March 23, 2017

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by Lee Chin Wee

THE Labour Market Report 2016 released today (Mar 15) revealed that the annual average resident unemployment rate rose to 3.0 in 2016, after holding steady at 2.8 per cent for the last four years. This is the highest figure since 2010, when the resident unemployment rate was 3.1 per cent.

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Compared to data from 2015, residents aged 30 – 39 (2.3 per cent unemployed, up from 1.9 per cent), and 50 & over (2.7 per cent unemployed, up from 2.4 per cent) were particularly affected, while those aged 29 & below saw the unemployment rate decrease from 5.1 per cent to 5.0 per cent.

 

Taken from Labour Market Report 2016, Ministry of Manpower

 

Part of the high unemployment rate can be explained by seasonal and frictional unemployment due to the cyclical nature of the global economy. Singapore tends to be buffeted by forces outside our control. The manufacturing sector, for instance, shed 15,500 jobs in 2016 because of flagging global demand for products. This figure would have been far worse, had it not been for the manufacturing sector unexpectedly expanding by 6.4 per cent in Q4 2016. Plunging oil prices have also badly affected the offshore marine industry, with retrenchments picking up in 2015-16. One would expect unemployment figures to improve as the global economy recovers.

However, the unemployment rate can also be attributed to structural unemployment: As Singapore adjusts to the disruptive impacts of new technology on traditional businesses, people’s skills no longer match up to market demand. Singapore’s continued economic transformation, therefore, may lead to underskilled or wrongly-skilled workers left by the wayside. As firms reorganise and restructure to become manpower-lean, longstanding jobs like accounting and secretarial work may be cut, while new business interests – financial technologies, for instance – are developed.

There are now 17,000 long-term resident unemployed (refers to those unemployed for more than 25 weeks), compared to 12,700 in 2015. This figure is the highest since 2009, when the 2008 Financial Crisis led to thousands of Singaporeans losing their jobs.

 

Taken from Labour Market Report 2016, Ministry of Manpower

 

Most worryingly, the long-term unemployment rate for degree holders rose to 1.0 per cent in 2016, the highest since 2004. Does this mean that more university graduates now hold paper qualifications that are ill-suited for the modern economy? Possibly. A bachelor’s degree in programming or software engineering received 10 years ago, for instance, may bear little relevance to the sought-after skills of today. Without a constant push for skills upgrading and on-the-job training, many graduates will find themselves either underemployed, or out of work.

As the economy becomes more complex, the need for specialised skills has soared. This has challenged the traditional view that higher education guarantees a stable career, as demand for specialised skills can change overnight with the introduction of new technology or sudden industry transformation. Professionals, Managers, Executives and Technicians (PMETs) formed 75 per cent of all residents made redundant in 4Q 2016 – a disproportionate figure.

Statistics seem to suggest that there is a growing mismatch between employee skills and job requirements; especially at white-collar managerial and technical levels. And even when tertiary-level education does meet market demand, the rapidly-evolving jobs landscape means that employees must be willing to continually upgrade themselves. Given this context, policies to help workers gain new skills or encourage businesses to leverage new technology are extremely important.

Whether Singapore will be able to bounce back stronger from this period of slowing growth and higher unemployment depends on how well we can react to technological disruption. If our workers and businesses do not stay ahead of the curve, one should be prepared for more grim news ahead.

 

Featured image by Pixabay user niekverlaan. (CC0 1.0)

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Leave supporters cheer results at a Leave.eu party after polling stations closed in the Referendum on the European Union in London, Britain, June 23, 2016. REUTERS/Toby Melville - RTX2HVXU

REUTERS

The city of Sunderland in northeastern England voted stronger than expected to leave the European Union in Thursday’s membership referendum.

According to official results, 61.3 per cent of voters in Sunderland backed leaving the bloc, above the 56.5 per cent predicted by J.P. Morgan in an analysis published before the vote.

Sunderland, one of the first few results to be declared, has a large number of older, lower income voters whose polls show are more likely to back the so-called “Brexit”.

If the ‘Leave’ campaign had not been strongly ahead here, it could have indicated it would struggle to break through in areas less favourable to Britain‘s exit from the EU.

The outcome was welcomed by Nigel Farage, leader of the anti-EU UK Independence Party.

The implied probability of a British vote to leave the European Union is 63 per cent, according to odds provided by the Betfair Internet betting exchange.

According to Reuters calculations after 41 declarations, plus partial Northern Irish results from the BBC, 52.7 per cent of Britons have backed a leave vote and 47.3 per cent remain in Thursday’s EU membership referendum.

 

Featured image by REUTERS.

