TOC asks financial expert and analyst, Mr Leong Sze Hian, to help make sense of the latest slew of statistics from the Ministry of Manpower.
TOC: We’ve been bombarded with government statistics lately on the state of the economy. In simple terms, how bad is the economy and job outlook right now?
Leong Sze Hian: Singapore is experiencing in a sense, a quintuple whammy – record high inflation, lesser jobs for locals, declining real wages, declining productivity and rising labour and business costs.
TOC: The hiring of PMETs seem to be hardest hit – hiring was just 1.2 per cent from October to December 2008. The govt and the NTUC mentioned this group which needed help. Have the help schemes done what they should?
Leong Sze Hian: I think the data speaks for itself – according to the MOM’s latest Labour Market 2008 report, Employment Change (growth in employment) for locals (citizens and PRs) as a percentage change declined from 38 per cent in 2007 to 29 per cent in 2008.
The percentage of foreigners to total employment has increased to 36 per cent. Whilst local employment grew by 64,700 or 3.5 per cent in 2008, foreign employment grew by 156,900 (or 17%) in 2008, up from 144,500 (or 19%) in 2007. (See Chart One below.)
So, without the break-down of data for jobs to Singaporean PMETs, it may be somewhat difficult to assess the effectiveness of the help schemes, and how hard they are being hit.
TOC: In light of the extensive publicity over the Jobs Credit Schemes, it looks like the scheme hasn’t stopped employers from firing workers, as it was supposed to. What’s going on here?
Leong Sze Hian: About 73,100 residents were unemployed in December 2008, a 58 per cent jump year-on-year, excluding job losses since 1 January 2009, for which the data is still not available yet.
If the jobs created can be broken down to citizens and PRs for 2004 to 2006, why can’t the unemployment data be broken down too?
Year-on-year, Singapore’s net employment outlook for the second quarter plunged 99 percentage points.
TOC: The manufacturing and financial industry, and in the storage and transport sectors, are all hit by the downturn. What can the government do?
Leong Sze Hian: Singapore’s Consumer Price Index (CPI) for general households climbed 6.5 per cent in 2008 – its highest level in 28 years, with the poor being the hardest hit at 7.4 per cent. I suggest we explore measures to stimulate consumption and reduce fear and uncertainty, such as aggressively reducing GST, fees, costs, aggressively increasing financial assistance to the lower-income, etc.
TOC: What can employees do? Should they switch to the services sector which is said to be still hiring?
Leong Sze Hian: The problem is how does one know that the expected jobs will still be available after one has gone through re-training?
I think it is already hard enough for Singaporeans to face the uncertainties of a recession. We should not have to bear the extra anxiety and uncertainty of not knowing the break-down in the employment statistics (citizens, PRs and foreigners) as well. How many of the projected services sector jobs will go to foreigners and PRs, relative to Singaporeans?
TOC: Is it true that employers are still discriminating against older workers as was stated by Gilbert Goh, founder of transitioning.org and who helps counsel retrenched workers?
Leong Sze Hian: The data speaks for itself – those aged 40 and over comprised 43.3 per cent of all unemployed residents.
TOC: As for new graduates, the MAS recently announced a $15 million scheme whereby the MAS will, effectively, pay for part of the starting salaries of these graduates hired by the banks and financial institutions. It’s almost the same as the Jobs Credit Scheme. Do you see MAS’ approach working or do you think it will work?
Leong Sze Hian: The subject of jobs may arguably be the subject of most pressing concern for Singaporeans now. The $15 million scheme will help to employ some graduates – the question is how many will be Singaporeans?
In this connection, in 2006, 52 per cent of jobs created went to residents, of which 37 per cent went to citizens and the balance 15 per cent to PRs.
In 2007, the percentage of jobs created that went to residents declined to 38 per cent. Of this, what percentage went to Singaporeans?
Now, in the MOM’s latest report, the percentage of jobs created that went to residents has declined further to 31 per cent. So, how many per cent went to Singaporeans? (See Chart Two below)
TOC: In your view, how long do you think these bad times will last?
Leong Sze Hian: Nobody knows, but the following statistics may underscore the severity of the problem:-
The latest Manpower Employment Outlook Survey says that Singapore has the worst jobs market outlook among the 33 countries in the Manpower poll.
