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The Case For A Fair Work Act, Part 2

Rapid digital transformation has changed the power relationship between employers* and workers, creating new employment categories in its wake and eroding the relevance of current labour laws. Building on the Oxford Internet Institute’s Fair Work Initiative as well as global research efforts to classify today’s workers, Part 1 of our research series argued for updating Malaysia’s employment categories in order to reflect today’s inherent power relationships, and to outline what is owed to workers of each category.

*Note: The term ‘employer’ is used broadly throughout this piece, representing the party that either employs the worker or is the intermediary for the supply of jobs.

In this Part 2 of the research series, we focus on a major pillar of Fair Work as per the Oxford Internet Institute, namely fair pay. What does fair pay mean in the context of a law describing Fair Work in Malaysia? And how would it apply to the different power relationships between employers and workers that we see today?


Economic fairness vs. moral fairness?

In 1965, shortly before the United States government adopted the first federal definition of the poverty line, one of its policy drafters Mollie Orshansky wrote: “There is not, and indeed in a rapidly changing pluralistic society there cannot be, one standard universally accepted and uniformly applicable by which it can be decided who is poor. … If it is not possible to state unequivocally ‘how much is enough,’ it should be possible to assert with confidence how much, on an average, is too little.”

The term ‘fair pay’ usually suggests an equitable level of compensation for a specific job. Going by this framing, the basis of fair pay becomes founded on the idea of that job’s value contribution to a good or service. This primarily economic idea of fairness leads to policies emphasising the linkage of wages to productivity, which assumes that low wages can be increased or avoided if the job’s productivity is calculated and if the job is made more value-adding. 

While the concept of productivity-linked wages appears principled, in reality, it is tested by the challenge of measurement. An assembly line worker’s output can be measured by units assembled per hour but how much is the productivity and value contribution of a cleaner and what is the commensurate level of compensation for that job? What about for a security guard?

The question of fair pay by occupation, sector, paper qualification or productivity calculation has its place in policy discussions and in union negotiations, but we argue that it is not the core problem in question for this piece. 

Instead, the idea of fair pay in the context of fair work legislation is primarily one of moral judgement. Going back to Mollie Orshansky above, it is about asserting with confidence how much is too little, i.e. how much is a societally acceptable level of compensation for working a customary number of hours a month, regardless of the job performed? How much is the amount, where coming below the said figure would be considered humanly exploitative and warranting of legal penalties? Going by this framing of the issue, the basis of fair pay becomes founded on the idea of a minimum living wage and non-wage benefits – i.e. how much is the minimum needed to live on.

As will be argued, the gap between this idea and what is currently practised underpins the need for a revised conception and administration of fair pay in Malaysia.


Of formulas and consultations

Historically, governments have established a minimum income floor by enacting minimum wage laws. Along with the statutory wage laws, each country has a regulatory infrastructure or process by which to revise the minimum wage periodically. Figure 1 below shows a brief cross-country comparison of minimum wage regimes.

Figure 1: Selected Cross-Country Comparison of Minimum Wage Regime

Sources:
Malaysia – Minimum Wages Order 2020; National Wages Consultative Act 2011
China – Employment Law Overview China 2019 – 2020 by L&E Global
United Kingdom – UK’s National Minimum Wage Act 1998
Australia – Australia’s Fair Work Act 2009

As stated in Figure 1, countries’ minimum wage regimes differ in several key respects such as coverage. The minimum wage may not cover all workers and can exclude or be silent on coverage for informal or self-employed workers. Many governments set minimum wages federally or nationally, though countries like China favour local government setting of minimum wages. In many countries, final authority to decide on the minimum wage resides within the responsible ministry or government department, whereas some like Australia have established a commission by law to set the minimum wage. Revisions to the minimum wage level appear based on a combination of formula, research and stakeholder consultation, though the level of transparency on each of these varies from country to country.

In Malaysia, the advent of the minimum wage is a fairly recent phenomenon – the first minimum wage was enforced in 2012. Before that, wage levels were regulated by the Industrial Relations Act 1967 and the Wages Councils Act 1947, where wage rates were determined through collective bargaining for unionised workers and work councils for non-unionised workers.

When a key 2009 study found that over one-third of private sector workers earned less than the national poverty line, the government resolved to set up the National Wages Consultative Council (NWCC) via the National Wages Consultative Council Act 2011 to develop and advise on the national minimum wage. One year after the founding of NWCC, the government implemented the first minimum wage via the Minimum Wages Order 2012 with the announced aim of helping to eradicate poverty and ensure workers can meet the rising costs of living.

The National Wages Consultative Council (NWCC) is a tripartite working group set up to study all matters concerning minimum wages and to give recommendations to the government for making or revising the Minimum Wages Orders according to the sector, type of employment and regional area.

According to the NWCC Act 2011, the council shall consist of the following members who shall be appointed by the Minister of Human Resources:

1. A Chairman
2. A Deputy Chairman
3. A Secretary
4. At least 5 public officers from the Ministry of Finance, the Public Service Department, the Ministry of International Trade and Industry and the Economic Planning Unit
5. At least 5 members representing employees
6. At least 5 members representing employers
7. At least 5 members representing independent members

Source: International Labour Organisation (2018)

The first minimum wage level was set at RM900 a month for West Malaysia and RM800 a month for East Malaysia. Any employer who fails to comply with the minimum wage law can be punished by paying the worker the sum owed as well as a potential fine of not more than RM500 per offence. Editor’s note: A low amount on the surface, in comparison to other fines in Malaysia’s statutes.

Since 2012, the government has increased the minimum wage level to RM1,200 a month for 56 cities and municipal council areas and RM1,100 a month for other areas. Despite these revisions, experts and worker unions still think the current amount is too low to live on adequately. In partial response, the former Human Resources Minister had said in 2019 that the government was considering a sectoral-based minimum wage, which is where the question of minimum wage setting still stands today, after the change in government and the onset of the COVID-19 pandemic in early 2020.

Non-wage financial benefits* in Malaysia are covered by social security acts mandating employers to protect their employees against future financial risks, the key ones being employer monetary contributions to employees’ retirement savings and unemployment insurance. Today, the Employee Provident Fund (EPF) Act 1991 requires all employers to contribute 11-12% of their employees’ base salaries for retirement savings while the Employment Insurance System (EIS) Act 2017 requires employers to contribute a set amount into a national unemployment insurance program for full-time employees. Although informal workers are not eligible for any employer contributions for EPF or EIS, they are allowed to contribute into the self-employed versions of these schemes voluntarily, and on their own initiative.

*Note: Social protection schemes relating to workplace safety and accidents like SOCSO, and reskilling like HRDF, will be discussed in our next article on ‘fair conditions’.

To date, there is no law in Malaysia mandating employers to contribute to workers’ healthcare insurance; provision of private healthcare insurance by companies is mostly due to market norms. To a large extent, the mandating of healthcare insurance by law is driven by the characteristics of a country’s healthcare system. Countries such as Singapore, Thailand and China mandate eligible employers to contribute into a national healthcare insurance scheme for every eligible worker (much like our EPF scheme) while countries like the USA mandate eligible employers to provide company-sponsored health insurance or subsidise their employees’ private health insurance premiums.


What are the current gaps?

Although Malaysia has a legal framework to govern workers’ wages and benefits, there are key gaps in definition and administration that put us some way from achieving the notion of ‘fair pay’. Given the significant role of the minimum wage laws in achieving ‘fair pay’ in Malaysia, this piece focuses on the limitations of the current wage framework and reserves discussion on non-wage compensation such as retirement contributions in future related pieces.


Vague rationale for minimum wage

Currently, Malaysia’s minimum wage levels are determined through a combination of formula application and stakeholder consultation. The NWCC’s website states that the setting of the minimum wage rates are based on factors affecting workers’ ability to make ends meet, such as the national poverty line, the median income, productivity growth, inflation and the unemployment rate. A technical committee under the NWCC conducts calculations, industry sensitivity tests and consultations with stakeholders, after which proposed options for the minimum wage are debated amongst members of the NWCC. The agreed upon minimum wage range is then proposed to the Minister of Human Resources and the Cabinet for the government’s decision. 

It is unclear whether the core basis of the minimum wage is driven by the question of the minimum needed to live in today’s society, or by the question of what industry can or is prepared to bear. The NWCC website states two potentially competing aims of ensuring employees are able to meet basic needs as well as providing a conducive environment for industrial production. 

The current formula suggests that Malaysia’s minimum wage setting takes into consideration the national poverty line, median income, inflation rate, unemployment rate and productivity growth. However, as mentioned above, experts and worker unions still think the current minimum wage is too low to live on adequately. The significant difference between the current minimum wage (RM1,200 for Kuala Lumpur & major cities) and estimates for the real living wage (BNM’s RM2,700 for Kuala Lumpur & major cities and SWRC’s reference budget of RM1,870 for an unmarried public transport user in Klang Valley) implies that either the formula needs improvement or that employer readiness plays a more significant role in deciding Malaysia’s national income floor.

Read our past primer on minimum wage vs. living wage.


Opaque review and decision-making process

While there are broad guidelines under the current framework, there is a lack of transparency in how the review of the minimum wage level is conducted and what factors drive decision-making. The recommendations of the NWCC, including its supporting calculations and information sources are not published for public comment or information. The deliberations on these recommendations and the rationale for the government’s final decision are also not published.


Increasingly outdated policy paradigm

As outlined in Part 1, the emerging trend of labour informalisation makes policy frameworks that revolve around formal full-time employment increasingly obsolete, including minimum wage laws. Even if the official minimum wage were to be sufficient to cover local costs of living, its enforcement would still be limited to full-time or part-time formal employees only – a declining employment category in an era of digitalisation and contract or ‘gig’ employment. To ensure that all workers who work a stipulated number of full-time or part-time hours receive the fair minimum pay, new employment categories would need to be established (such as dependent contractors) and would need to be thoughtfully integrated into current minimum wage laws.

Finally, the acute hardships caused by the COVID-19 pandemic on low-waged income earners have shown how policy frameworks that focus on employer affordability are increasingly insufficient and siloed. Minimum wage policy needs to be compatible and consistent with a national policy on social safety nets. In this past year of COVID-19 we have seen the government implement both ad hoc measures such as wage subsidies as well as more established Bantuan Sara Hidup household cash transfers (or its pandemic-times name, Bantuan Prihatin Rakyat) to supplement low or interrupted incomes. This same approach should be a cornerstone of a long-term social safety net policy post-COVID, where minimum wages and non-wage financial contributions by employers plays the role it is intended to accomplish, in tandem with wage support, household income support and reskilling schemes by the government.


A clear, viable policy for fair pay

To reiterate, the core policy question on fair pay in the context of this piece is about determining the minimum amount owed to a worker for a specified (and conventional) number of hours worked. To close the gaps in doing so, we propose the following:


A societally acceptable level for the minimum wage

What is the purpose of a national minimum wage? If it is to ensure that workers can meet a minimum reasonable cost of living – which we argue is the foremost purpose – the minimum wage should be researched, calculated and set at the level of a minimum living wage for the locality. 

There will surely be debates around what is a societally acceptable definition of a minimum living wage and minimum living conditions but at the very least, Malaysians would be clear that the minimum wage, in principle and in law, is set at a level that does not come below the poverty threshold or other benchmarks of misery or exploitation. Future revisions of the minimum wage would be mostly reflective of changes in the consumption basket, inflation, and the level of local economic development.


A transparent review and decision-making process

Setting the minimum wage, even to the level of a living wage, will likely continue to be a negotiation between application of a formula as well as appeals from stakeholders. While we aspire to the level of independence in Australia’s minimum wage set-up, particularly in the autonomy of the Fair Work Commission, as a medium-term measure we advocate emulating the transparency of that same commission.

The details of the annual minimum wage review process and data sources should be made public including the formula or calculation for the minimum wage, any research papers commissioned to amend or update the formula, counter-proposals from stakeholders, proceedings from stakeholder engagement sessions, to name a few. Instead of closed-door discussions, we strongly advocate for these key information to be published and for the government to explain discrepancies between NWCC’s minimum wage proposals and the government’s final decision on the minimum wage. These pieces of information can then be constructively debated in Parliament by elected representatives (when Parliament reconvenes).


An updated policy paradigm of wages and social safety nets

With new forms of employment mushrooming in the fast-changing labour market, the eligibility criteria for earning a fair minimum wage and benefits should not only be limited to those in formal employment. As argued above, the minimum wage should apply to all worker categories, unless there are sectoral or practical obstacles barring its implementation (in which cases wage or income support kicks in).

In Part 1, we argued for the establishment of 3 major employment categories to reflect 3 major underlying power relationships: employees, dependent contractors and independent contractors. As per current laws, all formal employees who contribute full-time hours should earn a minimum living wage and have non-wage financial benefits such as employer contributions to EPF and EIS. 

For dependent contractors, we propose that those who work the equivalent of full-time hours should also earn incomes not less than the minimum living wage. Independent contractors meanwhile have the highest degree of job autonomy and control; workers in this category should have sufficient means and capacity to negotiate for rates and fees above the minimum living wage but for additional information and know-how support, should also be supported by collectives supporting independent contractors and solopreneurs.

Some countries have created a tiered minimum wage system to account for younger workers, apprenticeships, hours worked and other material circumstances.

In the United Kingdom, workers younger than 23 years old and workers in apprenticeship have separate minimum wage levels. Australia adopts a different approach by offering special provisions known as modern awards in addition to the statutory wage law to set sectoral/occupation-based minimum wage and employment conditions. To accommodate flexible working hours, some state governments in the United States have enabled those working full-time hours or more in a week to earn a premium payment on top of their minimum wage.


