PUTRAJAYA (Nov 10): Malaysia continues to enjoy decade-low unemployment at 3%, but a large portion of its educated workforce — over one-third — is stuck in jobs that don’t match their qualifications.

In the third quarter of 2025 (3Q2025), skill-related underemployment — graduates and diploma holders in low- or semi-skilled jobs — rose slightly to 1.96 million, making up about 35.5% of employed degree and diploma holders, according to the Department of Statistics Malaysia’s latest 3Q labour force report.

The number of unemployed fell 0.2% to 519,900 as Malaysia’s labour force grew 0.7% to 17.49 million in 3Q2025.

Employed persons rose 0.7% to 16.97 million, with the labour force participation rate slightly up to 70.9%.

Time-related underemployment — workers wanting more than 30 hours per week hours — fell 5.5% to 133,300.

Among states, Putrajaya had the lowest unemployment (1.4%), followed by Pahang (1.7%) and Selangor (1.8%). Selangor also led in labour force participation (78.2%), followed by Putrajaya (77.8%) and Kuala Lumpur (75.6%).

Employment rose across all major sectors in September, especially in services — wholesale and retail trade, accommodation and food & beverage services, as well as information and communication activities. Manufacturing, construction, mining and agriculture also saw increases in employment.

Youth unemployment fell slightly to 10.1% for ages 15-24 while the rate for ages 15-30 remained steady at 6.2%.