Manufacturing jobs slowly giving way to services employment

Manufacturing jobs slowly giving way to services employment

03 Nov 2020

While Malaysia’s economic structure has evolved over the years, concentration of economic activities continues to differ among states, according to Khazanah Research Institute’s (KRI) findings.

Its latest publication,”Work in an Evolving Malaysia: The State of Households 2020 Part II”, revealed that the agriculture employment share of total employment had declined from 31.2 per cent in 1982 to 10.2 per cent in 2019, but the sector remains an important source of employment in the north and east coast states of the peninsula as well as in Sabah and Sarawak.

The agriculture employment share of total employment in Sabah is at 26 per cent and 20.8 per cent in Pahang in 2019 — higher than the national average.

The manufacturing employment’s share of total employment expanded in all states in the early 1990s, surging to 23.5 per cent of total employment in 2000.

However, its share receded to 17.8 per cent in 2019 as all states gradually moved into the services sector, although states like Penang and Johor had higher manufacturing employment shares than the rest at 37.1 per cent and 25 per cent, respectively, in 2019.

KRI researcher, Siti Aiysyah Tumin said this scenario may be due to the nature of economic activities in some states and the tendency to leverage higher manufacturing employment to add value.

“So, in terms of employment in modern services, for example, or in high-technology manufacturing, it tends to concentrate in the more advanced states.

“When these sub-sectors grow, they hire a more skilled workforce, ” she said during a virtual media briefing session on the findings on Tuesday.

The services sector employment share stood at 62.9 per cent from total employment in 2019.

Meanwhile, between 2009 and 2019, traditional services, such as wholesale and retail, food and beverage and accommodation, rose from 34.8 per cent of total employment to 40.3 per cent.

Employment in modern services such as finance, information and communication, and professional services contracted 1.2 percentage points during the same period, from 8.0 per cent of total employment to 6.8 per cent.

The modern services, which typically records higher than average pay compared to most other sectors, are more common in the central region — Kuala Lumpur, Selangor and Putrajaya — with an average employment share of around 15 per cent of total employment.

In contrast, services employment in other states expanded more in traditional services.

While the shift to services provide job opportunities for many, employment in traditional services generally delivers lower pay and is more likely to offer irregular and non-standard employment compared with modern services.

In addition, employment in social services such as education and public administration contracted by 1.4 percentage points across Malaysia, from 17.2 per cent of total employment in 2009 to 15.8 per cent in 2019.

According to the report, the contraction is a cause for concern as these services are not only essential for the well-being of the rakyat, but also are more likely to employ skilled workers, provide stable jobs and better pay.

It also revealed that vulnerable employment — own-account workers and unpaid family workers — is on the rise.

In the central region, close to 80 per cent of workers have paid-employment jobs with stable employer-employee relations, but vulnerable employment have been rising in recent years, indicating the potential rise of decent work deficits among them.

Source: Bernama Posted on : 03 November 2020