Without careful preparation, setting a minimum salary for technical and vocational education and training (TVET) graduates might result in a large number of jobless people, an economist has said.

Geoffrey Williams, an economics professor from Malaysia University of Science and Technology, stated that a more thorough description of the concept is required to prevent market forces from interfering and denying TVET graduates employment chances.

Williams noted that in the absence of a strategy, companies may respond by recruiting non-graduates. Because salaries are paid by private enterprises, it is unclear how the government will determine a minimum wage of RM2,500. Companies could prefer non-grads if they must pay TVET graduates greater compensation, which would be counterproductive, according to a report by FMT.

The government has a proposal to raise the pay for TVET graduates to between RM2,500 and RM3,000, according to Prime Minister Anwar Ibrahim. He claimed that the present starting pay for TVET graduates, which ranges from RM1,800 to RM2,000, was insufficient to compensate them for their skill set.

The government’s plan has the support of the Malaysian Employers Federation (MEF), which asserts that a compensation structure should be implemented to compensate TVET graduates in accordance with their technical proficiency.

After finishing their SPM education, TVET students go through up to five levels of skill training, according to information found on the website of the education ministry. After completing levels three and five, they get technical certificates (known as Sijil Kemahiran Malaysia) and diplomas (known as Diploma Kemahiran Malaysia or Diploma Vokasional Malaysia).

According to a study conducted by MEF last year on salaries given to executive and non-executive staff, diploma graduates make a minimum of RM1,936 while degree holders make roughly RM2,805 per month.