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by Ryan Ong

LABOUR is still a dirty word to Singaporeans. Let’s face it – most of us still know parents who point at road sweepers, and threaten that “if you don’t study hard, that’s what you will be like.” But over the past few decades, our idea of what labour is has changed:

HOT off the press: The by-election for Bukit Batok was called yesterday (April 20), with Nomination Day set for next Wednesday and Polling Day on May 7. After Mr David Ong from the People’s Action Party (PAP) resigned his post last month, the fight for the hot seat looks to be between the incumbent party’s Murali Pillai and Dr Chee Soon Juan from the Singapore Democratic Party (SDP).

Not since its recurrent problems with rats has the estate been more in the spotlight – here’s our lay of the land, as well as Bertha’s thoughts on some interesting points about this by-election.

Speaking of points, we have a bunch of graphs that may help you to understand the redundancy report released by the Ministry of Manpower (MOM) yesterday. White-collar workers were burnt pretty bad: They lost the most jobs and took the longest to find new ones after they were retrenched last year, the report said.

Still, jobs went up in smoke across all broad sectors with manufacturing taking the top spot for being the most vulnerable, ahead of the service and construction sectors.

Workers in these sectors looking for new jobs better find some shade in the day – the weather has been incredibly hot and temperatures soared to 36 degrees on Tuesday, marking the day as the hottest day on record with an average temperature 30.6 degrees. Last week, it had soared to a 10-year high of 36.7 degrees.

It felt like a furnace – but this was literally so at an oil tank on Jurong Island yesterday, where 150 firefighters took five hours to put out a blaze that raged from about 3pm. The fire was so intense, it caused the oil tank belonging to the Jurong Aromatics Corporation (JAC) in Tembusu Road to buckle. No deaths were reported and JAC has yet to comment on the fire.

 

Featured image by Kong Chong Yew. 

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Crowd at National day Parade. Image sourced from Flickr user: Brian Jeffery Beggerly

by Bertha Henson

FEET planted apart?

What’s all this about a Singapore core? Or is it a Singaporean core? Is there a difference? Some people have been highlighting Minister Chan Chun Sing’s speech in Parliament about how the core is not exclusive. That is, it can include foreigners.

Some background on this.

The term surfaced a few years ago when the foreigners-versus-locals debate was at its height with the overwhelming presence of foreign workers in the pre-2011 days. People wanted to know what it meant to be a Singapore citizen and asked for measures to make this status distinctive. There was a unanimity over building and strengthening a Singaporean core in the economy, so much so that moves were made to ensure that companies make attempts to hire Singaporeans first if positions fell vacant. One MP even brought an apple into Parliament chambers to illustrate his point.

So when there’s a headline like, “Singaporean core does not mean S’poreans only, says Chun Sing”, which was in TODAY, you can bet that many people were flummoxed. Is he talking about permanent residents as well? Or – gasp! – foreigners?

The article said:

Labour chief Chan Chun Sing cautioned against mistakenly creating a “Singaporeans only” attitude in the country’s bid to develop a Singaporean core, which is more about creating “a diverse team of talents from cross-sector, cross-cultural backgrounds and international exposure”.

Mr Chan, who is also Minister in the Prime Minister’s Office, added that the Singaporean core cannot be defined as an “exclusive and inward-looking perspective”.

In making these points about the workforce in Parliament yesterday, he cited the examples of the head honchos for the Singapore arms of ExxonMobil and Shell, who are both Singaporeans with overseas exposure and have returned to take on leadership positions.

So, given the examples he gave – that were reported in the newspaper – he is still talking about Singaporeans, including Singaporeans with international exposure. But surely, nobody is arguing that Singaporeans who have spent time abroad and come back home shouldn’t be considered as part of the core?

A Singaporean core that “does not mean S’poreans only” – this point was seized by some as a direct contradiction of earlier definitions of the Singaporean core as being Singaporeans-only.

So what did Mr Chan say exactly? We listened to the TV recording:

We believe in the Singapore core. We believe in urging and working with all the companies to build a strong Singapore core. But that Singapore core does not mean that it is an all-Singaporean workforce only.

We recognise and we accept that for Singapore to be regionally and globally competitive, we need diverse team – diverse team of talents from cross sector, cross cultural backgrounds, and international exposure.

So what does it mean to develop a real Singapore core? It means giving all Singaporeans the best shot to rise up the hierarchy. We are not asking for affirmative action – that just because we are Singaporeans, and therefore we will get ahead compared to the rest. We are asking for a fair chance.

