KUALA LUMPUR (Feb 20): Malaysia’s ongoing high youth unemployment rate of 10% is mainly due to mismatch of skilled talent produced by local training institutions and the actual skills in demand by the market, said Economy Minister Mohd Rafizi Ramli.

“The statement that increases in the minimum wage have hampered demand for the labour force among the youth is not accurate,” he told the Dewan Rakyat on Monday (Feb 20).

Citing labour force statistics from the Department of Statistics Malaysia, Rafizi said there was an increase in terms of the number of vacancies from the third quarter to the fourth quarter last year.

Although there are job offerings in the manufacturing sector, Rafizi said these vacancies are not attractive to the youth, who are more interested in positions that require digital skills.

“We have a huge [skills] gap between the jobs in demand and the talent quality produced by our system,” he explained to Muhammad Ismi Mat Taib (PAS-Parit), who asked about steps to address low demand for the youth in the labour market due to increases in the minimum wage.

Citing the government’s technical and vocational education and training (TVET) as an example, Rafizi said most talent produced by institutions under this programme learned more about knowledge needed in the 1990s and 2000s.

“These skills are [about] machines. The situation is not the same today. Most of these sectors are moving towards automation, so the machines and skills needed are different,” he said.

Hence, Rafizi said the government intends to open up TVET for it to be managed by the private sector, in its bid to narrow the huge skills gap between talent and the job market.

Rafizi said one such initiative is the Academy in Factory (AiF), whereby the government hopes to train 100,000 young talent this year to alleviate the issue of unemployment among this labour group.

The AiF, a collaboration programme between the government, industry and academic institutions, allows talent to work while studying in companies that have been registered under the programme. 

According to the AiF's website, participants will undergo an 18-month training that includes modules about the operations of the companies involved.

For more Parliament stories, click here.