Anticipated Issues

At the time of writing, the debate* about raising the minimum wage to the living wage level is increasing across the world in the United States, Indonesia, and more. In Malaysia, the COVID-19 pandemic has highlighted the struggles of many low-income Malaysians to make ends meet, exposing the inadequacy of our current minimum wage, both in amount and in coverage. While the government promises a review of the minimum wage, we argue that its definition, administration and policy paradigm needs to undergo a significant change.

*Note: Debate amongst economists on the effects of raising the minimum wage have come a long way from mostly negative to mixed, based on empirical evidence showing little impact to employment upon modest increases (paywall).

Implementing a local living wage as the minimum wage in one stroke will very likely not be possible or even advisable. The difference between the current minimum wage and the revised poverty line (not to mention various proposals of local living wage figures) is very large, and there will be serious and legitimate concerns regarding companies’ ability to pay, especially SMEs. Raising the minimum wage has to be done in stages. To further support the transition to a minimum living wage regime, the government may also institute sectoral exemptions to reflect the cost of living in specific working environments such as oil palm plantations, as well as targeted, temporary wage subsidies for qualifying companies with clear criteria.

Extending minimum wage coverage to all workers will also not be straightforward. One challenge is in determining numbers of hours worked for certain types of dependent contractors, for example gig platform workers. Should hours spent on the platform app be equated to hours worked or would this result in ‘gaming the system’? There is as yet no answer to this question, and many other practical nuts-and-bolts questions of implementation. But if ensuring fair pay for all workers, including informal workers, is something we consider not only societally acceptable but also societally important, we should ensure that the principle is agreed upon, and that time and effort are invested towards resolving the practical issues.

Beyond earning a living wage, what other factors constitute Fair Work? We take up fair working conditions and fair contracts in the next instalment of this research series.

Email us your views or suggestions at editorial@centre.my

A Year of Living Under COVID-19

In February this year, we began a study to assess the effects of the then year-long pandemic on Malaysians’ mental health. At the time, a second nation-wide lockdown had just been declared. Data for this mental health study was collected via online survey which reached nearly 1,000 respondents from across the country*.

*Respondents’ mental health was measured by their responses to the DASS-21 questionnaire. For more details on how the DASS-21 questionnaire was applied, respondent demographics and the study’s overall methodology, please refer to Part 1. Please note that this is not a nationally representative stratified sample.

A descriptive analysis of the data was published in three parts, each tackling a different aspect of the general deterioration experienced over the past year. Part 1 showed that over half of surveyed respondents experienced worsened mental health over the past year. Women and youths self-reported lower mental health levels compared to other demographic groups. There was also a clear relationship between physical and mental well-being; those who reported worsened physical health over the past year also experienced worsened mental health.

Part 2 explored the impact of living arrangements and social connection on mental well-being. Social isolation appeared to be a factor; respondents who live alone self-reported worse mental well-being compared to those who live with others. Additionally, respondents who work from home every day also appeared to have worse mental health levels compared to those who worked from home less often.

Part 3 looked at the impact of changes to employment and income on mental well-being. The unemployed appeared most vulnerable mental health-wise, and similarly for part-time employees. Respondents earning less than RM 5,000 also appeared to experience worse mental well-being relative to other income groups.

In this fourth and final instalment of the research series, we sought to understand which of the variables included in our study were the most statistically significant in driving high scores in depression, anxiety and stress levels. We conducted a multiple variable analysis on the data set, using multiple linear regression.

Regression analysis is a statistical method used to determine the strength of the relationship between a dependent variable (in this study, self-reported mental health scores) and one or more independent or predictor variables (for example, age, gender etc.) in a regression model. Multiple regression analysis allows us to determine the relative contribution of each of the predictor variables to the model, in order to identify the most significant predictors.

Results of the Multiple Variable Analysis

The multiple variable analysis on our data set found age and gender as highly significant predictors of depression, anxiety and stress while marital status is a highly significant predictor of depression and anxiety (Table 1). Other significant predictors are change in income and level of household income. Comparatively, other variables such as living alone (i.e. household occupancy) and working from home frequency were not as significant as suggested by the descriptive analysis.

Table 1: Predictors of mental well-being

With respect to age, there is a very significant likelihood that people aged 35 years and younger are experiencing worse mental health in terms of depression, anxiety and stress levels compared to older age groups. Uncertainty over future prospects, financial distress, social isolation and lack of quality sleep have been attributed as the likely causes by a global cross-sectional COVID-19 and well-being study published this year.

As for gender, there is a very significant likelihood that women have worse depression, anxiety and stress levels compared to men. A study published last year exploring the impact of the pandemic on women shows that gender-related challenges such as parenting challenges, uneven distribution of domestic care and the increased risk of domestic violence are some of the key contributors to women’s mental health difficulties.

Marital status is a very significant predictor of negative mental health as well; there is a very significant likelihood that people who are single during the pandemic have worse depression and anxiety levels compared to those who are married. A relationship quality and COVID-19 study published last year showed that single individuals had poorer mental health compared to those who were in relationships of good quality. This is supported by a social relationships and health study that showed how social support systems and a sense of meaning found in relationships led to better mental health and health behaviours overall.

Change in income is a significant predictor for depression, anxiety and stress. Based on our data set, there is a significant likelihood that a fall in income over the past year is accompanied by higher levels of depression, anxiety and stress compared to an increase or no change in income levels.

The absolute level of household income is a significant predictor for anxiety; there is a significant likelihood that individuals with household incomes less than RM5,000 experience higher anxiety levels compared to those with higher household incomes.

In Part 2, we discussed the impact of social isolation on self-reported mental health scores, particularly in those living alone and those who work from home (WFH) daily. Although the descriptive analysis showed a somewhat clear pattern in negative mental health scores, the variables of household occupancy and WFH frequency were only weakly significant as predictors of negative mental health.

Employment status (e.g. whether full-time, part-time or unemployed), number of financial dependents and availability of personal space were not included in the regression model as these variables were highly correlated with some of the above-mentioned variables and were very weakly significant in explaining the patterns observed in negative mental health scores.

Conclusion

At the time of this writing, a full national lockdown had just been declared as it became clear that the third Movement Control Order then underway was not enough to bring down the rate of virus transmission. With case numbers breaching 9,000 a day, it is hard to visualise better days. But if we look to the history of past global pandemics and if the necessary precautions are taken, we can reasonably hope that the current worrying situation will gradually abate over the next one to two years.

However, we remain concerned about the long-term implications of the pandemic, beyond the immediate crisis. COVID-19 and successive lockdowns have amplified and exacerbated problems latent in Malaysian society, including widespread mental health challenges. 

Our study found that young people, women, unmarried Malaysians and those with reduced incomes are the ones most likely to have negative mental health after the year-long pandemic (and counting). These findings are generally consistent with other mental well-being studies, both local and worldwide.

These are groups that require particular mental health outreach and support, now and after the pandemic, alongside the various measures of economic support that have been announced. It is crucial that these groups are intentionally targeted for mental health support services by the government and civil society.

In addition, it is also necessary to have institutional reform. We have to rethink how existing ministries and agencies are involved in mental health support. Although the Ministry of Health leads public mental health, mental health support and services are fragmented across different ministries, such as the Ministry of Women, Family and Community Development and the Ministry of Education. There is a need to rebalance assistance budgets in relevant ministries to ensure greater recognition for and a higher level of support for mental health modules within various existing socioeconomic assistance and relief programmes.

There is also an argument for decentralising service provision and resources, and empowering regional and local authorities to address healthcare issues based on detailed local knowledge and contexts, particularly amongst vulnerable populations.

The fallout of the COVID-19 pandemic will be felt for many years, or even decades, to come. We need to address these very real social challenges now, if we are serious about helping Malaysians navigate their way safely into the post-pandemic future.

Academics and researchers interested in the data and further details of this research project may contact the principal researcher at aziff@centre.my.

A Year of Living Under COVID-19

In February this year, we began a study to assess the effects of the then year-long pandemic on Malaysians’ mental health. At the time, a second nation-wide lockdown had just been declared. Data for this mental health study was collected via online survey which reached nearly 1,000 respondents from across the country*.

*Respondents’ mental health was measured by their responses to the DASS-21 questionnaire. For more details on how the DASS-21 questionnaire was applied, respondent demographics and the study’s overall methodology, please refer to Part 1. Please note that this is not a nationally representative stratified sample.

A descriptive analysis of the data was published in three parts, each tackling a different aspect of the general deterioration experienced over the past year. Part 1 showed that over half of surveyed respondents experienced worsened mental health over the past year. Women and youths self-reported lower mental health levels compared to other demographic groups. There was also a clear relationship between physical and mental well-being; those who reported worsened physical health over the past year also experienced worsened mental health.

Part 2 explored the impact of living arrangements and social connection on mental well-being. Social isolation appeared to be a factor; respondents who live alone self-reported worse mental well-being compared to those who live with others. Additionally, respondents who work from home every day also appeared to have worse mental health levels compared to those who worked from home less often.

Part 3 looked at the impact of changes to employment and income on mental well-being. The unemployed appeared most vulnerable mental health-wise, and similarly for part-time employees. Respondents earning less than RM 5,000 also appeared to experience worse mental well-being relative to other income groups.

In this fourth and final instalment of the research series, we sought to understand which of the variables included in our study were the most statistically significant in driving high scores in depression, anxiety and stress levels. We conducted a multiple variable analysis on the data set, using multiple linear regression.

Regression analysis is a statistical method used to determine the strength of the relationship between a dependent variable (in this study, self-reported mental health scores) and one or more independent or predictor variables (for example, age, gender etc.) in a regression model. Multiple regression analysis allows us to determine the relative contribution of each of the predictor variables to the model, in order to identify the most significant predictors.

Results of the Multiple Variable Analysis

The multiple variable analysis on our data set found age and gender as highly significant predictors of depression, anxiety and stress while marital status is a highly significant predictor of depression and anxiety (Table 1). Other significant predictors are change in income and level of household income. Comparatively, other variables such as living alone (i.e. household occupancy) and working from home frequency were not as significant as suggested by the descriptive analysis.

Table 1: Predictors of mental well-being

With respect to age, there is a very significant likelihood that people aged 35 years and younger are experiencing worse mental health in terms of depression, anxiety and stress levels compared to older age groups. Uncertainty over future prospects, financial distress, social isolation and lack of quality sleep have been attributed as the likely causes by a global cross-sectional COVID-19 and well-being study published this year.

As for gender, there is a very significant likelihood that women have worse depression, anxiety and stress levels compared to men. A study published last year exploring the impact of the pandemic on women shows that gender-related challenges such as parenting challenges, uneven distribution of domestic care and the increased risk of domestic violence are some of the key contributors to women’s mental health difficulties.

Marital status is a very significant predictor of negative mental health as well; there is a very significant likelihood that people who are single during the pandemic have worse depression and anxiety levels compared to those who are married. A relationship quality and COVID-19 study published last year showed that single individuals had poorer mental health compared to those who were in relationships of good quality. This is supported by a social relationships and health study that showed how social support systems and a sense of meaning found in relationships led to better mental health and health behaviours overall.

Change in income is a significant predictor for depression, anxiety and stress. Based on our data set, there is a significant likelihood that a fall in income over the past year is accompanied by higher levels of depression, anxiety and stress compared to an increase or no change in income levels.

The absolute level of household income is a significant predictor for anxiety; there is a significant likelihood that individuals with household incomes less than RM5,000 experience higher anxiety levels compared to those with higher household incomes.

In Part 2, we discussed the impact of social isolation on self-reported mental health scores, particularly in those living alone and those who work from home (WFH) daily. Although the descriptive analysis showed a somewhat clear pattern in negative mental health scores, the variables of household occupancy and WFH frequency were only weakly significant as predictors of negative mental health.

Employment status (e.g. whether full-time, part-time or unemployed), number of financial dependents and availability of personal space were not included in the regression model as these variables were highly correlated with some of the above-mentioned variables and were very weakly significant in explaining the patterns observed in negative mental health scores.

Conclusion

At the time of this writing, a full national lockdown had just been declared as it became clear that the third Movement Control Order then underway was not enough to bring down the rate of virus transmission. With case numbers breaching 9,000 a day, it is hard to visualise better days. But if we look to the history of past global pandemics and if the necessary precautions are taken, we can reasonably hope that the current worrying situation will gradually abate over the next one to two years.

However, we remain concerned about the long-term implications of the pandemic, beyond the immediate crisis. COVID-19 and successive lockdowns have amplified and exacerbated problems latent in Malaysian society, including widespread mental health challenges. 

Our study found that young people, women, unmarried Malaysians and those with reduced incomes are the ones most likely to have negative mental health after the year-long pandemic (and counting). These findings are generally consistent with other mental well-being studies, both local and worldwide.

These are groups that require particular mental health outreach and support, now and after the pandemic, alongside the various measures of economic support that have been announced. It is crucial that these groups are intentionally targeted for mental health support services by the government and civil society.

In addition, it is also necessary to have institutional reform. We have to rethink how existing ministries and agencies are involved in mental health support. Although the Ministry of Health leads public mental health, mental health support and services are fragmented across different ministries, such as the Ministry of Women, Family and Community Development and the Ministry of Education. There is a need to rebalance assistance budgets in relevant ministries to ensure greater recognition for and a higher level of support for mental health modules within various existing socioeconomic assistance and relief programmes.

There is also an argument for decentralising service provision and resources, and empowering regional and local authorities to address healthcare issues based on detailed local knowledge and contexts, particularly amongst vulnerable populations.

