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KUALA LUMPUR: Malaysia’s most common occupations, the sales and service workforce, face increased risk of automation in light of technological advancement, according to a report from the Khazanah Research Institute (KRI).
The report, titled Working in an Evolving Malaysia: The State of Households 2020 Part II, said this was concerning, as sales and services provided 22.6% of total employment in 2019.
Additionally, in KRI’s School-to-Work Transition Survey (SWTS) database, 48.7% of surveyed full-time youth ages 15-29 had jobs with high risk of automation.
Occupants of jobs at higher risk of automation tend to earn lower incomes (RM1,500 median monthly income) and are more likely to be non-graduates (only 7% with a higher bachelor’s degree).
This implies that low-income jobs that do not require high levels of education are more likely to be susceptible to automation.
The report also highlighted that most jobs with the highest risk of automation are also less likely to be able to work from home, making workers more vulnerable to the ongoing pandemic situation.
However, unavoidable lags in the adoption of modern technology provide opportunities for policy intervention to ensure that workers can benefit from and complement the technology, rather than being displaced, the report says.
On the contrary, jobs such as healthcare and teaching professionals are less likely to be replaced by technology.
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While skilled occupations still face the risk of automation, semi-skilled occupations are more likely to be automated.
The report also noted that earnings from paid employment remained the largest source of household income, although their share had steadily declined from 66.6% to 61.6% between 2012 and 2019.
Meanwhile, the share of family income from self-employment remained stable at around 17% during the same period, despite the increase in the number of self-employed workers in recent years.
In 2019, about 80% of family income came from paid and self-employment income.
Another key point from the report was that the central region (Kuala Lumpur, Selangor, and Putrajaya) continues to have higher labor force participation rates, especially among women, and lower unemployment rates than other states.
The central region’s concentration of higher paid economic activities, skilled and educated workers explains its higher wages and higher family income levels compared to other states or regions.
Meanwhile, the demand for skilled workers may be dampened by the slowdown in the accumulation of tangible capital in recent years, as well as the lack of investment of intangible capital, such as research and development activities.
KRI President Tan Sri Nor Mohamed Yakcop noted that the unemployment rate in the country had risen to 5% in April and 5.3% in May 2020 (an estimated 770,000 people are unemployed).
“This far exceeded the average unemployment rate of 3% to 4% previously.
“Although it fell to 4.7% in August 2020, unemployment statistics may mask the real job market because some workers are forced to take part-time jobs even though they want full-time jobs.
“In addition, those who were self-employed have also lost their source of income,” he said yesterday in his speech before the online presentation of the KRI report to the media.
Nor Mohamed also pointed out that the participation rate of women in the labor force was also lower (55%) compared to men (88%). To address this, she suggested flexible work arrangements, greater involvement of husbands in childcare, and removal of policies that hinder women’s participation in the workforce.
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