Job insecurity rises in ASEAN despite economic recovery
Survey finds GDP growth failing to boost labour markets
- We found 22.8 per cent of Asean respondents feared losing their jobs in the next six months, a 2.3 point increase since our last survey of employment sentiment in 2015.
- Asean jobseekers also said it was harder to find a job this year than in 2015.
- Malaysian respondents had the weakest salary expectations.
An FTCR survey in the first quarter of 2017 suggests job insecurity has risen in Asean, despite economic recovery in some regions. We polled 5,000 people across five Asean economies and found 22.8 per cent of respondents expressed concern about their job security over the coming six months, up 2.5 percentage points on our survey at the end of 2015 (see chart).
In some regional markets, the unemployment rate rose during the past two years despite a recovery in gross domestic product growth, highlighting that this has yet to translate into greater job creation.
In Malaysia, for example, 35.1 per cent of respondents said they were worried about their jobs - the highest proportion among the five economies surveyed. The Malaysian unemployment rate was stuck at 3.5 per cent even though GDP growth rose to 4.5 per cent year-on-year in the fourth quarter of 2016, up from 4 per cent in the second quarter. In December 2014, when growth began to slow, the unemployment rate was just 3 per cent.
Filipinos were the exception to the region-wide pessimism: the share rating their job status in the next six months as either insecure or very insecure fell 3.2 percentage points between 2015 and 2017. Everywhere else in Asean, this figure rose between 1.8 and 5.1 percentage points.
Malaysians least positive about new jobs and pay rises
Greater insecurity was coupled with a rise in the perceived difficulty of finding a new job. The share of Asean job seekers saying they were having difficulty rose 4.5 percentage points to 59.6 per cent (see chart). Malaysians were again the most negative: 74.5 per cent of job seekers said it was difficult to find new employment, up from 66.2 per cent at the end of 2015 and far higher than Indonesians (59.7 per cent), Thais (59.5 per cent), Vietnamese (49.6 per cent) and Filipinos (48 per cent).
Given concerns over their employment status and the perceived difficulty in obtaining a new job, it is no surprise that Malaysians had the weakest pay rise expectations. In our survey, 67.9 per cent of respondents across the region expected a pay rise this year, but only 57.5 per cent of Malaysians expected one, with just 10.6 per cent forecasting a pay rise of more than 10 per cent (see chart). Furthermore, 34.9 per cent of Malaysians thought their wages would remain unchanged, versus 24.2 per cent across the Asean 5.
Malaysians' wages have grown in line with their neighbours' in the recent past. The latest data from the International Labour Organisation show that average wages in Malaysia increased 5.4 per cent in 2015 in annual terms, the same as in Vietnam and only slightly less than in the Philippines (5.5 per cent) and Indonesia (6 per cent). Thai workers, however, received a rise of just 1.8 per cent in 2015. Malaysian workers already earn the highest wages in the group of five countries, more than double the regional average (see chart).
But our survey highlights the risk that Malaysian wage growth may fall below the regional average in 2017.
This article was first published on Apr. 26 by FT Confidential Research.
FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and Southeast Asia. A team of researchers in these key markets combine findings from proprietary surveys with on-the-ground research to provide predictive analysis for investors.