THE government continues to paint a picture of a resilient economy after announcing that Malaysia’s Gross Domestic Product (GDP) grew by 5.8% year-on-year in the second quarter of 2026, following a revised 5.4% growth in the first quarter.
However, growth is less meaningful if many households still face retrenchment.
According to the latest Loss of Employment (LOE) report under PERKESO’s Employment Insurance System (EIS), 52,607 workers had applied for unemployment benefits as of July 16 this year.
This is an alarming figure and is reportedly the second-highest wave of job losses since the massive retrenchments during the COVID-19 pandemic.
What is even more concerning is that nearly six in 10 unemployment benefit applications came from Kuala Lumpur and Selangor with 15,893 cases (30%) and 15,228 cases (29%), respectively. These are the very states that the government frequently highlights as Malaysia’s most developed economic centres.
If workers in these economic hubs are being retrenched at such an alarming rate, it raises serious questions about the government’s claim that the labour market remains healthy.
While the government maintains that employment conditions remain stable, the reality of thousands of Malaysians tells a different story.
We must ask whether the government’s employment initiatives, including various career fairs, are truly delivering meaningful job placements or merely creating positive headlines without addressing the root causes of unemployment.
First, introduce targeted wage subsidies and hiring incentives for companies that recruit fresh graduates, retrenched workers and long-term job seekers into permanent positions instead of short-term contracts.
Second, provide tax incentives and employment grants for SMEs and local businesses that prioritise hiring Malaysians while reviewing the dependence on foreign labour in sectors where local labour supply is sufficient.
Third, strengthen industry-driven upskilling and reskilling programmes by working closely with employers to ensure that training matches current market demands, particularly in digital, advanced manufacturing and high-value industries.
Fourth, conduct a transparent review of all government-funded employment programmes and career fairs by publishing job placement outcomes, retention rates and employer participation to ensure public funds produce measurable employment results.
Unemployment is not merely an economic statistic. It weakens household income, suppresses consumer spending and threatens long-term economic confidence.
The government cannot continue celebrating GDP growth while ignoring the growing number of Malaysians facing retrenchment and employment insecurity.
It is time for decisive leadership and policies that place Malaysian workers at the centre of the nation’s economic agenda.
DATUK DR MONNA ONG SIEW SIEW
MCA Public Policy and People’s Livelihood Research Advisory Committee chairperson
and MCA Terengganu State Liaison Committee chairperson