The fallout of the COVID-19 pandemic will be felt for many years, or even decades, to come. We need to address these very real social challenges now, if we are serious about helping Malaysians navigate their way safely into the post-pandemic future.

Academics and researchers interested in the data and further details of this research project may contact the principal researcher at aziff@centre.my.

Adakah Program Latihan Semula Boleh Dicapai Oleh Semua Lapisan Masyarakat?

Program latihan semula, (reskilling),  peningkatan kemahiran (Upskilling) dan silang kemahiran (Cross-skilling) menjadi kata kunci dalam perbincangan dasar sejak kebelakangan ini. Belanjawan 2021 baru-baru ini  telah menekankan kepentingan latihan kemahiran dengan pengumuman peruntukan berjumlah lebih dari RM19 bilion untuk pelbagai program yang  disediakan oleh pelbagai agensi, dari MDEC hingga PUNB.

Peruntukkan ini cukup lumayan, tetapi adakah peruntukan untuk program latihan mencukupi? Kajian terbaru kami mendapati penyediaan kursus dan program latihan perlu dilengkapi dengan langkah-langkah tambahan yang memudahkan orang ramai mengaksesnya. 

Baca laporan penuh kajian kami di sini.

Dalam artikel bergambar di bawah, kami paparkan bagaimana latar belakang dan kedudukan sosio-ekonomi seseorang merupakan salah satu faktor utama yang menentukan sama ada mereka boleh mengakses program-program ini atau tidak.

Kenali Aiman*

*Watak fiksyen Aiman  diilhamkan hasil temuramah dengan pekerja tidak formal tanpa ijazah serta penemuan kajian kami. 

Aiman adalah seorang pekerja kilang di Selangor berusia 28 tahun. Kelulusan tertinggi beliau ialah Sijil Pelajaran Malaysia (SPM) dan pendapatan bulanannya sebanyak RM1,800. Jumlah pendapatan ini tidak mencukupi untuk menanggung keluarga beliau. Isteri Aiman merupakan seorang suri rumah tangga dan menjaga kedua-dua anak mereka, kerana mereka tidak mampu menampung kos penjagaan anak sekiranya dia turut bekerja. 

Untuk memperolehi pendapatan tambahan demi memenuhi keperluan keluarga, Aiman juga bekerja sebagai penghantar makanan di luar waktu kerja di kilang. Beliau biasanya pulang ke rumah larut malam, dan hanya tidur selama beberapa jam sahaja sebelum bangun untuk bekerja di kilang keesokan harinya.

Hasil jualan barangan kilang di mana Aiman bekerja tidak stabil dan terkesan dengan pandemik COVID-19. Akibatnya, syif bekerja Aiman telah dikurangkan. Ini tidaklah mengejutkan Aiman – beliau tahu bahawa kilang tersebut memang telah merancang untuk menggantikan beberapa tugas manual dengan mesin. 

Untuk menggantikan sumber pendapatan yang berkurangan, Aiman mula menumpukan perhatian dan meluangkan masa yang lebih banyak kepada kerja gig. Ini tidak mudah – pekerja gig semakin bertambah kebelakangan ini  (termasuk mereka yang mempunyai ijazah dan berpendidikan tinggi) dan Aiman perlu bersaing dengan mereka serta bekerja lebih lama untuk memperoleh pendapatan yang mencukupi.

Aiman sedar bahawa dia tidak boleh bekerja di kilang dan membuat kerja gig selama-lamanya. Beliau ada membaca tentang program latihan semula tetapi berasa program-program tersebut hanya untuk mereka yang boleh bertutur dalam Bahasa Inggeris, mahir menggunakan komputer dan boleh belajar secara online. Kalaupun ada program yang sesuai untuk dirinya, Aiman tidak tahu bagaimana untuk mencari program-program itu: ada maklumat tentang program dan kursus  tersebut tetapi tiada bimbingan untuk membantu Aiman mencari program yang sesuai dengan kemahiran, kepakaran dan aspirasi beliau. Ahli keluarga dan kawan-kawan Aiman juga tidak dapat membantu.

Aiman inginkan kehidupan yang lebih senang dan sempurna untuk keluarganya tetapi beliau tidak mampu merancang terlalu jauh: memastikan beliau mampu menyara keluarganya dalam masa terdekat lebih penting.  Banyak juga persoalan yang bermain di benak fikiran beliau: sekiranya dia mengambil masa untuk menghadiri kursus sekarang – apakah dijamin beliau akan mendapat pekerjaan yang lebih baik setelah tamat latihan? Adakah beliau mampu membayar yuran program latihan itu? Bagaimana pula dengan keluarganya – siapa akan menyara mereka ketika Aiman berkursus? 

Sehingga soalan-soalan ini terjawab, Aiman akan terus melakukan pekerjaan bergaji rendah seperti sekarang. 

Memahami cabaran-cabaran yang dihadapi

Malaysia mempunyai ekosistem pembangunan kemahiran yang luas dengan pelbagai pilihan program dan peluang bantuan kewangan. Namun, bagi pekerja berlatar belakang seperti Aiman, ‘meluas’ tidak semestinya bermaksud ia mudah dicapai. Terdapat beberapa cabaran yang menghalang beliau mengakses peluang yang ada.


Risiko dan kos melepas yang tinggi

Meluangkan masa untuk menjalani latihan kemahiran bermakna mereka perlu mengurangkan waktu kerja dan sekaligus, menjejaskan pendapatan mereka. Walaupun program-program ini mungkin fleksibel dari segi masa, tetapi pengurangan pendapatan yang sedikit pun akan menjejaskan pekerja bergaji rendah, terutamanya apabila mereka mempunyai simpanan yang sedikit. Juga, tidak semua pekerja tidak formal layak mendapat elaun latihan (huraian lebih lanjut di bawah).

Ketidakpastian tentang jaminan pekerjaan setelah tamat latihan juga merupakan faktor penghalang. Tidak semua program menawarkan penempatan pekerjaan atau mempunyai rekod yang baik dalam membantu perkembangan usahawan mikro. Memang tiada program yang boleh memberi jaminan penempatan pekerjaan atau kejayaan seratus peratus, tetapi risiko yang ditanggung lebih tinggi bagi mereka yang berpendapatan rendah dengan wang simpanan yang terhad.

Salah satu faktor utama untuk untuk membolehkan pekerja mengakses program latihan kemahiran semula adalah gantian pendapatan. 88% responden kajian mahukan elaun latihan untuk menggantikan pendapatan yang hilang semasa program berlangsung. Jaminan penempatan pekerjaan juga penting; 87% responden mengatakan bahawa mempunyai peluang pekerjaan yang dijamin adalah penting atau sangat penting bagi mereka ketika mempertimbangkan untuk mengikuti apa-apa program latihan kemahiran.


Kelayakan terhad untuk pilihan dana

Bukan semua pekerja tidak rasmi layak mengakses dana yang disediakan. Pinjaman Perbadanan Tabung Pembangunan Kemahiran (PTPK) hanya diberikan untuk program sepenuh masa yang diluluskan oleh Jabatan Pembangunan Kemahiran (JPK) di bawah Kementerian Sumber Manusia. Bagi dana HRDF pula, hanya pekerja di bawah syarikat yang berdaftar dengan HRDF dapat mengakses dana ini, tertakluk kepada persetujuan majikan mereka. Subsidi dan elaun latihan kemahiran yang diberikan oleh Pusat EIS hanya disediakan untuk penyumbang EIS. Oleh yang demikian, sebilangan besar pekerja tidak formal tidak akan dapat mengakses sumber dana latihan yang ditawarkan pada ketika ini.

Dalam kajian terkini kami, 58% daripada pekerja tanpa ijazah yang mengambil bahagian dalam latihan peningkatan kemahiran atau latihan kemahiran semula telah membayar kos latihan mereka sendiri, manakala 19% dibiayai oleh agensi kerajaan dan 14% dibiayai oleh majikan mereka.


Ekosistem yang mengelirukan

Sebahagian besar keupayaan untuk mengakses peluang latihan kemahiran semula bergantung kepada kebolehan seseorang itu ‘mengemudi’ maklumat yang ada untuk mendapatkan program yang paling sesuai dengan keperluan dan minat mereka. Pekerja yang mahir digital dan mahir berbahasa Inggeris mempunyai kelebihan dalam hal ini. Mereka yang tidak begitu arif mencari program perlu mengharungi cabaran-cabarannya tersendiri, seperti memahami berbagai laman web, portal pendaftaran yang berbeza dan sebagainya.

Kajian kami mendapati bahawa 78% responden berminat atau sangat berminat untuk meningkatkan kemahiran mereka tetapi hanya 30% yang mengikuti program latihan kemahiran sebelum ini. Lebih daripada separuh responden mengatakan bahawa mereka tidak mengikuti program latihan kemahiran semula kerana mereka tidak tahu di mana atau bagaimana mengakses program tersebut. Melalui temu ramah dengan responden, kami mendapati bahawa golongan bukan siswazah dari keluarga berpendapatan sederhana dan berpendidikan tinggi lebih selesa dan mahir dalam mencari peluang latihan semula secara dalam talian.


Panduan kerjaya dan sokongan modal sosial yang lemah

Kebanyakan pekerja tanpa ijazah tidak pernah mendapatkan khidmat kaunseling atau perkhidmatan bimbingan  dan panduan kerjaya sebelum ini. Ini berbeza dengan mereka yang datang dari keluarga berpendapatan tinggi mahupun graduan. Bagi mereka yang tidak berijazah, modal sosial mereka – seperti ahli keluarga atau rakan sebaya – kurang mampu menghubungkan mereka dengan peluang pekerjaan, latihan atau bimbingan yang baik.

Hanya 30% responden dalam kajian kami terdiri daripada pekerja tanpa ijazah yang pernah menerima kaunseling kerjaya manakala lebih dari dua pertiga mengatakan mereka ingin menerima nasihat dan bimbingan kerjaya professional.


Kekurangan perhatian terhadap keperluan dan minat pelbagai segmen pekerja

Selaras dengan wawasan negara kerah ekonomi digital, khususnya pasca wabak pandemik COVID-19, program latihan semula yang tertumpu kepada kemahiran digital menjadi keutamaan penggubal dasar. Kemahiran digital seperti pemasaran digital dan pengaturcaraan mungkin menarik minat sebahagian dari pekerja tanpa ijazah (juga untuk pemegang ijazah) tetapi ramai dari mereka mungkin menghadapi kesukaran dalam menggunakan kemahiran ini untuk menjana pendapatan. Program latihan ini juga mungkin tidak sesuai dengan mereka yang kekok dengan pembelajaran dalam talian dan kurang mahir berbahasa Inggeris.

Dua pertiga responden kajian mengatakan bahawa mereka ingin menjadi ‘bos mereka sendiri’, sama ada untuk menjadi pekerja bebas atau memulakan perniagaan kecil. 71% responden menyatakan program perantisan adalah pilihan pembelajaran mereka, dengan Bahasa Malaysia sebagai bahasa penghantar pilihan utama mereka.

Kesimpulannya

Jurang ketidaksamarataan antara masyarakat akan menjadi makin teruk dalam era digital. Bagi memastikan mobiliti sosial terjamin untuk setiap lapisan masyarakat, penggubal dasar harus memastikan keputusan yang dibuat menjamin akses kepada peluang latihan semula meliputi semua lapisan masyarakat. 

Mereka perlu cakna dengan kos melepas, kemampuan untuk belajar, minat dan kemahiran bahasa setiap kumpulan demografi yang disasar, supaya program latihan dapat dibentuk  sejajar dengan keperluan mereka yang akan menjalani latihan semula ini, dan dapat dicapai oleh golongan yang paling memerlukannya. Hanya menyediakan program latihan tidak mencukupi: penyediaan maklumat yang teratur dan mudah dicapai, pilihan kursus yang bersesuaian, bantuan kewangan yang lebih jelas dan terbuka serta bimbingan yang mencukupi juga perlu disediakan. 

Baca laporan penuh kajian kami di sini.


Hantarkan padangan atau cadangan anda kepada kami di editorial@centre.my

Generasi Berhutang

Bagaimanakah rakyat Malaysia membiayai pendidikan tinggi mereka? Bagi sebahagian besar generasi muda sekarang, jawapannya adalah melalui pinjaman pendidikan.

Hutang pendidikan merupakan sesuatu kebiasaan dan keunikan dalam kalangan generasi yang belajar di Institusi Pengajian Tinggi (IPT) dalam alaf baru ini. Ianya menjadi suatu kebiasaan disebabkan pengambilan pinjaman pendidikan secara meluas yang dikeluarkan  oleh Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN), badan berkanun yang telah diwujudkan untuk menawarkan pembiayaan pendidikan tinggi dengan kos faedah rendah. Menurut sebuah laporan Agensi Kaunseling dan Pengurusan Kredit (AKPK) pada 2018, hutang pendidikan adalah hutang kedua yang paling biasa diambil dalam kalangan belia berusia 20-29 tahun.

Pada masa yang sama, hutang pendidikan juga unik bagi segenerasi rakyat Malaysia masa kini. Tidak seperti generasi terdahulu, golongan belia masa kini memikul beban hutang yang berat sebelum memasuki alam pekerjaan. Kami menganggarkan bahawa secara purata, pelajar yang mendaftar di universiti awam tempatan atau universiti swasta tempatan hari ini akan mengumpul hutang pendidikan masing-masing sebanyak RM26,600 dan RM56,120 untuk pengajian ijazah yang memakan masa empat tahun.1

Antara sebab yang telah meloncatkan populariti pinjaman pendidikan termasuklah pengembangan rangkuman pembiayaan jenis dan tempoh kursus dan pertambahan kelayakan jumlah institusi pendidikan tinggi swasta. Walau bagaimanapun, peningkatan beban hutang pendidikan juga telah didorong oleh pengurangan pulangan dari pendidikan tinggi. Menurut sebuah laporan terbaru dari Jabatan Perangkaan Malaysia, “graduan baru telah mencatatkan penurunan pendapatan bulanan di mana majoriti daripada mereka memperoleh antara RM1,001 hingga RM1,500 pada tahun 2020 berbanding RM2,001-RM2,500 pada tahun 2019.”

