It would be challenging for other states to replicate Johor’s initiative of offering graduates salaries of RM4,000 and above, as many continue to depend on labour-intensive industries that create jobs but do not necessarily provide high wages, according to an economist.
Samirul Ariff Othman of Universiti Teknologi Petronas also said Malaysia continues to face a mismatch between employers’ needs and the skills possessed by graduates. He was responding to a former MP’s suggestion that other states should emulate Johor’s premium wage initiative.
Earlier this month, Johor menteri besar Onn Hafiz Ghazi said fresh graduates in the state could earn salaries of RM4,000 and above, while technical and vocational education and training (TVET) graduates could receive between RM4,000 and RM5,000 or more, depending on their qualifications and skills.
Productivity must support wage growth
Samirul said sustainable wage increases in other states would require businesses to improve productivity through technology, innovation and stronger management practices.
He added that talent development, TVET reform and industrial upgrading must progress together, noting that raising wages alone without improving productivity would only address part of the issue.
The economist also said establishing RM4,000 as a nationwide benchmark for graduate salaries would be difficult, as only large multinational companies in states such as Johor, Penang and Selangor may be able to support such starting pay.
He said many small and medium-sized enterprises in smaller states could struggle to do so without corresponding productivity gains.
States should build on their strengths
Samirul and Yeah Kim Leng of Sunway University agreed that other states could follow Johor’s wage approach only if they capitalise on their own competitive advantages.
Yeah said Penang could leverage its electronics sector, while Sarawak could focus on industries supported by its hydropower resources.
He also noted that Johor benefits from its proximity to Singapore and the involvement of both governments in attracting high-value investments and industries to the Johor-Singapore Special Economic Zone.
TVET graduates in demand
Yeah described Johor’s wage initiative as commendable, saying the state government must not only maintain an efficient and business-friendly environment but also attract high-value industries and dynamic companies capable of developing skilled talent.
Meanwhile, Samirul said TVET graduates could command salaries of RM4,000 to RM5,000 in selected industries because modern manufacturing increasingly requires technicians with specialised expertise.
He added that, in many cases, skilled technicians have become more difficult to recruit than degree holders, making it essential for TVET programmes to remain closely aligned with actual industry demand and evolving workforce needs.
