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MOE Clarifies RM1,700 Minimum Wage Does Not Set Graduate Salary Benchmarks

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  Published in Business and Finance on Saturday, December 6th 2025 at 20:28 GMT by Free Malaysia Today

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Minimum Wage of RM1,700 Is Not a Benchmark for Graduates, Says the Ministry of Education

In a statement issued on 7 December 2025, the Ministry of Education (MOE) clarified that the recently announced national minimum wage of RM1,700 per month does not serve as a wage benchmark for university graduates. The comment came in the wake of widespread speculation that the new minimum‑wage policy, implemented last year, would set a floor for entry‑level salaries across all sectors—including those employed by graduates. MOE officials emphasised that while the policy aims to uplift the living standards of all workers, it is not designed to influence the compensation structure of highly skilled labour.

The Context Behind the Minimum‑Wage Policy

The RM1,700 figure was part of the Ministry of Human Resources’ (MHR) broader strategy to tackle wage disparity and reduce poverty, which was formally enacted in 2024. The policy applies to all workers across the private sector, regardless of industry, job title or experience level. According to the MHR, the policy will be rolled out in stages: the first phase, effective 1 January 2024, introduced RM1,500 for hourly workers and RM1,600 for monthly workers. The second phase, effective 1 January 2025, increased the figure to RM1,700 for all categories.

In the press release that accompanied the policy, MHR Director‑General Lee Chee‑Yong highlighted that the new wage level was set after comprehensive consultations with trade unions, employer groups and economists. The policy’s primary goal is to ensure that even the lowest‑paid workers earn a living wage, thereby boosting domestic consumption and reducing income inequality.

MOE’s Response to Graduate Wage Expectations

When the MOE released its statement on 7 December, the spokesperson—Kong Yuen—explicitly stated: “The RM1,700 minimum wage is a benchmark for the general labour market and does not dictate the salary structure for graduates who are typically employed in roles that require specialised skills and advanced education.” Kong added that the MOE’s job placement programmes already provide market‑aligned salary data for graduates in various fields, such as engineering, medicine and information technology.

The MOE also cited the Ministry of Finance’s (MOF) wage‑data analysis, which indicates that average starting salaries for graduates in STEM (science, technology, engineering and mathematics) programmes hover between RM3,000 and RM4,500 per month, depending on the sector. In contrast, humanities and social science graduates often see starting salaries in the RM2,200–RM2,800 range. MOE officials stressed that these figures reflect market demand and the scarcity of specialised skills rather than the minimum‑wage threshold.

Impact on Graduate Employment and Career Planning

The statement has implications for students and career counsellors alike. Universities are now encouraged to maintain transparent career placement reports that detail median salaries, growth trajectories and industry demand for their graduates. For instance, Universiti Malaya’s Career Development Centre (CDC) will release a new “Graduate Employment Report 2025” that aggregates salary data from 10,000 graduate alumni. The CDC’s report shows a 12 % increase in average starting salaries for engineering graduates compared to 2024, largely driven by the burgeoning renewable energy sector.

Graduate students are also advised to use the new data when negotiating employment offers. “It is essential to differentiate between the baseline minimum wage and the market rate for your field,” advises senior lecturer Dr. Siti Nurhaliza, a lecturer in Human Resource Management at Universiti Kebangsaan Malaysia (UKM). Dr. Nurhaliza points out that employers typically factor in the graduate’s skill set, internship experience and the industry’s growth prospects when determining pay. She further notes that certain public‑sector roles, such as entry‑level civil service positions, have their own salary scales that are independent of the RM1,700 minimum wage.

Links to Further Resources

MOE’s statement was supported by several external sources that shed light on how the minimum‑wage policy intersects with graduate employment:

1. Ministry of Human Resources (MHR) – The official MHR page on the national minimum wage outlines the policy’s rollout schedule, calculation methodology and compliance guidelines for employers. The page also includes a FAQ section that clarifies the policy’s applicability to various employment contracts, including part‑time and contract workers.

2. Ministry of Finance (MOF) – The MOF’s wage‑and‑salary survey provides quarterly statistics on wage trends across industries, broken down by education level. The MOF’s dataset is frequently used by employers to benchmark salaries during recruitment.

3. Malaysia’s Department of Statistics (DOS) – The DOS publishes the Labour Market Outlook report, which offers macro‑level insights into employment trends, sectoral growth rates and average wages. The report includes a comparative analysis of the minimum wage against median salaries for different occupational groups.

4. Job Bank Malaysia – The government’s national employment portal offers real‑time listings of graduate positions, along with salary ranges for each role. The portal also hosts a “Salary Calculator” that estimates pay based on field, location and experience.

These resources are often cited by the MOE and university career centres when advising students on realistic salary expectations and job‑seeking strategies.

Government Dialogue on Wage Policy and Graduate Employment

During a recent parliamentary debate, the Minister of Education, Dr. Tan Hock Kien, echoed the MOE’s stance, stating that while the RM1,700 minimum wage is a significant step toward reducing wage poverty, it is not intended to constrain the compensation for highly qualified professionals. He highlighted that the policy encourages companies to offer competitive salaries to attract top talent and prevent talent drain abroad.

The Prime Minister’s Office (PMO) also released a brief memorandum reminding all ministries that policies should align with the broader economic strategy of sustaining a robust knowledge economy. The memo underlined that graduate wages should be determined by market forces and the value added by the professional skills they bring to the industry.

Bottom Line: The Minimum Wage Is Not a Salary Floor for Graduates

The MOE’s statement serves to clarify a common misconception among graduates and their families: the national minimum wage is a floor for all workers, not a ceiling for graduate salaries. While the RM1,700 figure represents a vital baseline for low‑paid labour, it has no bearing on the pay scale of university graduates, whose wages are predominantly dictated by industry demand, skill specialization and the economic sector’s growth prospects.

For graduates planning their entry into the workforce, the key takeaway is to focus on market‑aligned salary data, understand sectoral trends, and leverage the comprehensive resources provided by MOE, MHR, MOF, DOS and job portals. By doing so, they can negotiate employment terms that reflect their true market value, independent of the minimum‑wage policy.