COVID-19 juga sememangnya memainkan peranan utama dalam perkara ini, tetapi sebelum penularan wabak ini, graduan baru telah pun menghadapi prospek pekerjaan yang tidak menentu, pasaran pekerjaan yang tidak sepadan dengan bidang pengajian, dan genangan gaji. Pada masa ini, impian untuk menikmati mobiliti sosial melalui pendidikan tinggi semakin kurang terjamin berbanding beberapa dekad yang lalu bila jumlah graduan dalam pasaran pekerjaan jauh lebih berkurangan.

Hampir dua tahun lalu kami telah menerbitkan primer tentang topik kos pendidikan tinggi di Malaysia yang telah memberikan gambaran umum mengenai yuran pendidikan dan kaedah pembiayaan. Kali ini, kami mengkaji strategi utama dasar nasional Malaysia dalam pembiayaan pendidikan tinggi, iaitu pinjaman pendidikan, untuk menjawab persoalan mengenai kelestarian dan kerelevanan jangka panjang dasar ini. Sebagai permulaan, kami meneliti sejarah pengasasan dasar ini.

1Mengikut jadual pinjaman PTPTN, jumlah tersebut diperolehi dengan mengira jumlah pinjaman penuh untuk kursus ijazah pertama selama empat tahun berdasarkan pengagihan (disbursement) tahunan yang berkelayakan bagi setiap pelajar IPTA / IPTS.

Pendidikan tinggi (dan pinjaman pendidikan) untuk semua

Pada awal tahun 1980-an, dua pertiga pelajar yang mendaftar di universiti awam Malaysia (terdapat hanya 5 universiti awam di Malaysia pada ketika itu) dibiayai oleh biasiswa kerajaan yang dianugerahkan oleh Jabatan Perkhidmatan Awam (JPA) atau oleh badan berkanun yang lain.2 Sebilangan kecil pinjaman pendidikan ditawarkan oleh agensi kerajaan seperti JPA dan Majlis Amanah Rakyat (MARA).3

Peralihan kepada pinjaman pendidikan sebagai kaedah utama untuk membiayai pendidikan tinggi bermula pada tahun 1990-an, didorong oleh tujuan untuk meningkatkan enrolmen di peringkat pendidikan tinggi dengan cepat dan menghasilkan tenaga kerja yang berpendidikan. Dasar ini lahir dari Dasar Persyarikatan Malaysia (atau Malaysia Incorporated) yang dimulakan oleh Perdana Menteri ketika itu, Tun Dr. Mahathir Mohamad. Tujuannya adalah untuk mengurangkan pergantungan pada sumber kerajaan, dan meningkatkan peranan syarikat swasta sambil mempromosikan kemajuan ekonomi Bumiputera.4

Umumnya, dua perubahan yang berkaitan berlaku pada masa itu – pengkorporatan universiti awam5 dan perkembangan institusi pengajian tinggi swasta yang pesat.6 Perubahan ini mewujudkan lebih banyak tempat pengajian di institusi pendidikan tinggi. Akan tetapi, ia juga telah meningkatkan kos pengajian. Hal ini juga telah menjadi isu politik yang hangat, terutamanya berkenaan keupayaan terhad pelajar Bumiputera untuk membayar yuran pengajian yang tinggi.7

Dengan demikian, idea pinjaman pendidikan sebagai dasar penyelesaian telah diperkenalkan, yang membawa kepada pembentukan badan berkanun PTPTN pada tahun 1997. Pada awalnya, PTPTN memberikan pinjaman pendidikan kepada 11 universiti awam (IPTA) dan beberapa universiti swasta (IPTS) yang dimiliki oleh beberapa syarikat berkaitan kerajaan (GLC).8 Permintaan untuk pinjaman pendidikan PTPTN juga telah meningkat, disebabkan kelulusan pinjaman yang mudah dan kadar faedah yang rendah.

Pada awal 2000-an, kelayakan pinjaman diperluaskan kepada pelajar dari institusi pendidikan tinggi swasta, termasuk kampus cawangan tempatan universiti luar negara. Selain memberikan pinjaman kepada pelajar dari lebih banyak institusi, PTPTN juga telah mula memberikan pinjaman bagi pengajian peringkat diploma dan sarjana.

Rajah 1 menunjukkan lonjakan jumlah bilangan pinjaman PTPTN yang diluluskan setiap tahun sementara Rajah 2 menunjukkan kenaikan jumlah amaun pinjaman PTPTN yang diluluskan setiap tahun. Lebih ketara lagi,  amaun pinjaman PTPTN yang diluluskan untuk pengajian di institusi swasta melebihi amaun yang diluluskan untuk pengajian di institusi awam sejak 2007 (lihat Rajah 2), walaupun jumlah pinjaman yang diluluskan, atau jumlah peminjam, untuk institusi awam tetap lebih tinggi daripada institusi swasta (lihat Rajah 1).

Rajah 1: Bilangan Pinjaman PTPTN yang Diluluskan, 2000-2018

Rajah 2: Jumlah Amaun Pinjaman PTPTN yang Diluluskan, 2000-2018

Sumber: Laporan tahunan PTPTN, buklet Info PTPTN, dan laporan “Kelestarian Skim Pinjaman PTPTN” oleh Penang Institute.

2 Mehmet, O., Hoong, Y.Y. “An empirical evaluation of government scholarship policy in Malaysia,” Higher Education 14, 197–210, 1985.
3 JPA telah menamatkan penawaran pinjaman pendidikan beberapa tahun selepas PTPTN ditubuhkan untuk mengelakkan pertindihan fungsi. Peruntukan JPA telah dipindahkan ke PTPTN, yang mengambil alih peranan sebagai penyedia pinjaman pendidikan yang utama.
4 Lihat “Introduction” in the Privatization Master Plan 1991. Lihat juga Khoo Boo Teik, Beyond Mahathir: Malaysian Politics and its Discontents. Zed Books, 2003.
5 Universiti-universiti yang dikorporatkan dijangka dapat menambah dan mempelbagaikan sumber pendanaan mereka melalui pelbagai kegiatan yang dapat menjana pendapatan seperti perniagaan, menawarkan lebih banyak program yang dapat dikomersialkan, dan meningkatkan yuran pengajian untuk mengurangkan pergantungan pada peruntukan kerajaan. Untuk perincian, lihat: Molly Lee (1998), “Corporatization and privatization of Malaysian higher education.” International Higher Education, 10.
6 Penubuhan universiti swasta, penaiktarafan kolej swasta menjadi kolej universiti dan universiti, dan jemputan kepada universiti negara asing untuk mendirikan kampus cawangan di Malaysia telah dibolehkan melalui undang-undang, polisi-polisi dan badan-badan baharu yang dibuat untuk memfasilitasi perkembangan industri pendidikan tinggi pada tahun 1990-an.
7 Dalam beberapa Perhimpunan Agung UMNO pada pertengahan 1990-an, para perwakilan telah membawa isu enrolmen pelajar Bumiputera yang rendah di IPTS. Di samping itu, mereka memberi amaran bahawa sekiranya universiti awam dikorporatkan, pelajar Bumiputera akan terkesan akibat kenaikan yuran pembelajaran.
8 Oleh kerana enrolmen pelajar Bumiputera di IPTS sangat rendah, pinjaman PTPTN untuk IPTS hanya diberikan kepada pelajar Bumiputera dalam beberapa tahun pertama operasi badan tersebut.

Impak dan beban yang tidak dijangka

PTPTN ditubuhkan untuk meluaskan akses ke pendidikan tinggi, terutamanya untuk belia dari isi rumah berpendapatan rendah hingga pertengahan. Dari segi pinjaman yang telah diagih, PTPTN telah pun hampir mencapai misi ini. Rekod PTPTN antara tahun 2014-2018 menunjukkan bahawa 66% daripada semua peminjam adalah golongan Bumiputera dan 55% dari semua peminjam tergolong dalam isi rumah B40 (lihat Rajah 3). Taburan jumlah pinjaman hampir sama rata antara mereka yang meminjam untuk membiayai program ijazah dan program diploma.

Rajah 3: Demografi peminjam PTPTN, 2014-2018

Walau bagaimanapun, dua isu yang besar dan tidak dijangka telah menjadi semakin ketara sejak penubuhan PTPTN. Isu yang pertama ialah jangkaan peningkatan mobiliti sosial yang tidak menjadi kenyataan.

(i) Pulangan dari pendidikan tinggi

Premis asas pemberian pinjaman pendidikan adalah kemampuan peminjam untuk membayar balik berkat potensi pendapatan yang lebih tinggi yang datang daripada pencapaian tahap kelayakan pendidikan tinggi. Pada tahap makro, anggapan ini seolah-olah benar; pendidikan tinggi masih mendatangkan gaji median yang lebih tinggi secara keseluruhan berbanding dengan pendidikan menengah dan rendah, seperti yang ditunjukkan dalam Rajah 4.

Rajah 4: Gaji Median Mengikut Tahap Pendidikan

Sumber: Laporan Survei Gaji & Upah, 2014-2019, Jabatan Perangkaan Malaysia.

Tetapi, jika kita meninjau secara mendalam di sebalik angka-angka aras tinggi ini, kita boleh menyimpulkan bahawa pulangan dari pendidikan tinggi tidak diagihkan secara sama rata. Ketidaksepadanan tenaga kerja dan genangan gaji dapat dilihat dari data pendapatan dan pengangguran peminjam PTPTN.

Kajian Pengesanan Graduan Malaysia (SKPG) 2018 menunjukkan bahawa hampir 60% graduan menganggur atau kekal menganggur setahun selepas tamat pengajian mereka. Daripada bilangan siswazah yang menganggur ini, separuh mempunyai pinjaman pendidikan untuk dibayar balik.9 Dalam kalangan  mereka yang bekerja, tinjauan tahun 2019 mengenai peminjam yang disurvei oleh PTPTN mendapati bahawa lebih daripada satu pertiga  responden mereka berpendapatan di bawah RM2,000 sebulan.10

Pilihan kursus atau program pengajian nampaknya tidak menjelaskan mengapa sebilangan peminjam menghadapi nasib yang lebih teruk daripada yang lain. Tinjauan yang dilakukan oleh Parti Keadilan Rakyat (PKR) pada tahun 2013 mendapati bahawa lebih sedikit daripada separuh dari 1,053 responden dari pelbagai bidang pengajian dan jurusan berpendapatan di bawah RM2,000.11 Walaupun kerajaan menggalakkan kursus sains dan teknologi berbanding kursus kemanusiaan12, tinjauan itu mendapati bahawa majoriti merasa dibebani oleh hutang pendidikan mereka tanpa mengira bidang pengajian.

Lebih serius lagi, kombinasi isu jangkaan pendapatan lebih tinggi yang tidak direalisasi dan beban hutang pendidikan paling menjejaskan peminjam dari golongan B40. Kajian PTPTN sendiri menunjukkan bahawa 97% penghutang lalai yang ditinjau berasal dari kumpulan pendapatan B40.13 Menurut golongan penghutang lalai ini, komitmen hutang yang tinggi dan pendapatan rendah adalah sebab-sebab utama mereka tidak membayar balik pinjaman; kurang daripada 10% mengaitkan kekurangan pembayaran mereka dengan tindakan protes atau kelemahan kaedah pungutan hutang oleh PTPTN. Jelaslah di sini bahawa mobiliti sosial untuk peminjam B40 tidak terjamin melalui pencapaian kelayakan pengajian tinggi.

Selain daripada mobiliti sosial, timbul juga persoalan berkenaan kesaksamaan. Lazimnya peminjam dijangka habis membayar balik pinjaman dalam masa 20 tahun atau kurang, tetapi PTPTN membenarkan mereka untuk merundingkan penstrukturan semula pinjaman dan memanjangkan tempoh bayaran balik sehingga mereka mencecah umur 60 tahun.

Jika peminjam menangguhkan bayaran balik atau menstruktur semula pinjaman mereka (contohnya dengan membayar ansuran bulanan yang lebih rendah untuk tempoh yang lebih lama), akhirnya mereka akan membayar lebih banyak faedah berbanding dengan peminjam yang berpendapatan tinggi dan berupaya untuk membayar balik pinjaman dengan lebih cepat. Tempoh bayaran balik yang berpanjangan bermakna peminjam yang berpendapatan rendah bukan hanya membayar faedah yang lebih tinggi, tetapi sebahagian besar daripada kehidupan dewasa mereka ditempuhi dalam keadaan berhutang.

Memandangkan pulangan daripada pendidikan tinggi kurang terjamin pada masa ini dan telah menjejaskan golongan B40 secara tidak seimbang, adalah wajar untuk menilai semula pendekatan  PTPTN sebagai instrumen dasar pembiayaan pendidikan tinggi.

