Arya News - Experts say the gap, if left unchecked, could widen income inequality and make it harder for people in this age group, many of whom are recent graduates, to build wealth over their lifetime.
PETALING JAYA – Young workers aged between 25-29 are still earning less than they did before the pandemic, with median monthly salaries yet to recover to 2019 levels.
Experts say the gap, if left unchecked, could widen income inequality and make it harder for people in this age group, many of whom are recent graduates, to build wealth over their lifetime.
According to figures from the Department of Statistics Malaysia (DOSM), the median monthly salary of workers aged 25-29 was RM2,095 in 2024, down 5% from the pre-pandemic level of RM2,206 in 2019.
Of all age groups, 25-29 was the only one where median salaries in 2024 remained below pre-pandemic 2019 levels.
SOURCE: DEPARTMENT OF STATISTICS MALAYSIA
SOURCE: DEPARTMENT OF STATISTICS MALAYSIA
Bank Negara Malaysia (BNM) data, meanwhile, show that the real starting salary of diploma graduates fell, from RM1,458 in 2010 to RM1,376 in 2018, after adjusting for inflation.
Last month, BNM deputy governor Datuk Marzunisham Omar said the country was seeing wage compression, with starting salaries of qualified professionals remaining close to the minimum wage.
Speaking at the BNM Sasana Symposium 2026, he said that statistically, Malaysia still did not have sufficient high-skilled jobs.
Marzunisham said high-skilled underemployment remained high, with about 35-36% of workers employed in jobs requiring qualifications lower than what they possess.
The government has taken various steps to address the problem.
They include raising the minimum wage to RM1,700 last year and introducing the Progressive Wage Policy in 2024.
Experts said more needs to be done.
Head of the Laboratory of Social Gerontology at the Malaysian Research Institute on Ageing (MyAgeing), Dr Wan Arnidawati Wan Abdullah, said low starting salaries could have long-term effects by widening wealth inequality across generations.
“Starting salaries for graduates currently range between RM2,000 and RM3,000, but more importantly, the real value of starting salaries has declined,” she said.
SOURCE: DEPARTMENT OF STATISTICS MALAYSIA
She said entering the workforce at a lower starting salary could make it harder for workers to catch up, as future increments are often calculated as a percentage of existing wages.
The impact extends beyond income, she added, particularly in terms of home ownership.
“While older generations were able to build wealth by purchasing homes, many young workers today spend a significant share of their income on rent without accumulating assets.
“Malaysia’s house price-to-income ratio is around 4.7, well above the affordability benchmark of 3.0, meaning housing has remained seriously unaffordable for several years.”
She said many workers now aged 35-44 bought properties before the sharpest increases in house prices.
“Young people entering the workforce today may not have the same opportunity,” she said.
To better support young workers, Wan Arnidawati said employers should look beyond traditional promotions by offering skills-based salary progression, professional development opportunities and alternative career pathways.
Universiti Malaya economist Prof Dr Mohd Nazari Ismail said the way forward was to help companies generate higher revenues, including by expanding their markets overseas, which could give employers greater capacity to raise wages.
“However, one must not think that increasing salary will solve the cost-of-living problem in this country,” he said, stressing that prices of goods and services must not rise faster than salaries or workers would be “back to square one”.
He said slow wage growth was not unique to Malaysia but was a problem seen in many other countries, amid rising prices and debt pressures on employers.
HELP University economics expert Prof Dr Chung Tin Fah said young workers may need to look beyond traditional employment and develop entrepreneurship skills to overcome slower wage growth.
“Under the life-cycle hypothesis of earnings, workers’ wages generally rise with age and experience, reaching a peak around 40 to 45 before declining.
“In the public sector, however, earnings may peak later, at around 50 or beyond, due to the impact of seniority. This creates a persistent income gap between younger and older workers,” he said.
He added that several factors could constrain wage growth among younger employees, such as limited work experience, insufficient technical skills, a willingness to work additional hours and a lack of awareness of opportunities.
“Entrepreneurship can therefore provide younger workers with an alternative way to increase their income while capitalising on innovation,” he said.
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