Ah, that clarifies things a lot more. It looks as if he used Singapore core and Singaporean core interchangeably. In fact, Manpower Minister Lim Swee Say expanded on this yesterday when he referred to “one Singapore Workforce”. Perhaps, the G should tally its references to avoid confusing people.

To reiterate: It is a Singaporean core (Singaporeans-only) but within One Singapore workforce (which includes foreign workers who are needed here).

To be continued…Muslim feet firmly grounded?

 

Featured image IMG_7578 by Flickr user Brian Jeffery BeggerlyCC BY 2.0. 

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by Bertha Henson

SOME numbers hit you immediately in the annual Labour Market Report. Like the number 100 – which is the extra number of employed Singaporeans last year. Like the number 31,600 – which is the extra number of foreigners employed last year. Mind-boggling! To think that we were supposed to be tightening the tap on foreign workers!

The new Manpower Minister knows how likely it is for people to jump to the wrong conclusions: Jobs are all going to foreigners! So, he took members of some social media news sites, including TMG, through the report earlier today.

Was he convincing? Yes and no.

Crunching numbers

The 100 figure looks drastically small, and would imply that there were hordes of unemployed citizens out there. But the unemployment rate for citizens is 3 per cent, which in some countries, would be defined as full employment. What gives? Simply, Singapore is running out of local labour. Or those who want to be employed are already employed. And the jobs created are being filled by, yes, foreigners. But if the number of foreign maids and construction workers is taken out, that 31,600 figure comes down to 15,800.

It is likely that some people think the foreign worker number is still too high. It comes from the confusion over what tightening the foreign worker tap means. Tightening the tap means slowing the inflow, not throwing out the water. That’s why there are still so many foreign workers around; there is one foreign worker to every two Singapore workers. The tap has definitely been tightened over the years, from 7.6 per cent in 2011 to 2.3 per cent last year – (the figures include maids and construction workers) –  or the country would be swamped by foreigners and citizens would become a minority.

So that part of the story looks okay but it cannot be that there are just 100 extra employed Singaporeans? It’s really too small compared to 2014’s 96,000 increase. In 2013, the local labour market grew by 82,900 over the year before.

Mr Lim Swee Say and his Ministry of Manpower (MOM) officers cite a combination of factors, such as how there were more part-timers, say, in the retail market then. They left, for varying reasons, but they don’t seem to be looking for full-time jobs so they were out of the market last year.

Also there were measures to bring in more women, older people into the labour force. In other words, the local labour supply has been sucked up over the years with few people left to spare. That’s why local employment growth rate is near zero, and not likely to climb much higher this year either. Maybe 1 per cent.

Convincing? (Do not shoot the messenger.)

What about incomes?

So if everybody who needs work is working, what are they earning? The nominal median gross monthly income is $3,798 which is about 7 per cent higher than last year’s figure. But incomes rise and fall, so if you look at it over a five-year span, the annualised increase is about 3 per cent, not much different from the increase between 2006 and 2010 for this middle group. The lowest 20 per cent of workers earn $1,965, which is also a 2.9 per cent annualised increase from 2010 to 2015. But the change from the previous five years from 2006 and 2010 is more obvious. Then, the rate was 2.1 per cent.

Retrenchments

Now, here’s the not-so-good news – 14,400 people, including half who were in the services industry, were made redundant last year, a figure that’s been climbing since 2010. There’s no breakdown between locals and foreigners. Mr Lim isn’t too fussed over this given that they manage to get jobs fairly quickly.

Evidence: long-term unemployment rate is 0.6 per cent. But given that they are the PMET sort who would be more highly paid than the rank-and-file workers who got laid off in the big retrenchments of 1997, he’s aware that employers might not be willing to meet their pay expectations. In October, the Career Support Programme was launched for the G to subsidise part of the cost of hiring a retrenched, older worker. You can read about it here.

The bottom-line

So what do we make of last year’s report and what is the prognosis for the future? It seems the tight local labour supply isn’t going to go away. It means that businesses will still keep yelling for more foreign workers because they can’t find locals to do the job. It means that employers might have to pay more to hire Singaporeans because they have little or no choice. This might be good for citizens in the short term, but we might well be over-pricing ourselves if productivity doesn’t move up as well.

That’s actually the bigger issue.

 

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Mr Chan Chun Sing thinking about the Game Theory involving the tripartism.

by Wan Ting Koh

GAME theory. It’s in the celebrated film A Beautiful Mind, starring Russell Crowe. But it can also explain why the International Labour Organisation (ILO) called Singapore a “leader of tripartism” during this week’s international forum on tripartism and praised the republic for its model of tripartism between unions, employers and the G.

What’s so special about Singapore, and what’s all this got to do with game theory?