9 Laporan Kajian Pengesanan Graduan 2018, Kementerian Pendidikan Tinggi Malaysia. Untuk suku pertama 2021, PTPTN membenarkan peminjam yang menghadapi masalah kewangan kerana pandemik Covid-19 untuk memohon penangguhan bayaran balik pinjaman.
10 Wan Saiful Wan Jan, “Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb,” ISEAS-Yusof Ishak Institute, April 2020.
11 Tinjauan ini adalah sebahagian daripada inisiatif dan kempen untuk menuntut pendidikan percuma di universiti awam. Dengan demikian, kaedah persampelan mungkin mencerminkan pengalaman pelajar dan lulusan universiti awam secara tidak proporsional.
12 Dorongan kerajaan terhadap kursus-kursus sains & teknologi tercermin dalam dasar: dalam kalangan kumpulan pertama peminjam PTPTN, mereka yang mengambil kursus sains dan teknologi dikenakan kadar faedah 2% manakala mereka yang mengikuti kursus sastera dan kemanusiaan dikenakan kadar faedah 4% .
13 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.

(ii) Kemampanan kewangan PTPTN

Perkara yang sering dibangkitkan mengenai kelestarian kewangan PTPTN adalah cabaran memungut balik pinjaman dari penghutang. Jumlah pungutan sememangnya adalah lebih rendah daripada yang diunjurkan. Sosok si penghutang lalai yang ‘tidak bermoral’ sering dikaitkan dengan situasi ini, tetapi dakwaan ini hanya separuh sahih sahaja.

Melainkan terdapat pengecualian, kebanyakan peminjam PTPTN diminta untuk mula membayar balik pinjaman pendidikan mereka 12 bulan setelah graduasi dari program pengajian mereka. Daripada 3 juta peminjam, 1.9 juta sepatutnya sedang membayar atau telah melunaskan pinjaman mereka pada masa ini.

Rajah 5 menunjukkan jumlah bayaran balik pinjaman dan kurangan yang dihadapi oleh PTPTN. Dari segi jumlah peminjam, 81% daripada 1.9 juta peminjam yang sepatutnya mula membayar balik pinjaman mereka telah sama ada menyelesaikan pembayaran mereka, pernah/sedang membayar secara konsisten, atau pernah/sedang membayar secara tidak konsisten. Keseluruhan pinjaman yang dipungut dari 1.9 juta peminjam ini berjumlah RM14.3 bilion.14 Sekumpulan minoriti yang agak besar, 19% peminjam, gagal membuat pembayaran sama sekali dengan jumlah keseluruhan sebanyak RM2.8 billion.

Rajah 5: Pungutan dan Kurangan Pinjaman PTPTN, mulai 2018

Sumber: Laporan tahunan PTPTN 2018.

Seperti yang telah dinyatakan sebelum ini, tinjauan PTPTN sendiri menunjukkan bahawa hampir semua peminjam lalai berasal dari isi rumah B40 yang berhadapan dengan masalah kewangan.15 Tinjauan yang sama mendapati bahawa 74% peminjam tidak mempunyai pendapatan tetap atau berpendapatan di bawah RM2,000 setelah tamat pengajian berbanding dengan 52% peminjam. 16 Oleh itu, naratif dan retorik yang menggambarkan peminjam yang mempunyai tunggakan sebagai individu “tidak tahu malu” atau “tidak bertanggungjawab” adalah kurang tepat. Naratif pungutan hutang yang lemah juga kurang berasas – bayaran balik sukar dikuatkuasakan sekiranya peminjam tiada lebihan pendapatan

Bayaran balik hutang sememangnya sesuatu yang penting, namun isu yang lebih serius berkaitan kelestarian keadaan kewangan PTPTN (dan kurang dibincangkan) ialah struktur kewangan badan ini. Dalam lima tahun pertama operasi PTPTN, ia telah menerima geran langsung kerajaan untuk memberi pinjaman kepada pelajar. Selepas tempoh lima tahun ini, PTPTN telah bergantung kepada pinjaman dari pasaran kewangan, melalui pinjaman dan juga penerbitan sukuk, untuk membiayai operasi pemberian pinjamannya (lihat Rajah 6).17 Pada akhir tahun 2018, PTPTN mempunyai pinjaman yang dijamin oleh kerajaan yang berjumlah hampir RM40 bilion yang diramalkan akan meningkat kepada RM76 bilion dalam masa dua puluh tahun akan datang.

Rajah 6: Hutang Terkumpul PTPTN, pada akhir 201818

Jurang kadar faedah yang ketara antara pinjaman yang diambil oleh PTPTN (daripada institusi kewangan) dan pinjaman yang diberikan kepada pelajar menunjukkan suatu model yang jelas tidak mampan. PTPTN secara terbuka mengakui fakta ini apabila Pengerusinya menyatakan bahawa “PTPTN meminjam dari pasaran kewangan pada purata kadar faedah antara 4% hingga 5%, dan pada masa yang sama hanya caj 1% kepada peminjam. Perbezaan ini hanya memburukkan keadaan setiap tahun dan telah menyumbang kepada beban hutang PTPTN.” 19

Pinjaman yang diambil oleh PTPTN daripada institusi kewangan adalah dijamin oleh kerajaan dan melihat kepada saiz hutang yang belum dijelaskan,  terdapat kemungkinan kerajaan dan pembayar cukai perlu menampung hutang dan pembayaran faedahnya selama beberapa dekad yang akan datang.

Pada tahun 2018 sahaja, PTPTN telah menerima RM 1.94 bilion dari kerajaan, di mana sejumlah besar daripada itu, iaitu RM1.74 bilion, digunakan untuk membayar  kos faedah kepada institusi kewangan. Badan berkanun ini menganggarkan bahawa ia kini bertanggungjawab untuk hutang yang berjumlah hampir RM40 bilion dan faedah sebanyak RM13 bilion. Rajah 7 memberi gambaran pembayaran faedah PTPTN kepada institusi kewangan dari tahun 2011 hingga 2018, yang puratanya mencapai 73% dari perbelanjaan tahunannya.

Rajah 7: Pembayaran Faedah PTPTN lwn Jumlah Perbelanjaan, 2011 – 2018

Sumber: Laporan tahunan PTPTN dan Laporan “The Sustainability of the PTPTN Loan Scheme” oleh Penang Institute.

Memandangkan jumlah hutang yang banyak dan yang terus bertambah dari tahun ke tahun, adalah wajar untuk bertanya sama ada suntikan dana untuk melunaskan pinjaman institusi ini benar-benar membantu merealisasikan tujuan asal PTPTN, atau sama ada ia merupakan jalan yang berbelit untuk membiayai pendidikan tinggi melalui sistem percukaian negara.

14 Pembayar yang tidak konsisten adalah mereka yang membuat bayaran dan kemudian berhenti sebelum menyelesaikan hutang, atau mereka yang membayar secara konsisten tetapi pada kadar yang lebih rendah dari jumlah yang ditetapkan
15 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.
16 Ibid
17 Ibid
18 Walaupun mereka mempunyai tempoh pematangan yang berbeza, kami mengumpulkan jumlah pelbagai sukuk yang dibeli oleh setiap institusi kewangan untuk tujuan ilustrasi di atas. Sukuk PTPTN dijamin tanpa syarat oleh Kerajaan Malaysia yang melindungi daripada kehilangan modal.
19 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.

Impak meluas hutang pendidikan sebagai instrumen dasar kerajaan

Keperluan untuk mereformasi pembiayaan pendidikan tinggi telah diakui oleh penggubal dasar dan juga PTPTN melalui pelbagai cara. Seorang pegawai kanan PTPTN telah memberitahu penyelidik bahawa mereka mengambil berat isu pengangguran siswazah dan juga kemungkinan golongan belia menjadi muflis. “Kami bukan hanya bimbang tentang pungutan hutang, tetapi juga graduan yang tidak mempunyai pekerjaan tetapi mempunyai banyak hutang. Sebagai contoh, jika seseorang mengambil ijazah di IPTS, dia akan berhutang kira-kira RM 60,000. Cuba bayangkan jika anda mengambil kursus yang tiada permintaan di pasaran pekerja. Tiba-tiba anda mempunyai hutang sebanyak RM60,000. PTPTN juga mempunyai kuasa untuk membankrapkan orang. Jadi kami tidak mahu orang mempunyai hutang yang tidak mampu dibayar, terutamanya golongan muda.”20

“Kita sebenarnya…bukan worry pada duit (hutang) yang banyak sahaja, tapi juga graduate yang grad tapi tak ada pekerjaan dan ada hutang yang banyak. Just imagine, contoh kalau diorang ambil [degree] dekat IPTS so dia ada akan berhutang dengan kita dalam 60k..sekejap, degree IPTS 13-14k setahun, 4 tahun = RM 56,000. Just imagine kalau you ambil kursus yang belum tentu ada kerja. So RM56,000 tiba2 you ada hutang. And even…PTPTN boleh memufliskan orang. So kita tak nak..orang ada hutang yang salah, especially orang yang muda.“

Sejak tahun 2004, PTPTN telah mempromosikan skim simpanan SSPN dengan sokongan daripada kerajaan. Penabung dalam skim ini layak mendapat pelepasan cukai sehingga RM8,000. Penabung berpendapatan rendah juga layak mendapat sumbangan yang sepadan hingga maksimum RM10,000.

Lebih banyak perubahan mungkin berlaku pada masa akan datang. PTPTN baru-baru ini telah menyatakan bahawa satu rancangan strategi baru akan dilancarkan pada bulan Jun 2021 untuk menambah baik fungsi badan berkanun tersebut. Meskipun  kami menantikan pengumuman ini, kami juga berpendapat bahawa masalah yang kita hadapi melangkaui isu daya maju PTPTN itu sendiri, dan ia merangkumi soal peranan pendidikan tinggi kepada negara dan penilaian semula model pembiayaannya.

Enrolmen pendidikan tinggi sering dipuji sebagai salah satu kisah kejayaan Malaysia. Tahun lalu, Jabatan Perangkaan melaporkan bahawa terdapat sebanyak kira-kira 5.3 juta graduan.21 Enrolmen pelajar di institusi pengajian tinggi awam dan swasta pada tahun 2010 adalah enam kali ganda dari tahun 1990.22

Namun, seperti yang dinyatakan di atas, pulangan dari pendidikan tinggi tidak terjamin, terutamanya bagi penghutang pinjaman pendidikan dari golongan B40. Massifikasi pendidikan tinggi – baik dari segi enrolmen pelajar atau jumlah institusi pendidikan tinggi di negara ini – adalah sebahagian daripada masalah ini.

Sejak akhir 1990-an, PTPTN telah berfungsi sebagai penghubung ekosistem pendidikan tinggi di Malaysia dengan pemberian pinjaman pada kadar faedah yang rendah dan mudah diperoleh. Kolej-kolej swasta khususnya sangat bergantung pada pinjaman pendidikan, dan kolej-kolej dengan kualiti yang berbeza-beza telah berkembang pesat kerana kemudahan kelulusan pinjaman pendidikan yang ditawarkan melalui PTPTN dan kurangnya peraturan kualiti.21 Peraturan-peraturan yang lebih baik diharapkan boleh mengurangkan jumlah kolej yang tidak berkualiti tetapi Malaysia masih perlu bergelut dengan soalan-soalan teras seperti yang berikut: pertama, apakah pulangan sebenar daripada pelbagai jenis pengajian yang ditawarkan dan kedua, bagaimanakah pendidikan tinggi atau pendidikan berterusan dapat dibiayai secara berkesan, adil dan saksama.

Dalam Bahagian 2 siri penyelidikan ini, kami akan mengutarakan kebaikan dan kelemahan pelbagai cadangan dasar untuk mereformasi hutang pendidikan dan pembiayaan pendidikan tinggi di Malaysia. Nantikan.

20  Temu ramah penulis dengan pegawai kanan PTPTN, 17 Februari 2020.
21 “Graduates Statistics 2019,” Jabatan Statistik Malaysia. diterbitkan pada 16 July 2020.
22 Malaysia Education Blueprint 2015-2025 (Higher Education). Kementerian Pendidikan Malaysia.
23 Kementerian Pengajian Tinggi telah berusaha untuk menguatkuasakan standard. Agensi Kelayakan Malaysia (MQA) ditubuhkan pada tahun 2007 dan pihak kementerian merancang untuk mewajibkan semua IPTS untuk dinilai melalui Sistem penilaian Kualiti Malaysia untuk Kolej Swasta (MyQuest) dan sistem penilaian Sistem Pendidikan untuk Pendidikan Malaysia (SETARA).

Indebted Generation

How do Malaysians pay for higher education? For a generation of young people, the answer is and has been student loans. 

Student debt is both common and unique among the generation who enrolled in higher education after the new millenium. It is common due to the pervasive take-up of tertiary education loans issued by the National Higher Education Fund Corporation (PTPTN), the statutory body created to provide low-cost higher education financing. According to a 2018 Agensi Kaunseling dan Pengurusan Kredit (AKPK) report, student debt is the second most common debt among youth aged 20-29 years old.

At the same time, student debt is also unique for a generation of Malaysians. Unlike previous generations, the current young cohort has a significant debt burden even before entering the workforce. We estimate that on average, students enrolling in a local public university or a local private university today will accumulate student debt of RM26,600 and RM56,120 respectively for a four-year degree. 1

The popularisation of students loans is partially driven by expansions in the type and length of courses covered as well as the number of qualifying private higher education institutions. Nevertheless, the expansion of student debt is occurring together with what appears to be diminishing returns to higher education. A recent Department of Statistics report quoted the Chief Statistician as saying that “new degree graduates recorded a decrease in monthly income where the majority of them earned between RM1,001 and RM1,500 in 2020 compared to RM2,001-RM2,500 in 2019.” 

