough aggregate demand for the labour. Caused by a
business cycle recession.

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Technological unemployment

Technological unemployment occurs when technological change

causes some workers to lose their jobs. Technological
unemployment is considered to be part of a wider concept known as
structural unemployment.Caused by the replacement of workers by
machines or other advanced technology.

Seasonal

An elevated level of unemployment that is expected to occur at

certain parts of the year. An occupation is not in demand at certain
seasons. For instance, amusement parks may experience seasonal
unemployment during the winter months because less people will
visit the parks during this time,construction workers in winter, and
ski instructors in summer.

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Body Analysis

Characteristic Malaysian Market Labor

There are many characteristic of Malaysian Market Labor that conducts the Malaysia economic
growth.

1. Age
According to the graph above, it has shown the percentage age of the total Malaysian
labour force in the year of 2011 and 2012. According to the graph, the highest number of
Malaysian labour force is at the age of 25-34 years old especially female. This is because
most people at this age are graduated students who enter the market labour after diploma,
degree, and Master.
The lowest number of Malaysian labour force is at the age of 55-64 years old. This
is because most people at this age taking their retirement according to their ability to
works. As their age are getting older, their ability force to work are also getting weaker

Figure 1: Percentage distribution of employed persons by sex and age group, Malaysia, 2012
(LABOUR FORCE SURVEY REPORT, 2013)

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2. Education
Graph above shown Labor force participation rate of education attainment in the year
2011 and 2012. According to this graph, the most number of people who conquer the
market labor for the education attainment is the group from the secondary education with
55.$% in year 2011 and increase to 55.7% in the year 2012. The less group of people in
the market labor for education attainment is the group who have no formal education with
3.1% in year 2011 and decrease to 3.0% in year 2012.
However for the group has primary education is 17.1% in year 2011 and
decrease to 17.0% in year 2012. And lastly, the tertiary education is 24.3% for both year
2011 and 2012.

Figure 2: Percentage distribution of employed persons by educational attainment, Malaysia, 2011 and 2012
(LABOUR FORCE SURVEY REPORT, 2013)

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3. Gender
The graph below has shown the number of employer person by occupation and gender in
Malaysia by the year 2012. According to the graph, others categories are conquered by
male which their number are higher than female. However, there are two categories
where the numbers of female are higher than male. Those are the professional category
and clerical support workers category. In this occupation, female seem to be more than
male which 686.6 thousand persons, 55% in Professional category and 843.7 thousand
persons, 72.1% in Clerical support workers category.

Figure 3: Number of employed persons by occupation and sex, Malaysia, 2012

(LABOUR FORCE SURVEY REPORT, 2013)

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4. Ethnic Group

The table shows the percentage distribution of employed persons by ethnic group in
Malaysia by the year of 2011 and 2012. The whole market labor in Malaysia is fully
conquered by the citizen of Malaysia with 86.2% in year 2011 and it has been increase to
86.5% in year 2012. This followed by the non-citizens with 13.8% and it has been decrease
to 13.5% in year 2012.

In this table, the majority groups of people who in the Malaysian labor force are the
Bumiputera which consist by the Malay and other Bumiputera with 55.7%. The balances are
from Chinese, Indians and others ethnics in Malaysia. The percentage of Chinese in market
labor in Malaysia is 23.3% for year 2011 and it decrease to 23.0% in year 2012.

Figure 4: Percentage distribution of employed persons by ethnic group, Malaysia, 2011 and 2012

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Specific Category in Market Labour
Before and the earlier of achievement of independent, Malaysia are known as farming country.
Even though Malaysia now are going to be factories country, farming sector are still important
sector and give huge contribution to Malaysia economy growth.

A country economy can divide into many sectors to determine the proportion that related to the
sectors. The categories are the continuous of the range form the natural environment. It persist
are begin with the primary sectors. The primary sectors are more in raw materials from natural
sources like mining and agriculture. Its also make range of raw materials of natural sources
become increases.

Figure 5: Percentage Distribution of GDP by Economic Activity, 2012(Anon, 2014)

PRIMARY SECTOR

The primary sector of economy are include a small sector such as agriculture, forests,
fishery, farming and mining. The small sector are also the harvest products from the earth. The

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primary sector are the economy sector that throw out the raw materials and basic foods such as
fruits, grains and any else.