Game theory, pioneered by John Nash, predicts the optimal decisions of each party, given what everyone else decides. These choices are based on self-interest, plain and simple.

The National Trades Union Congress (NTUC), the Singapore National Employers Federation (SNEF), and the Ministry of Manpower (MOM) are playing a ‘game’ to address challenges the workforce faces in Singapore. They each deliberate and ratify policies before these are implemented. And unlike their counterparts overseas, it appears they typically get balanced outcomes that are best for Singapore as a whole.

Take the recent increase in the retirement or reemployment age from 65 to 67 for example. The measure wouldn’t have gone through if it wasn’t for employees in unions lobbying to stay productive in society longer, and employers agreeing to assess employees for their work performance to determine if they are fit to continue to work. The G then stepped in to formulate and implement the appropriate labour policy.

But elsewhere, unions and employers try to get their way through a constant battle over wages, hours, benefits, and a whole host of issues. Who has the strongest hand gets their way and the interests of the other party tend to be viewed in an adversarial light. Take France for example. In July this year, French farmers set pigs loose in front of government buildings and dumped manure on roads and in front of supermarkets and banks to protest the low prices for meat, milk and other products. The demonstrations only subsided after the government promised them €1.1 billion (S$1.7 billion) in additional support.

In fact, governments overseas might side with either labour or business at any time, depending on their ideological bent. Director-general of the ILO Guy Ryder described these tripartite alliances as “opportunistic” rather than “permanent” as they “pursue particular interests” which disturbs the equilibrium of tripartism.

So why is Singapore so exceptional? In a perfect world, maybe NTUC, SNEF, and MOM are acting out of some altruistic urge to do what’s best for Singapore as a whole, rather than just for workers or employers. That’s one possibility. But game theory shows that cooperation is possible even when all parties are self-interested.

The “success” of Singapore’s model is something that bears an interesting resemblance to a particular branch of game theory, cooperative game theory, also known as the “stag hunt”. In a party of hunters, each hunter has to choose to cooperate with the other hunters in order to successfully hunt a stag. If any one party chooses not to cooperate (and pursue a much smaller payoff), then those who have chosen to cooperate will fail to hunt the stag (and get nothing). In such a case, the logical course of action would be for hunters to cooperate and each get a share of the stag than risk getting less or nothing by going solo.

The tripartite partners work in the same way. It would be inaccurate to say that the three parties prioritise collective interest of the partnership before their own interests, but rather that each individual interest is in line with the partnership as whole. What is unique to Singapore is that like the hunter and stag, each party’s individual interest coincides with the common vision of the tripartite alliance.

It’s like what Minister for Manpower Lim Swee Say concluded in his speech for the international tripartite forum on Monday where he said that each of the institutions share a similar priority: How to transform the life of Singaporeans for the better. In fact, the building block for tripartism when Singapore first implemented the system 50 years ago is not merely trust, but a common self-interest which the three parties saw as more beneficial to compromise on rather than go head to head.

And so if you are wondering why Singapore unions don’t go all out to strike, protest and fight for higher pay or other rights, well, John Nash may have the answer for you.

 

 

[Editor’s note: Mr Guy Ryder is ILO’s director-general, not its chairman. We apologise for that error.]

Featured image by Najeer Yusof.  

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Photo By Shawn Danker
The Ministry of Manpower building.

by Bertha Henson

So the latest employment statistics are out for the first quarter of this year and here’s a key thing that the Manpower Ministry says:

Reflecting seasonal declines and sharper moderation in employment growth in sectors with less favourable business conditions, employment contracted by 6,100 in the first quarter of 2015. On a year-on-year basis, total employment grew to 3,617,800 in March 2015, which was 2.7% higher than a year ago.

What does this gobbledygook mean?

Simply, it means that between January and end March, there were fewer people employed in Singapore compared to October to December 2014. Note that there is a phrase “reflecting seasonal declines’’, which can be taken to mean that it is usual for a dip in employment – or not so much growth in employment –  to happen at this time because of, say, the end of hires for the festive period.

But it’s been some time since any quarter has gone negative. The 2014 first quarter results, for example, showed a positive employment of 28,300 while the year before, it was 28,900.

So what happened? MOM gave some reasons including how the manufacturing sector shrank by 6,900 jobs while retail lost 4,800 jobs.

Clearly, MOM wants all to see the bigger picture which is why it has the year-on-year figures as well. What this means: Between April 2014 to end March 2015, the employment figure is 3,617,800, and this is MORE than for April 2013 to end March 2014. How much in all? About 95,600 jobs. EDIT: You can access the original MOM figures here.

 

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