COVID-19 certainly plays a major role here but even before the pandemic, job-seeking graduates faced uncertain employment prospects, labour market mismatch and stagnant wages. Today, the promise of social mobility through higher education is less secure compared to decades past when graduates were scarce.

Nearly two years ago, we published a primer on the cost of higher education in Malaysia which drew a broad picture of higher education fees and means of financing. This time, we examine Malaysia’s main national policy plank in financing higher education, i.e. student loans, in order to address questions about this policy’s long-term sustainability and relevance. But first, a look at the policy’s history. 

1 Per PTPTN’s borrowing schedule, the amount is obtained by calculating the full loan amount for a four-year first degree course based on annual qualified disbursements per IPTA/IPTS student.

Higher education (and student loans) for all

In the early 1980s, two-thirds of students enrolled in Malaysian public universities (only five existed then) were funded by government scholarships granted by either the Public Service Department (JPA) or by a statutory body.2 A small number of student loans was offered by government agencies such as JPA and Majlis Amanah Rakyat (MARA).3

The shift to student loans as the primary means to fund higher education began in the 1990s, driven by the aim to rapidly increase higher education enrollment and produce an educated workforce. The policy is borne out of the Malaysia Incorporated Policy, initiated by then Prime Minister Tun Dr. Mahathir Mohamad to reduce reliance on state resources, boost the role of private markets while promoting the economic advancement of Bumiputeras.4

Two broadly related changes occured at the time – corporatization of public universities5 and rapid expansion of private higher education institutions.6 These changes created more student places in higher education, but it also increased the cost. This became a politically heated issue, particularly the challenge of Bumiputera students’ limited capacity to pay for higher tuition fees.7

The idea of student loans as a policy solution was thus introduced, leading to the creation of statutory body PTPTN in 1997. In its early years, PTPTN provided student loans to 11 public universities (IPTA) and a few private universities (IPTS) owned by government-linked companies.8 There was a great demand for PTPTN’s student loans, due to the relative ease of approval and low interest rate.

In the early 2000s, loan eligibility was extended to students from more private higher education institutions, including local branch campuses of foreign universities. On top of providing loans to students from a greater number of institutions, PTPTN also started to provide loans for diplomas and master’s degrees. 

Figure 1 shows the surge in the number of PTPTN loans approved annually while Figure 2 shows the rise in the total amount of PTPTN loans approved annually. Notably, the monetary amount of PTPTN loans approved for study in private institutions surpassed the amount of loans approved for study in public institutions since 2007 (see Figure 2), though the number of loans approved, or number of borrowers, for public institutions remain higher than for private institutions (see Figure 1).

Figure 1: Number of PTPTN Loans Approved, 2000-2018

Source: PTPTN annual reports, Info PTPTN booklet, and “The Sustainability of the PTPTN Loan Scheme” report by Penang Institute.

Figure 2: Total Amount of PTPTN Loans Approved, 2000-2018

Source: PTPTN annual reports, Info PTPTN booklet, and “The Sustainability of the PTPTN Loan Scheme” report by Penang Institute.

2 Mehmet, O., Hoong, Y.Y. “An empirical evaluation of government scholarship policy in Malaysia,” Higher Education 14, 197–210, 1985.
3 JPA ceased to offer student loans a few years after PTPTN was formed to avoid overlapping functions. Their allocation was transferred to PTPTN, which assumed the role of the main student loan provider.
4 See the “Introduction” in the Privatization Master Plan 1991. See also Khoo Boo Teik, Beyond Mahathir: Malaysian Politics and its Discontents. Zed Books, 2003.
5 Corporatized universities are expected to raise and diversify their sources of funding through a variety of revenue-generating activities such as venturing into business, offering more commercially-viable programs, and increasing tuition fees to reduce reliance on state allocation. For details, see: Molly Lee (1998), “Corporatization and privatization of Malaysian higher education.” International Higher Education, 10.
6 The establishment of private universities, the upgrading of private colleges into university colleges and universities, and the invitation to foreign universities to set up branch campuses in Malaysia was made possible by a slew of new laws, policies, and bodies to facilitate the expansion of the higher education industry in the 1990s.
7 During UMNO General Assemblies in the mid-1990s, delegates spoke out against the low enrollment of Bumiputera students in IPTS. In addition, they warned that if public universities were corporatized, Bumiputera students would be affected in the event of tuition hike.
8 Due to very low Bumiputera enrolment in IPTS, PTPTN loans for IPTS were only provided for Bumiputera students in its first few years of operation.

Unintended consequences and burdens

PTPTN was created to enable greater access to higher education, particularly for youth in low-to-mid income households. In terms of loan disbursements, PTPTN appears to have stuck close to this mission. Relatively recent PTPTN records indicate that 66% of all borrowers are Bumiputera and 55% of all borrowers come from B40 households (see Figure 3). The loans are almost evenly split between those who borrow to finance degree programs versus diploma programs.

Figure 3: Demographics of PTPTN borrowers, 2014-2018

However, two unintended and major problems have become increasingly clear since PTPTN’s inception. The first problem is the unrealised assumption of upward social mobility. 

(i) The returns from tertiary education

The basic premise of student loans is borrowers’ ability to repay, thanks to higher earning potential from obtaining tertiary qualifications. At a macro level, this assumption appears to hold largely true; tertiary education still generates higher median wages overall compared to secondary and primary education as shown in Figure 4.

Figure 4: Median Salary and Wages By Education Level

Source: Salaries & Wages Survey Report, 2014-2019, Department of Statistics, Malaysia.

However, if we look beneath these high-level numbers, we can safely conclude that the returns from tertiary education is not evenly distributed. The impact of labour mismatch and wage stagnation can be seen from PTPTN borrowers’ earnings data and unemployment data. 

The 2018 Malaysia’s Graduate Tracer Study (SKPG) showed that almost 60% of graduates were or remained unemployed a year after graduation. Of these unemployed graduates, half of them have student loans to service.9 Of those employed, a 2019 survey on borrowers commissioned by PTPTN found that more than one-third of their respondents earn below RM2,000 a month.10

Choice of course or program doesn’t seem to explain why some borrowers fare worse than others. A survey done by Parti Keadilan Rakyat (PKR) in 201311 discovered that slightly more than half of the 1,053 respondents across different fields of study earn below RM2,000. Despite the government’s encouragement of science and technology courses over humanities courses12, the survey found that a majority felt burdened by their student debt regardless of their field of study. 

More seriously still, the combination of unmet higher earnings potential and the burden of student debt seems to impact B40 borrowers disproportionately. PTPTN’s own study revealed that 97% of the loan defaulters surveyed were from the B40 income group.13 Defaulters cited high debt obligations and low income as the primary reasons for their non-payment; less than 10% attributed their lack of payment to an act of protest or lax debt collection by PTPTN. Evidently, social mobility for B40 student borrowers is by no means assured by attaining tertiary qualifications. 

Apart from social mobility, there is also the question of equitability. Typically, borrowers are expected to pay off their debt in 20 years or less but PTPTN allows borrowers to negotiate loan restructuring and stretch the repayment period until the borrower reaches 60 years of age.

If borrowers defer their payments or restructure their loans (e.g. pay a lower monthly instalment for a longer period of time), they will end up paying more interest than those who earn more and who can settle their loan quicker. A prolonged period of repayment means that lower-income borrowers are not only paying more interest, they’re also in debt for an extended period of their adulthood.

Given that the returns on higher education are less secure today, and appear to impact those from the B40 disproportionately, one can reasonably ask whether PTPTN loans as a policy instrument for higher education funding is ripe for a significant rethink.

9 Laporan Kajian Pengesanan Graduan 2018, Kementerian Pendidikan Tinggi Malaysia. For the first quarter of 2021, PTPTN allows borrowers who are facing financial difficulties due to Covid-19 pandemic to request for deferring payment.11 JPA ceased to offer student loans a few years after PTPTN was formed to avoid overlapping functions. Their allocation was transferred to PTPTN, which assumed the role of the main student loan provider.
10 Wan Saiful Wan Jan, “Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb,” ISEAS-Yusof Ishak Institute, April 2020.
11 The survey was part of an initiative and campaign calling for free education at public universities and as such, the sampling methodology may disproportionately reflect the experience of students and graduates from public universities.
12 The government’s encouragement of science & technology courses is reflected in policy: among the first batches of PTPTN borrowers, those who took science and technology courses were charged a 2% interest rate while those who took arts and humanities courses were charged a 4% interest rate.
13 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.

(ii) The sustainability of PTPTN itself

The more well-known issue regarding PTPTN’s financial sustainability is its loan collection tribulations, which have been lower than projected. The spectre of ‘immoral’ delinquent debtors is often invoked in connection with this, but this claim is only partially true.

Apart from some exceptions, most PTPTN borrowers are required to start paying off their student loans 12 months after they graduate from their program of study. Out of approximately 3 million borrowers, about 1.9 million borrowers are supposed to be paying or have paid off their loans at this juncture. 

Figure 5 shows the loan repayment amount and the shortfall faced by PTPTN. In terms of the numbers of borrowers, 81% of the 1.9 million borrowers who are supposed to have started paying back their loans have either completed their payment, are paying consistently, or were/are paying inconsistently; overall loans collected from this 1.9 million borrowers amount to RM14.3 billion.14 An admittedly large minority, 19% of borrowers, fail to make any payment at all to a total of RM2.8 billion. 

Figure 5: PTPTN Loan Collection and Shortfall, as of 2018

Source: PTPTN annual report 2018.

As mentioned in the previous section however, PTPTN’s own survey provided evidence that almost all of the loan defaulters are from B40 households facing financial problems.15 The same survey found that 74% of defaulters have no regular income or earned below RM2,000 after graduation compared to 52% of borrowers.16 Therefore, the larger narrative and rhetoric depicting delinquent borrowers as “shameless” or “irresponsible” individuals is not entirely accurate. The narrative of lax debt collection is also evidently unfounded – repayments are difficult to enforce if there is no spare income.

Repayment is an important, but the less discussed yet arguably more serious issue with respect to PTPTN’s financial sustainability is its financial structure. For the first five years of its operations, PTPTN received direct government grants to lend on to student borrowers. After these initial years however, PTPTN has relied on borrowing from the financial markets, via loans as well as sukuk issuance, to fund its lending operations (see Figure 6).17 As of the end of 2018, PTPTN had government-guaranteed borrowings of nearly RM40 billion and this amount is projected to rise to RM76 billion in twenty years.

Figure 6: Debts Accumulated by PTPTN, as at end 201818

The significant interest rate gap between PTPTN’s borrowings and its lending makes for a clearly unsustainable model. PTPTN has openly acknowledged this fact with its Chairman saying “PTPTN borrows from the financial market at, on average, 4 to 5% interest rate, while it charges borrowers just 1%. The difference has been compounding year-on-year for twenty years, contributing significantly to PTPTN’s mountain of debt.”19

PTPTN’s borrowings are guaranteed by the government and given the size of the outstanding debts, it appears likely that the government and taxpayers would have to pay for its debt and interest payments for decades to come.

In 2018 alone, PTPTN received RM 1.94 billion from the government, of which the large sum of RM1.74 billion went towards servicing these debts. The statutory body estimates that it is currently responsible for almost RM40 billion in debt and another RM13 billion in interest. Figure 7 illustrates PTPTN’s interest payments to financial institutions from 2011 to 2018, which come up to an average of 73% of its annual expenditure.

Figure 7: PTPTN Interest Payments vs. Total Expenses, 2011 – 2018

Source: PTPTN annual reports and “The Sustainability of the PTPTN Loan Scheme” report by Penang Institute.

Given the sheer amounts involved, which continue to compound year on year, one can reasonably wonder whether the funding injections to service these institutional borrowings is really achieving the original purpose of PTPTN, or whether it is a roundabout way of financing national higher education via taxation.

14 Inconsistent payers are those who make payments and subsequently stop before settling the debt, or those who pay regularly but below the stipulated amount.
15 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.
16 Ibid.
17 Ibid.
18 Although they have different maturation periods, we aggregated the sum of the various sukuk purchased by each respective financial institution for illustration purposes above. PTPTN’s sukuk is unconditionally guaranteed by the Government of Malaysia which protects against capital loss.
19 Wan Saiful Wan Jan, Malaysia’s Student Loan Company: Tackling the PTPTN Time Bomb, ISEAS-Yusof Ishak Institute, April 2020.

The wider ramifications of student debt as policy instrument

The need to reform higher education financing has been acknowledged by policymakers and PTPTN in various ways. A senior PTPTN officer remarked to this researcher that they are concerned about graduate unemployment and even the possibility of pushing the youth into bankruptcy. “We are not just worried about money, but also graduates who don’t have a job but have a lot of debt. For example, if someone takes a degree at IPTS, he will owe us about RM 60,000. Just imagine if you take a course that doesn’t result in a job. Suddenly you have a debt of RM60,000. PTPTN can even bankrupt people. So, we don’t want people to have the wrong debt, especially young people.”20

“We are not just worried about money, but also graduates who don’t have a job but have a lot of debt. For example, if someone takes a degree at IPTS, he will owe us about RM 60,000. Just imagine if you take a course that doesn’t result in a job. Suddenly you have a debt of RM60,000. PTPTN can even bankrupt people. So, we don’t want people to have the wrong debt, especially young people.”

Since 2004, the student loan agency has been promoting the SSPN savings scheme, with support from the government. Scheme savers qualify for up to RM8,000 in tax relief. Low-income savers also qualify for matching grants up to a maximum of RM10,000.

More changes may be afoot. PTPTN recently indicated that a new strategic plan will be launched in June 2021 to improve their functions and remain viable. While we look forward to this announcement, we also argue that the problem goes beyond the viability of PTPTN, and that it goes to the question of the role of higher education and a rethink of funding models.

