Ill-planned increase in TVET wages may backfire, warns economist

 

Economics professor Geoffrey Williams warns that private companies are likely to resist attempts to increase the wages of TVET graduates. (Bernama pic)

PETALING JAYA: Setting a minimum wage for technical and vocational education and training (TVET) graduates without proper planning may see many unemployed, an economist warned.

Malaysia University of Science and Technology economics professor Geoffrey Williams said a more detailed explanation of the plan is necessary to avoid market forces interfering to take away employment opportunities from TVET graduates.

Williams warned that without a plan in place, employers may react by hiring non-graduates instead.

“It is unclear how the government will set a minimum salary of RM2,500 because salaries are paid by private companies.

Geoffrey Williams.

“If companies have to pay higher salaries to TVET graduates, they may simply choose non-graduates, which defeats the purpose,” he told FMT.

Last week, New Straits Times reported the announcement by Prime Minister Anwar Ibrahim of a plan by his government to increase wages for TVET graduates to between RM2,500 and RM3,000.

Anwar said the current starting salary of between RM1,800 and RM2,000 paid to TVET graduates was inadequate compensation for their skillset.

The Malaysian Employers Federation (MEF) voiced its support for the government’s proposal, saying a pay structure should be put in place to reward TVET graduates according to their technical competency.

“For each level of competence gained, the graduate could earn a higher salary,” MEF president Syed Hussain Syed Husman told FMT.

Ads by Kiosked

He said the implementation of a scale would motivate TVET graduates to continuously upskill themselves.

TVET students undergo up to five levels of skills training after completing their SPM education, according to information available on the education ministry’s website.

They secure technical certificates (known as Sijil Kemahiran Malaysia) after completing level three, and diplomas (Diploma Kemahiran Malaysia or Diploma Vokasional Malaysia) after level five.

MEF said a survey on salaries paid to executive and non-executive workers last year revealed that diploma holders earn a minimum of RM1,936, while degree holders earn about RM2,805.

Based on the findings, Syed Hussain said, the proposed salary range by the government was justified and would encourage higher enrolment for these courses. - FMT