In year 2012, primary sector was controlling by agriculture sector. Based on Percentage
Distribution of GDP by Economic Activity, in every states agriculture sectorproduce little. The
biggest percentage for agriculture ineach states was controlling by Kelantan states. While, in
Kuala Lumpur, theres no agricultural sector for that states.

Mining. Every states have a little percentage in mining sector. The mining sectors was
controlling by Sabah and Sarawak states.For Sabah was 20.7% and Sarawak was 21.1%. Sabah
and Sarawak states mining sources are natural gas.(Anon, 2014)

SECONDARY SECTOR

In Malaysia are consists of factories and construction. The secondary sector is the
economy sector that processing the raw materials to make semi-finished goods and finished
goods also. For the secondary sector are conducted by manufacturing, fabrication and
construction such as building, fabric factories, furnished factories and any else.

The secondary sector was controlling by manufacturing and construction. The second
largest sector that controlling economy in Malaysia after service sector. Based on Percentage
Distribution of GDP by Economic Activity, the largest percent was controlling by Penang in
manufacturing sectors with amount 48.4%. The second largest manufacturing sectors was
controlling by nine state with 48.3%. Then, the lesser manufacturing sector was in Federal
Territory of Kuala Lumpur with 4.0%. (Anon, 2014)

The construction sectors just take a few percent in every states. The construction
sectors was the second sector that take a few percent after mining sector. The largest percent was
controlling by Sarawak states about 21.1% following with Sabah with amount 20.7%.(Anon,
2014)

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TERTIARY SECTOR

Tertiary sector are include many service sector that related to the national economy. This
sector also help improve the economy to international through the service sector such as tourism.
In Malaysia there were many tourism destinations in every state especially in Malacca, Penang,
Langkawi and any else.

Tertiary sector are also including with people needs like water, electricity, gas,
transportation, connection, food service and many more. Based on Percentage Distribution of
GDP by Economic Activity, service sector was the largest sector that controlling economy
growth in year 2012. In Malaysia, 54.6% was controlling by service sectors. In states, the largest
percent 89.9% that located in Federal Territory of Kuala Lumpur. Federal Territory of Kuala
Lumpur was provide more service for people such as Transportation service like bus, train and
taxi. Federal Territory of Kuala Lumpur also place for administrative center for government
department and private department such as Bank Negara Malaysia, Ministry Department and any
else.(Anon, 2014)

NKEA Oil, Gas and Energy (OGE) strives to create the downstream division in Malaysia, hence
guaranteeing the creation and investigation of option vitality proceeded. It will likewise
straightforwardly help the business which is one of the nation's budgetary development motor the
most essential. One of the incredible accomplishments of the business in 2012 OGE is when
Petroliam NasionalBerhad (PETRONAS) recorded its first oil generation in November2012 from
the oil fields found Gumusut-snapper out seaward Sabah. As deepwater advancement in
Malaysia second, it is a huge point of reference in the business Malaysian oil and gas because of
the methodology of arranging and usage for 14 months. Creation is relied upon to arrive at
greatest of 25,000 barrels of oil for every day (barrels for every day, bpd) when working two
wells is increased. (Anon, 2014)

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Problem of Characteristic of Labour Market in Malaysia
Problems in the labor market in Malaysia is the lack of more specific skills that are known to
lack of English language skills, ICT and professional and technical skills.

1. Higher education system in Malaysia.

Admission and completion rates of higher education in this

country is substantially lower than in other countries and can be
distinguished by the level of income.
This has caused a shortage of higher education graduates.
This problem is getting worse for university students because most
students do not choose a field of study related to the Malaysian
industry.
Therefore, in recent years we have seen too many highly educated
graduates are unemployed. This is because, as well as selected
courses offered by them are not offered in Malaysia.

(M. Thangavelu and Guangzhou, 2014)

2. Lack of available skills training among firms

Although Malaysia has good skills development infrastructure, this

does not mean there is no shortage despite progress in Malaysia is
increasing in recent years.
We can see the difference between large and small companies manage
employee skills in a particular field.
It turns out that a big company is more concerned with the quality of
work because they also offer skills training even if the employee
experienced while small companies only hire people who already have
experience only.