Higher education enrollment in Malaysia is often lauded as one of Malaysia’s success stories. Last year, the Department of Statistics reported that there are approximately 5.3 million graduates.21 Student enrolment in public and private higher education institutions in 2010 was six times the number in 1990.22

Yet, as stated above, the returns from higher education are not guaranteed, particularly it seems for B40 PTPTN borrowers. The massification of higher education – both in terms of the number of student enrollment and the number of higher education institutions in the country – is part of the issue.

Since the late 1990s, PTPTN has functioned as the lynchpin of the higher education ecosystem by providing low-rate, easily obtainable loans. Private colleges in particular rely heavily on student loans, and colleges of varying quality have mushroomed over the years due to the ease of loan approval and the lack of quality regulation.23 Better regulations will hopefully reduce the number of substandard colleges but Malaysia still needs to grapple with the following core questions: firstly, what are the real returns to different types of education and secondly, how can higher or continuing education be financed effectively and equitably.

In Part 2 of this research series, we will outline the trade-offs of different policy proposals to reform student debt and higher education financing in Malaysia. Stay tuned.

20 Author’s interview with a senior PTPTN bureaucrat, 17 February 2020.
21 “Graduates Statistics 2019,” Department of Statistics, Malaysia. Released on 16 July 2020.
22 Malaysia Education Blueprint 2015-2025 (Higher Education). Ministry of Education Malaysia.
23 The Ministry of Higher Education has been making efforts to enforce standards. The Malaysian Qualifications Agency (MQA) was established in 2007 and the ministry plans to make it compulsory for all IPTS to go through the Malaysian Quality Evaluation System for Private Colleges (MyQuest) and Rating System for Malaysian Education (SETARA) rating systems.

Flattening the Curve of Online ‘Fake News’ in Malaysia

At the time of this writing, Klang Valley is into the fifth day of its third MCO since the COVID-19 pandemic broke out last year. Due to the incredible number of daily cases, many of us had anticipated the MCO announcement, despite our hopes for a ‘new normal’ Raya. 

Apart from the appalling case numbers, the anticipation of an MCO was also partially fueled by rumours of its announcement swirling through social media. The subsequent response by the authorities however, is emblematic of our incomplete approach to misinformation today. 

In response to the earlier rumours, the government through the Ministry of Communication and Multimedia’s Quick Response Team (QRT) issued a statement to brand it as ‘fake news’. Together with the statement was a reminder to the people not to share unverified news which can cause public confusion and anxiety. This response encapsulates the long-standing approach to  information disorder in Malaysia: fact-checking (when needed), followed by press statements denying a message’s  authenticity together with public reminders and warnings. 

This approach is not wrong per se, but is it sufficient? The received wisdom has been that people will be dissuaded from sharing a post if it is checked and confirmed as false. However, a recent study by Pennycook et.al. suggests otherwise; flagged content does not always influence people’s intention to share. People may continue to share such information as a result of “inattention” – they are distracted by other factors such as the desire to attract their followers.

Confirming the truth or falsity of a post or message is, we argue, insufficient. The reminders and warnings to users also fail to take into account the psychology of  sharers; we instead assume people’s bad intent from the outset which of course leads to our overwhelming reliance on punitive measures.

‘Fake news’ can threaten public safety but as we have argued in a related recent article,  there needs to be more effective and innovative ways of managing misinformation. The brutal fact is that ‘fake news’ and misinformation have been with us from time immemorial but its mode of proliferation today means that our initiatives (and mindset) need to be updated.

Initiatives to deal with fake news should be aimed at pre-empting their spread via intervention at the point of sharing. This can be done by “nudging” social media users to think about the accuracy of the news that they are about to share. Nudging is the  act of gently steering people to make informed choices without having to prescribe the “truth” to them.

A number of social media platforms, including Facebook, Twitter, and TikTok, are already applying their own versions of nudging. TikTok, which engaged the services of behavioural scientists inspired by Pennycook et.al’s study, has seen a significant reduction in the sharing of flagged content.

We believe that a collaboration between the government and social media platforms to step up such nudges – with local language for example – would be a step in the right direction. Last month, the COVID-19 Immunisation Task Force (CITF) started working with Facebook to remind people to look beyond the headlines and to check for accuracy of the information they are about to share; this is a good start but  it needs to be inserted at the right points of content consumption in order to reduce unthinking or reflexive sharing.

Nudging can also alleviate the reliance on fact-checking, which can be slow and laborious. With nudging, the need to establish the “truth” of the information each time is circumvented and we can rely instead on slowing down unproductive sharing behaviour. Pennycook et.al.’s study shows that when people are prompted to consider the accuracy of the news items that they are about to share, the spread of misinformation can be reduced.

Rather than relying on falsifying  ‘fake news’, it is possible to get ahead of misinformation through nudging. This way, we can help reduce the need for punitive measures and at the same time protect our right to (responsible) free speech and media consumption. The question is, are we heading down the approach of innovative interventions, or are we continuing to rely on the same way of handling misinformation?

A Year Of Living Under COVID-19

In Part 1 of this research series on COVID-19 and well-being, we found that more than half of survey respondents reported experiencing worsened mental well-being over the past year. In terms of demographics, women and people under 35 years old showed the worst mental health scores relative to other demographic groups, in both incidence as well as severity. The survey also showed a clear relationship between physical and mental well-being; those who reported worsened mental well-being over the past year were more likely to report worsened physical well-being too.

Part 2 of this research series discussed findings on the effects of living arrangements, and social isolation emerged as a possibly important driver of mental health. Respondents who live alone seemed to experience worse mental well-being levels compared to those who live with other people. Respondents who work from home every day also appeared to have worse mental well-being scores compared to those who work from home less often.

In this third instalment of the research series, we analyse respondents’ answers on changes to employment and income during the past year against their reported mental well-being levels. As can be expected, precarious employment status had a negative effect on mental health. 

Note: Respondents’ mental health or well-being was measured against their responses to the DASS-21 questionnaire. For more details on how the DASS-21 questionnaire was applied, as well as the study’s overall methodology, please refer to Part 1.

Employment Status and Well-being

As shown in Figure 1, unemployed respondents reported the worst levels of mental well-being compared to others, across all dimensions measured i.e. in levels of mild to extremely severe depression (77%), anxiety (73%) and stress (62%) respectively. This is closely followed by respondents who are part-time employees, who reported the second highest levels of depression (70%) and stress (52%) relative to other respondents. 

In terms of severity, respondents who are unemployed or who are part-time employees reported very similar levels of severe and extremely severe depression (43%-50%), anxiety (39%-46%) and stress (33%-34%).

Figure 1: Employment Status and Levels of Reported Well-being

Changes in Employment Status and Well-being

Respondents were asked how work had changed for them in the past year in order for us to ascertain if specific changes had different effects on mental well-being levels. 

As shown in Figure 2, respondents who are still full-time employees at the time of the survey had the least change in work compared to respondents with other employment status, many of whom experienced reduced pay, retrenchment or business closure.

Figure 2: Employment Status vs. Changes in Work Over The Past Year

Did these specific work changes produce different mental health effects?

Figure 3 below shows that the answer is likely no; the various ways in which work changed for respondents resulted in fairly similar* levels of negative mental health. The key takeaway here is that those who had the least impact on their mental well-being were respondents who did not experience much change in their working life compared to other respondents.

Figure 3: Changes in Work and Levels of Reported Well-being

*Note: Respondents who are unable to work (reasons unprobed) showed slightly higher levels of depression (83%) and stress (75%) compared to other respondents, as well as very severe levels of anxiety (75%) and stress (59%) comparatively. However, as these respondents make up a small percentage of the sample (under 2%), we abstain from singling out this group in this analysis.

Income and Well-Being

Respondents’ work changes shown in Figure 2 above had corresponding implications on their income. As shown in Figure 4 below, respondents who are full-time employees were the most stable, experiencing the least income contraction relative to other respondents.

In comparison, the majority of part-time employees, the self-employed, business owners and the unemployed reported levels of income decline. Business owners, freelancers/self-employed/gig workers and the unemployed appear to suffer the most acute contraction, with over 70% of them reporting drops in income by more than 20% over the past year.

Figure 4: Employment Status vs. Changes in Income Over the Past Year

How did changes in income impact mental well-being? The picture is more mixed compared to changes in employment; Figure 5 below shows that those with reduced income reported slightly higher levels of depression and anxiety but respondents with increased income reported quite similar levels of depression and anxiety, and even higher levels of stress. Other factors may likely be bigger predictors of mental health levels than changes in income, which may have been cushioned to some extent by various buffers such as family support, governmental cash transfers and EPF withdrawals.

Figure 5: Changes in Income and Levels of Reported Well-being

In addition to changes in income, respondents were also asked to state their current personal income as well as their current household income, shown in Figure 6 below. More than half of respondents who are part-time employees or freelancers/gig workers/self-employed declared earning less than RM2,500 in gross personal income, as well as a large proportion (46%) of business owners. Household incomes for most respondents are generally higher than personal incomes, though quite a large proportion of respondents who are unemployed or part-time workers are in the RM2,500 and under income band for both personal and household income.

Figure 6: Gross Personal and Household Income, Overall and by Employment Status

But does absolute income have a significant impact on mental well-being? 

Figure 7 shows that respondents who earn monthly personal incomes of RM5,000 and below report slightly higher levels of depression, anxiety and stress compared to respondents who earn higher levels of personal income.

Figure 7: Gross Personal Income and Levels of Reported Well-being

The pattern is largely similar for household income as shown in Figure 8 below; respondents in households earning RM5,000 and below monthly report slightly higher levels of anxiety and stress compared to respondents in higher earning households. However, the difference in depression levels across income bands is more unclear.

Figure 8: Gross Household Income and Levels of Reported Well-being

Conclusion

From a simple descriptive analysis perspective, employment status appears to be driving differences in mental health levels. The unemployed appear to be particularly vulnerable compared to other employment groups, though reported mental well-being levels for part-time employees are also notably concerning. With respect to income, respondents earning less than RM 5,000 in both personal and household incomes appear to be more affected in mental well-being relative to other income groups.

The next and final instalment of this research series will delve into the results of our regression analysis which aims to identify the biggest predictors of mental health captured by our study. In the meantime however, it is worthwhile asking whether the country is sufficiently addressing the most economically vulnerable groups, particularly those who have been retrenched during the pandemic. 

Over the past year, the government has attempted to address these issues through the PENJANA stimulus package, amongst others. However, we may need more sustained policy measures for those facing a longer employment recovery period than others. Policy measures such as redesigning existing skilling platforms, as argued in our research article published last year, is a necessary step to help those looking for better opportunities in difficult times. This involves making these platforms easier to navigate, and to be more sensitive towards the individual’s relevant interests and needs.

Alongside skilling platforms, there should also be more collaboration between the government and civil society to provide career counselling programmes that concurrently addresses the mental well-being needs of affected individuals.

A recap of this multi-part research series on living with the pandemic, its mental health effects and the policy implications will be presented in the next and final instalment – stay tuned.

If you are experiencing emotional or mental health difficulties, get support and help on these hotlines: Mercy Malaysia and the Ministry of Health Crisis Preparedness and Response Centre’s psychosocial support hotline at 03-29359935. Ministry of Women and Family Development’s Talian Kasih hotline at 15999 or WhatsApp 019-2615999.

The Case for A Fair Work Act, Part 1

Even before the COVID-19 pandemic, rapid digital transformation and new business models had been changing the nature of work across the globe. More and more informal jobs were being created, characterised by one-off tasks, work-hour flexibility and low barriers of entry. In Malaysia, these jobs include but are not limited to ‘gigs’ on platforms such as Grab, Foodpanda and GoGet, to name a few.

The rise of these jobs has yet to be reflected in official employment statistics. In Malaysia, being an ‘employee’ as reported by DOSM is still the largest and most stable employment status, hovering at around 75% of the total workforce over the last 20 years (Figure 1).


Figure 1: Employment Status* Trend, 1999 to 2019

*DOSM Employment Status definitions:

Employee – A person who works for a private employer and receives regular remuneration in wages, salary, commission, tips or payment in kind. 

Own-account worker – A person who operates his own farm, business, or trade without employing any paid workers in the conduct of his farm, trade or business. 

Unpaid family worker – A person who works without pay or wages on a farm, business or trade operated by another member of the family.

Employer – A person who operates a business, plantation or other trade and employs one or more workers to help him.


These statistics mask two significant issues regarding employment in Malaysia. The first issue is the unclear extent of informal employment. At a quick glance, the above classification could give the impression that the majority of the workforce is in formal full-time employment.

The fact is, an unknown or unpublished proportion of the ‘employees’ above are informal workers, i.e. a person who works for a private employer, receives some form of remuneration, but is likely not covered by any contract, social protection schemes, benefits or employee rights. Informal worker estimates have to rely on rough proxies – approximately 62% of the workforce if we go by EPF coverage.

The second issue obscured by employment statistics is the changing nature of informal work itself. There have been increasing examples of informalisation occurring in Malaysia, from the growth of gig platform work, to the growth of remote digital work, to the shift from open-ended employment contracts to temporary or project-based contracts. According to Malaysia’s 2021 Economic Outlook Review, this purported ‘gig economy’ is a new growth area. However, whether these workers are micro-entrepreneurs or a new type of informal worker has yet to be settled or even discussed adequately.

What Does The ‘Gig Economy’ Mean?

