Malaysia’s job losses rise as economy grows but wages stay flat
PERKESO says 3.0% unemployment in May is first rise in six months.
Source: says.com · July 22, 2026 at 10:02 PM · AI-assisted report
Single-source
KUALA LUMPUR, 23 JULY 2026 —
PERKESO says 3.0% unemployment in May is first rise in six months.
Market Impact
The Social Security Organisation (PERKESO) cited four structural reasons for the gap between headline growth and worker pay. Half of Malaysia’s 11.5 million workforce earn below RM2,999 a month while only 22% earn RM5,000 or more, it said.
“Economic growth has not translated into meaningful wage growth,” PERKESO said in its Labour Market Exchange report released on Tuesday. The jobless rate climbed to 3.0% in May from 2.9% in March, the first increase since November 2023.
The organisation blamed a heavy concentration of workers in low- and mid-skilled roles where thin margins cap pay rises. Productivity gains remain elusive, it added.
Malaysia’s push into high-value sectors such as technology and green energy has not yet broadened employment enough to lift pay across the board. High-value industries account for a small slice of total jobs, leaving many workers outside higher-wage segments.
Small and medium enterprises, which make up 97% of businesses and most jobs, struggle with thin capital, low margins and slow digital uptake. These constraints limit investment in automation and wage increases.
PERKESO said digital adoption lags behind regional peers. Without productivity-led growth—where companies adopt technology and workers upgrade skills—salaries are unlikely to rise.
The agency urged stronger support to help SMEs modernise and move up the value chain. Under the 13th Malaysia Plan, the shift from job creation to productivity-driven pay growth is now the priority.
The latest PERKESO data for July shows Kuala Lumpur and Selangor accounted for nearly 60% of countrywide job losses.
Related: PERKESO