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3. Regulation and control over the importing of foreign workers

should be tightened further so that there is no problem in Malaysia.

Foreign workers who come to Malaysia to find work often create
problems for the people of Malaysia.
For example often happens every year is a case of theft, murder and
rape. Most of the events identified were foreigners.
Otherwise, many foreign workers working in Malaysia are illegally
without any passports. If the problem is not solved in the field of
employment, we give to foreign workers.
This is because companies prefer to choose foreign workers because
the fees are cheaper than local workers

( Marhani, Esa and Adnan, 2014).

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4. Shows a lack of innovative readiness among Malaysian companies.
Lack of innovative readiness arising from: -

i) Lack of commitment to the development of technology-based:

This happens because most of the people working at factories in Malaysia

consist of people who are aged, the technology-based equipment is not as
important to them as they are difficult to learn the knowledge of the
technology available now.

ii) A weak education system:

Occur because of too much technology-based equipment. Teenagers now
prefer to use technology to express themselves, play games, watch drama and
others. But they do not use technology for education. Therefore, the education
system is weak because there are no limits to the technology limiting social
sites and games. (Amandateoh.com, 2014)

iii) Lack of ability to produce technology-intensive:

Efficiency of the labour force in Malaysia is not as good as in other countries,
but the ability to produce a product on the rise, but still no shortage.

iv) Lack of scientific and engineering manpower:

Occurred because the labour force in Malaysia do not have properties that
would like to try something new and the fear of failure. Therefore, not many
people enter the field.

v) The relation between industrial R & D and higher education

institutions:

Most of higher education offers a cost to the student by student interest, but
most of the cost price does not meet the demands of industry. Thus, the
occurrence of the problem are the lack of student unemployed workers in the
industry.

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Recommendation
Malaysia is a country steadily growing, the jobs that have higher productivity required so it can
meet all the demands of consumers. Therefore, there are some suggestions to help Malaysia in
providing quality of labor market from a variety of fields.

A company must attract, develop and retain the skills needed in order to create a modern
high productivity jobs.

some of the proposals calls for the government to the education system not only focus on
"rote-learning", but it's more stimulating creative and critical thinking in a field.
For example, hold a contest to create a robot from recyclable materials, competition solar
energy in order to move something and so on.
With this, students can expand their talents that have long been dormant
(Web.worldbank.org, 2014).

Held a campaign to lower the unemployment rate and increase employee productivity.

The campaign is held to help young people who are highly educated but unemployed
because a field of study that they learn is not related to the Malaysian industry.
Not only that with the advent of the campaign, more women will have careers.
This is way to see how women work in industry because women are the source of largely
untapped skills in Malaysia.

The government and companies should meet to discuss how and what new areas should be
created so that the job market in Malaysia do not have any problems.

Not only that, the government should investigate each company so that the rate
percentage of foreign workers does not exceed the local workers.
This is because; if the percentage of foreign workers growing then the unemployment
will been rising in Malaysian and the job market will also face a host of problems.

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Conclusion
A labour market is the place where workers and employees interact with each other. In the labour
market, employers compete to hire the best, and the workers compete for the best satisfying
job.A labour market in an economy functions with demand and supply of labour. The supply and
demand of labour in the market is influenced by changes in the bargaining power.Malaysia is
expected to have many populations of people and the total number of the population is increasing
every year. The demand of the market labor also to be expected will increase.

So, In conclusion, we must create awareness for student in order to study hard and be the best
among the rest. We also need to create more successful young entrepreneur in our country so that
the employment rate will be lower and increase our national economy.

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Apendix

Figure 6: MALAYSIA GDP TABLE FROM 2004 TO 2013 (TRADING ECONOMICS, 2014)

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 Name Atiqah Syahirah Amira Syahmi
Task TP032028 TP032289 TP032226

Abstract

Introduction

Acknowledgement

Body Analysis

Characteristics

Specific Category

Problem

Recommendation

Conclusion

SIGNATURE:

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