Food delivery riders and e-hailing drivers are among the jobs most frequently associated with the term gig work. What about AirBNB hosts? Freelancers who sell their services on Fiverr or Upwork? Taking it further, are farmers and fishermen who sell their produce online gig workers too?

Why is this important? The terms ‘gig economy’ and ‘gig worker’ as used in speeches, media and even policy documents today have come to cover an unwieldy range of job types and most importantly, very different employment relationships. While we agree that there is a need to address issues faced by gig workers, we also hold that policymakers first need to clarify who they are.

We also argue that in the effort of clarifying who they are, current concepts and frameworks related to employment status are in need of major updating.

What makes a so-called gig worker different from older terms for informal employees, whether ‘firm-based’ terms (e.g. self-employed, freelancer, microentrepreneur, solopreneur) or ‘worker-based’ terms (e.g. temporary or casual workers)? We posit that the difference is in the power relationship between the worker and the employer* or employment vehicle. In fact, we argue that the power relationship between the worker and any employment vehicle or entity should be a core criteria in designing new worker legislation and policies.

*Note: From this point, ‘employer’ is used as a broad shorthand (and not a legal term), representing the party that either employs the worker or is the intermediary for the supply of jobs.

Employment power relationships is the key

The power relationship between employer and worker is comprised of the degree of control exercised by the employer over working conditions as well as the worker’s degree of dependency on the employer for survival or livelihood. This framework was proposed in a July 2020 paper by the UCL Institute for Innovation and Public Purpose as a way to understand today’s employment power relationships and as a framework to classify employment status (Figure 2).


Figure 2: Employment Power Relationship Framework

Source: UCL Institute for Innovation and Public Purpose.

Workers who face a high degree of employer control over many key job aspects (such as working hours, maximum take-home pay and reporting) and who relies greatly on the employer (for example for the bulk of take-home pay) is effectively an employee, regardless of whether there is a formal agreement.

Conversely, workers who face little or no employer control over their job and who are not tied to a single employer for the bulk of their earned income, are effectively independent contractors.

It is the workers who fall between these two categories of ‘employee’ and ‘independent contractor’ that present the greatest policy challenge today. Termed ‘reliant’ or ‘dependent’ contractors by the UCL researchers, the power relationship experienced by these workers are not depicted nor understood very clearly today, which can lead to inappropriate labelling or categorisation.

Viewing employment status through the lens of power relationships means that the way we categorise workers needs to go deeper than numbers of hours worked, type of contract or occupational definitions. Workers who perform the same job activity may not necessarily have the same employment status as there could be different levels of control and dependence governing the job. 

Take the example of delivery riders. Those who are hired by a courier company that imposes strict conditions on working hours, notice period, freedom to be employed elsewhere, and other job parameters which restrict autonomy and the capacity to diversify income should really be classified as ‘employees’ due to the degree of control and reliance present.

Delivery riders who get jobs by directly offering their services to customers, be it by advertising on physical posters or a Facebook page, are essentially ‘independent contractors’ with high control over most facets of their work. On the other hand, delivery riders who get jobs via a gig platform company that control certain but not all aspects of the job such as task allocation, access to the end customer, attire and others, are arguably better described as ‘dependent contractors’.

Applying the power relationship lens to jobs that are commonly associated with the ‘gig economy’ today shows the wide range of power relationships possible for the same job activity (Figure 3).


Figure 3: Typical ‘Gig’ Jobs vs. Possible Employment Status (Illustration)

Knowing the job’s underlying power relationship is important because different power relationships produce different worker needs and issues. Understanding power relationships is also crucial in deciding the split of responsibility between the worker, the employer and the government.

For full-time employees, it is clear that the employer needs to ensure enrolment and contributions into social protection schemes, but what about for dependent contractors? Should the onus really be on the worker as is the case for independent contractors?

This question of what is a fair level of workers’ rights and benefits in exchange for a degree of control (and who provides them) is why we are advocating for a back-to-first-principles conversation about employment status and ultimately, the promulgation of a Fair Work Act.

From power relationships to Fair Work

Why a ‘Fair Work Act’ and not a ‘Gig Worker Act’ as is reportedly being contemplated by the government? Above, we argued for the need to first understand the major power relationships of today’s employment landscape. The second major argument for a broader ‘Fair Work Act’ is the adequacy of current legislation. Can Malaysia’s current laws adequately express what are fair conditions for the different employment power relationships prevalent today? In our view, not without significant modification.

Firstly, the two worker classifications in existence today are insufficient. Today, you are either a formal employee (full-time or part-time*) governed by the Employment Act 1955 and other related legislation or a contractor reliant on the Self-Employed Employment Act 2017 and the Contracts Act 1950 (Figure 4). There is yet a classification that captures the distinct power relationship of a third but growing class of workers i.e. dependent contractors.

*Note: Although current laws and regulations do cover part-time employees, the designation is difficult to enforce in practice.


Figure 4: Current Laws Applicable To Malaysian Workers

Secondly, the premise of employment status and legislation today hinges too much on formalisation, i.e. whether one has a contract of employment or is registered as self-employed. Having an understanding of employment status based on a test of employer control and worker dependence would be a truer way of classifying workers rather than whether or not an employment contract exists (Figure 5).


Figure 5: Definition Of ‘Employee’ Comparison

Malaysia should take care to avoid major classification pitfalls. By applying the lens of power relationships to employment classification, we can have a more grounded and structured understanding of the range of employment status today. More importantly, with a clear understanding of the different power relationships underlying key employment classes, we can also have a more honest discussion of what is fairly owed to different types of workers by employers vs. the government.

Which brings us to the next question, namely what are fair work conditions for they key categories of employment power relationships? As a reference, we looked to the Oxford Internet Institute’s Fair Work Initiative which outlines five core principles of fair work: fair pay, fair working conditions, fair contracts, fair management and fair representation (Figure 6).


Figure 6: Fair Work Principles

Adapted from the Fair Work Initiative, The Oxford Internet Institute.

Putting together fair work principles and the power relationship framework enables policymakers to prescribe employment regulations best suited to the characteristics of each employment classification. What are minimum ‘fair work’ provisions owed to employees, whether formal or informal? What are minimum ‘fair work’ provisions owed to independent contractors vs. dependent contractors? 

In subsequent instalments of this research series, we will propose examples of what fair work principles could look like for the three major employment classifications we’ve proposed namely, employee, independent contractor and dependent contractor.

Updated laws need updated policy frameworks

At the time of writing, countries including France, Spain, and the Netherlands have reclassified some informal gig workers as employees. However, the grounds for classification are not the same across these jurisdictions – the judgements very much depend on local definitions of ‘employee’, ‘contractor’ and ‘gig worker’, amongst other factors. In some cases, having overly broad definitions for ‘gig worker’ led to unanticipated consequences; in the case of California for example, many freelancers lost their job after the passing of AB 5, as their ‘employers’ could not afford to reclassify them as employees as mandated by the new law (which has since been overturned).

Malaysia should heed and extract the right lessons from these court rulings. The key policy decision is not whether to formalise workers or whether to have specific gig worker legislation. Rather, it is to clarify how we’re thinking about employment classification, in ways that capture the evolving dynamics of employment in Malaysia. Only in this way can we adequately fix or bridge the gaps in our current laws to ensure fair work for workers today and to address those left behind.

The landmark UK Supreme Court ruling on Uber in February this year provides an instructive example of employment classification based on (i) power relationships and (ii) transcending the employee-vs.-independent contractor dichotomy.

Following a suit brought by a group of ex-Uber e-hailers, the UK Supreme Court ruled to reclassify a group of 40,000 Uber UK drivers as “workers” entitled to minimum wage, holiday pay and other benefits, due to the management practices imposed on the workers at the time, such as inability to negotiate fares and access job details before they accept the job. Two aspects of this ruling should be noted:

(i) The importance of underlying power relationships. The ruling applied only to a specific group of Uber e-hailing drivers who worked with Uber before 2016 which experienced company policies resulting in lower job autonomy compared to later groups of Uber drivers.

(ii) A ‘third’ classification. The ruling classified the affected e-hailing drivers as ‘workers’, a designation that reflects a higher degree of flexibility relative to ‘employees’. Nevertheless, this designation still comes with its set of rights and benefits as articulated by the UK’s labour laws.

How do we define fair pay for each employment classification? Stay tuned for the next instalment of this research series.

A Year Of Living Under COVID-19

In Part 1 of our COVID-19 and well-being study published on 4 March 2021, we found that more than half of surveyed respondents reported experiencing worsened mental well-being over the past year. Women and people under 35 years old were the most impacted by negative mental health within this period, a finding in line with global studies. Part 1 also showed a clear relationship between physical and mental well-being; those who reported worsened mental well-being over the past year were more likely to also report worsened physical well-being.

In this Part 2 of the research series, we explore the impact of the ‘new normal’ living conditions on mental health. In particular, we found that the number of people you live with and the frequency of working from home have a significant effect on a person’s mental health.

Note: Respondents’ mental health or well-being was measured against their responses to the DASS-21 questionnaire. For more details on how the DASS-21 questionnaire was applied, as well as the study’s overall methodology, please refer to Part 1.

Living Alone and Mental Well-being

Overall, respondents living alone experienced worse mental well-being compared to those who live with others (Figure 1). A high proportion, 78%, of those who live alone reported levels of depression compared to 52%-60% of those who live with others. In terms of severity, 38% of those living alone reported severe and extremely severe depression compared to a lower 23%-28% of those living with others.

The pattern is similar for stress; 60% of those living alone self-reported varying levels of stress compared to 32%-46% of those who live with others. In terms of severity, 28% of respondents living alone experienced severe and extremely severe stress compared to 13%-20% of those living with others.

Notably, this pattern is slightly different for anxiety. In terms of overall incidence, respondents who live alone do not appear to show significantly higher levels of anxiety compared to respondents who live with others. In terms of severity, however, respondents who live alone do show higher levels of severe and extremely severe anxiety at 44%, compared to 24%-33% of those who live with others.

Figure 1: Number of People in Household and Mental Well-being

These findings are consistent with global studies that have found correlations between living alone and psychological distress. The American Psychological Association (APA) attributes this to social isolation, which has been found to have very real health implications such as the increased risk of heart disease and amplified depression.

It is important to note that living alone does not necessarily mean one would experience loneliness or social isolation, but it may present greater mental health risks for certain groups. In sociologist Eric Klinenberg’s study of social isolation and the impact on public health, he found that demographic groups such as men, the elderly, and low-income communities who live alone are more at risk of feeling isolation or loneliness.

Work from Home Frequency and Well-being

When the Movement Control Order (MCO) started last year, the government reported that 33.5% of Malaysian workers began working from home. This change in working mode for many Malaysians has evidently had an effect on workers’ mental well-being (Figure 2). Respondents to our study who work from home every day reported higher depression and stress scores compared to those who work less days from home or who do not work from home at all.

64% of respondents who work from home every day reported levels of depression compared to 53%-55% of those who work from home less frequently or not at all. In terms of severity, 30% of respondents who work from home daily reported severe and extremely severe depression compared to 20%-26% of respondents who work from home less frequently or not at all.

The pattern is similar for stress where 50% of those who work from home every day reported levels of stress compared to 35%-38% of respondents who work from home less frequently or not at all. In terms of severity, however, the differences in severe stress levels between respondents who work from home daily compared to those who work from home less frequently are less marked.

The differences in incidences of anxiety, between those who work from home daily compared to those who work from home less frequently or not at all, is marginal. As with the findings on living alone and anxiety outlined above, similarly here, anxiety is potentially driven more by factors other than working from home arrangements.

Figure 2: Work From Home Frequency and Mental Well-Being

What are the challenges of working from home every day? Singaporean psychologist Jeanette Lim shared that during the COVID-19 pandemic, there was an observable trend of mental health issues stemming from overworking and isolation as a result of working from home. Although working from home may be preferred by some workers, the mental health effects of working from home will need to be a key consideration as companies and the government weigh on policies allowing for flexible working arrangements post-pandemic.

Policy Considerations

The findings above point to the effects of social isolation on Malaysians’ mental health over the past year, as represented by the depression and stress levels of those living alone and those working from home on a daily basis. While other factors also contribute to one’s mental health, the importance of social interaction in daily life may be under-estimated relative to more visible factors, like employment or income changes.

In recent years, mental health in general has been widely discussed by the government, mental health NGOs and public figures. However, in order to address the particular mental health effects of the past year under COVID-19, there should be more awareness amongst policymakers and the general public around specific and unseen risks such as social isolation. Initiatives such as public campaigns could inform the public on ways to deal with social isolation, such as reminding individuals who live alone to keep in touch with their loved ones or to seek social interactions in their communities, while abiding to pandemic-related SOPs.

Public health campaigns should also extend to companies to educate them on the challenges of working from home daily. While companies could endorse flexible working arrangements, further support should be given, for example by instituting policies or practices that support regular checks and maintenance of employee well-being.

Apart from public and corporate awareness on social isolation, there should also be more physical spaces that promote being outside and enable safe social interactions. In an editorial published last year, we discussed a rethinking of urban spaces to accommodate for mental well-being, particularly pro-social spaces such as neighbourhood futsal courts that improve the physical lifestyles and relationships in the communities they are built in.


In the final and third part of our study, we will present our findings on how COVID-19’s impact on the financial and employment situations of many Malaysians has affected their mental well-being.

If you are experiencing emotional or mental health difficulties, get support and help on these hotlines: Mercy Malaysia and the Ministry of Health Crisis Preparedness and Response Centre’s psychosocial support hotline at 03-29359935. Ministry of Women and Family Development’s Talian Kasih hotline at 15999 or WhatsApp 019-2615999.