Gig economy should be temporary income source, says Economy Minister

PUTRAJAYA: Economy Minister Akmal Nasrullah Mohd Nasir asserts that the gig economy should be perceived as a short-term income source, not a long-term solution to employment and wage issues, according to a report by Berita Harian. While gig work enables individuals to earn a living, particularly for those struggling to find stable jobs, Nasir warns that excessive dependence on such work may not provide income security, skill enhancement, or clear career paths.

He emphasizes that evaluating the gig economy's success should consider not only the volume of participants but also their sustained stay, earnings, social protection, and potential to transition into more stable positions. Nasir highlights that while the gig economy can provide immediate income, it should not become a dead-end for young people and workers aiming to enhance their living standards.

He stresses that Malaysia needs to generate high-quality jobs that facilitate skill development and income growth, rather than solely focusing on raising minimum wages or setting regulations. The government should also invest in sectors with the potential to create high-value jobs, such as agriculture, agri-food, halal, and manufacturing, by leveraging technology and digitalization.

Nasir stresses the importance of increasing productivity, which must be accompanied by wage growth to prevent a situation where economic gains translate into higher incomes. He underscores that the ultimate goal is to create jobs that do not merely reduce unemployment but provide decent incomes and promising career prospects. Despite Malaysia's labor market showing strength with a low unemployment rate of 3.0% in the second quarter of 2026, challenges remain in terms of skills mismatches, job quality, and labor productivity growth.

The Department of Statistics Malaysia (DOSM) reports that skills-related underemployment among tertiary-educated workers remains high at 35.2%. The economy grew by 6.0% in the second quarter, but labor productivity increased by 4.9%. However, the number of new jobs created fell by 1.2% year-on-year to 31,500, indicating that economic and productivity growth alone are insufficient to address the type, skills, and quality of jobs being generated.

The policy challenge is to expand income opportunities through the gig economy while ensuring workers have access to skill enhancement, social protection, and jobs offering sustainable incomes and career advancement.