Graduate Underemployment: Nine States, Not Sixteen

Skill-related underemployment (SRU) counts tertiary-educated workers stuck in semi-skilled or low-skilled jobs. Nationally, it’s a big number: 2.05 million people, or 35.6% of employed graduates, as of DOSM’s Annual Statistics of the Labour Force, Malaysia, 2025.

That report also breaks the rate down by state — but only for nine of Malaysia’s sixteen states and federal territories. Here’s what it named.

data = FileAttachment("data/clean.csv").csv({typed: true})

Plot.plot({
  marginLeft: 170,
  width: 700,
  height: 320,
  x: {
    label: "Skill-related underemployment rate (%)",
    grid: true,
    domain: [0, 55]
  },
  y: {label: null},
  color: {
    domain: ["below", "above"],
    range: ["#14264A", "#C1401C"],
    legend: false
  },
  marks: [
    Plot.barX(data, {
      x: "sru_rate",
      y: "state",
      fill: "category",
      sort: {y: "x"}
    }),
    Plot.ruleX([35.6], {
      stroke: "#DAC097",
      strokeWidth: 2,
      strokeDasharray: "4,3"
    }),
    Plot.text(data, {
      x: "sru_rate",
      y: "state",
      text: (d) => `${d.sru_rate}%`,
      dx: 8,
      textAnchor: "start",
      fontFamily: "IBM Plex Mono",
      fontSize: 11
    }),
    Plot.text([{x: 35.6}], {
      x: "x",
      y: 0,
      text: ["National average — 35.6%"],
      dy: -14,
      frameAnchor: "top",
      fontFamily: "IBM Plex Mono",
      fontSize: 11,
      fill: "#14264A"
    })
  ]
})

Kelantan, Terengganu, and Pahang sit well above the national line. W.P. Kuala Lumpur, W.P. Putrajaya, and Pulau Pinang sit well below it. Selangor and Perak — often grouped with the low-SRU cluster given their industrial base — land almost exactly on the national average, tied at 34.6%.

The pattern maps onto something the labour market keeps producing. Malaysia isn’t struggling to create jobs. Unemployment is near a ten-year low and labour force participation is at record levels. What’s straining is job quality: enough high-skill positions to absorb a fast-growing pool of tertiary graduates. States with more diversified, urban, service- and industry-heavy economies tend to generate more of that kind of work; states still weighted toward agriculture, fishing, and public-sector employment tend to generate less of it.

A second source, and a discrepancy worth keeping

DOSM’s annual release isn’t the only place these numbers surface. A month before it was published, the World Bank’s Malaysia Economic Monitor (April 2026) covered the same ground in more depth, and named a few states DOSM’s release left out: Perlis was grouped with Terengganu and Pahang at around 40%; Johor and Negeri Sembilan were described as having lower SRU alongside stronger wage growth; and Sabah and Selangor were both flagged as combining high SRU with weak or falling wages.

That last pairing doesn’t sit well with the chart above. DOSM’s own figure puts Selangor at 34.6% comfortably below the national average, in the low cluster. The World Bank’s characterization puts it in the opposite group. We don’t know why the two accounts diverge; different reference periods and different definitions of “high” (relative to wage trends rather than the national threshold) are both plausible, but neither is confirmed here. Rather than pick one telling over the other, it’s worth naming the conflict and leaving Selangor’s status open rather than resolved.

What’s worth taking from this

The more concrete number, and arguably the more useful one, isn’t about states at all: the World Bank’s analysis finds that tertiary-educated workers stuck in below-skill jobs earn roughly half what skill-matched peers earn. Wherever a graduate lands, be it Kelantan or Kuala Lumpur, skill-related underemployment isn’t just a title mismatch. It’s a pay cut.

It’s also worth naming what this piece has in common with the rest of the site so far: youth unemployment, the gender gap in graduate outcomes, and now this: three different angles on the same underlying strain, Malaysia producing tertiary graduates faster than it produces the jobs to match them.

Why not a map?

A choropleth needs a value for every one of Malaysia’s 16 states and federal territories. DOSM’s 2025 annual report named only nine of them: the six lowest and three highest skill-related underemployment rates. Absent from the list: Johor, Kedah, Melaka, Sabah, Sarawak, Perlis, and W.P. Labuan.

That’s not the same as saying those states weren’t measured. The Labour Force Survey samples all 16 states every quarter, and skill-related underemployment is calculated for each of them — DOSM simply didn’t publish the full breakdown in this particular release, likely because a six-lowest/three-highest framing made for a tighter press narrative. A map with seven states shaded grey would read as “no data here,” when the more accurate story is “DOSM didn’t say.” So this piece sticks to the nine numbers actually on the record, as a chart rather than a map. If DOSM publishes the full state table in a future release, this comparison is worth revisiting as one.

Sources:

Department of Statistics Malaysia, Annual Statistics of the Labour Force, Malaysia, 2025 (media statement, released 26 June 2026).
World Bank, Malaysia Economic Monitor, April 2026: Raising the Ceiling, Raising the Floor — The Jobs Agenda as a Productivity Agenda.