Malaysia continues to benefit from historically low unemployment, holding steady at 3%, a decade-low level.

However, a significant challenge persists as a substantial portion of the country’s educated workforce is employed in roles that do not align with their qualifications.

In Q3, skill-related underemployment, defined as graduates and diploma holders working in low- or semi-skilled positions, edged up slightly to 1.96 million.

This represents around 35.5% of all employed degree and diploma holders, according to the latest labour force report for the third quarter from the Department of Statistics Malaysia (DOSM).

The number of unemployed Malaysians declined by 0.2% to 519,900 in Q3, as the total labour force expanded by 0.7% to 17.49 million, The Edge Malaysia reports.

Employment rose in tandem, increasing 0.7% to 16.97 million, while the labour force participation rate edged up to 70.9%.

Meanwhile, time-related underemployment, those seeking more than 30 working hours per week, dropped 5.5% to 133,300.

Putrajaya recorded the lowest unemployment rate at 1.4%, followed by Pahang at 1.7% and Selangor at 1.8%. Selangor also topped the chart for labour force participation at 78.2%, with Putrajaya close behind at 77.8% and Kuala Lumpur at 75.6%.

Furthermore, employment increased across all major sectors in September, with the strongest gains seen in services, particularly in wholesale and retail trade, accommodation and food & beverage services, and information and communications.

The manufacturing, construction, mining, and agriculture sectors likewise registered higher employment levels.

Whereas youth unemployment edged down to 10.1% for those aged 15-24, while the jobless rate for the broader 15-30 age group held steady at 6.2%.