At a coffeeshop recently, I discussed at length with a friend who had just graduated with a degree in economics from a local university about how hard is it to find a job as a fresh graduate these days.

Here’s what I can conclude from our discussion.

First, employers cannot cope with the rising cost of hiring, specifically with the minimum wage.

When employers pay higher minimum wages, they will have less to spend. Since employers have to pay more to their workers, the fewer jobs they can afford to provide.

Even if the employers are hiring, more experienced workers (high productivity) who are already paid above the minimum wage or machines will be hired at the expense of fresh graduates and low-skilled workers (low productivity).

Employers are already taking a risk (eg possibility of quitting job after a short time) when they hire fresh graduate with no work experience, why further discourage that by demanding a higher wage?

So it is understandable for employers to raise the hiring standards such as ‘must speak Mandarin’ or favour employed applicants who have three to four years work experience over fresh graduates.

If he or she can ask for a higher wage that is clearly unreasonable to employers, why can’t they, too, raise the hiring standards that are seen unfavourably to potential workers like him or her?

Instead of asking me why someone who has three years experience to be paid the same as a fresh graduate, he should ask why the employers seemingly can’t afford to hire fresh graduates in search of skills, learning opportunity and career building for lower wages these days?

Secondly, it is inaccurate to justify wages just by looking at the workload at small companies and big companies or how tough and costly it is to live in Kuching city.

For example, if rising cost of living in the city is the case, then the problem is not that these fresh graduates earn so little. It’s the things that they buy which cost them so much. So this will not be relevant to the determination of wages.

A wage is a price of labour, ultimately, valued by each employer in each uniquely different industry.

So to ask small companies to pay a little higher than big companies is actually asking the former to boost a little higher wages above the market price of labour in the industry as well as pricing out a few more fresh graduates and low-skilled workers, thus resulting in more inability to find employment.

If he or she still insists that companies should pay higher wages to fresh graduates, then I wonder, as a buyer and consumer himself or herself, whether he or she will buy goods and services to maximise his self-interest at the cheapest price?

Law of economics

The law of economics says that the buyers must buy the goods at the lowest price which is high enough to take them away from competing buyers who would otherwise obtain the goods.

If all valuable goods and services are bought and sold according to this law, why must he treat hiring workers differently?

Since there are so many unemployed graduates who sell their labour in a weak market today, why should he or she think his or her labour is worth more to employers than others?

Thirdly, he or she conveniently claims that businesses have become too greedy. If it’s true, as he or she claims, that businesses are making millions of profits off of their workers, then why is finding employment among fresh graduates an issue? Wouldn’t businesses become more and more eager to hire more workers especially fresh graduates; the source of swelling profits?

Asked differently, if he or she is willing to work hard and to be paid according to his or her value, then it is irrelevant to the wages he or she has to work for. Since he or she is willing to be valued by employers accordingly, then this quickly become clear that greedy employers are no longer relevant to determine his or her wage, correct?

MEDECCI LINEIL is with the Institute for Leadership and Development Studies (LEAD), a new think-tank established to promote alternative policies and nationhood practice based on the market system.