Although earnings growth in 2008 was 5.4 per cent, after discounting for inflation of 6.5 per cent, real earnings declined by 1.1 per cent in 2008.
Labour productivity fell by 12% in Q4 08, deeper than the drop of 9.0% in the preceding quarter. In 2008, productivity slid by 7.8%, following the decline of 0.8% in 2007.
The overall unit labour cost (ULC) rose for the eleventh straight quarter, with the increase accelerating to 12% in Q4 08 from the 10% in the preceding quarter. In 2008, overall ULC rose to 9.6%, higher than the increase of 5.2% in 2007.
Unit Business Cost (UBC) rose by 8.2% in 2008, higher than the rise of 2.5% in the year before.
In view of the above statistics, I would like to suggest that we review our labour and economic policies, to address and reverse the above unhealthy statistical trends, which may help to accelerate the recovery.
HELP keep the voice of TOC alive!
If you like this article, please consider a small donation to help theonlinecitizen.com stay alive. Please note that we can only accept donations from Singaporeans. Thank you for your assistance.Do you have a flair for writing? Volunteer with us. Email us your full name and contact details to theonlinecitizen@gmail.com
The gahmen’s priority is to create many jobs for economic growth, not how many % goes to citizens, vs foreigners or PRs.
In the other words, don’t care how it is done, even can recruit very cheap and many foreigners, as long as there is jobs and growth. Growth is a KPI for minister and public sector salary increase!
Furthermore they will also more or less be assured of at least 50 % or more walkovers at every election and 66 % votes. Furthermore, no one dare to protest on the streets no matter how bad things become.
Ministars only worry about CEOs’ pay since they peg their salaries to top private sector earners!! So, garhman will import more and more foreigners (and convert many to PRs) to lower business costs for the CEOs
Even you go for retraining doesn’t guarantee you a jobs and you may in debt by the course fees.
PMET is the worse hit as they studies so much and employer don’t care what you know. They care how much sales you can bring in and what task syou can perform to match the pay.
If they want to show good on paper so many degrees foreigners out there to pick.
30% of worker now are foreigners and if you malaysia PR, we are minority!
3/4/09
The figures are not surprising and what we need is a U Turn from dependence on Foreigners or so called Foreign Labours/Talents to Hire Singaporeans Solely, and only then Modern Singapore can regain its vigour and prosperous again when her economy recovers. Just imagine billions of Singapore Dollars were remitted back by these Foreigners or so called Foreign Labours/Talents, and conversely, we can sing loudly that our government also earns billions from Foreign Levies from Employers.
Time to say no to Foreigners or so called Foreign Labours/Talents, and our Opposition MPs must high this in the next Parliament sitting.
Regards
Andrew Chuah
Will the million dollar men listen? May be I forget what Gan Kim Yong shouted in the news: never bow to Singaporean?
Singapore is experiencing in a sense, a quintuple whammy – record high inflation, lesser jobs for locals, declining real wages, declining productivity and rising labour and business costs.
Hmm. It is implied there is stagflation in S’pore. But I think not, as the recession is caused by demand-deficiency, not through a supply-shock.
Furthermore, “record high inflation” in S’pore was in 2008. If Leong is predicting the future, then using this term is inappropriate, as inflation rate will probably decline sharply in coming months, similar to other countries.
Lastly, the statistics to the last interview question were based on 2007 and 2008, and there are no explanations for the statistics. Just reading the statistics alone cannot lead to this conclusion: “In view of the above statistics, I would like to suggest that we review our labour and economic policies, to address and reverse the above unhealthy statistical trends” !
For example, the reason why labour productivity fell in 2007-2008 was because of higher employment gains within the same period. The fall in labour productivity means same or less output is produced by more inputs (labour, in this case). So should we be happy or not?
I wouldn’t jump to conclusions based on uninterpreted statistics.
I posted the following in Diary of a SIngaporean Mind.
Straits Times (3 Apr 2009) reported MOM minister Gan Kim Yong say that “official figures so far show that in the first nine months of last year, about one in three people made redundant – through retrenchments or early termination of contracts – was a foreigner.
This proportion is almost equivalent to the relative number of foreigners here as they form 36 per cent of Singapore’s workforce.
But the redundancy figure is an underestimated number as it does not include employment contracts or work permits that are not renewed.
‘So if you take them into account, numbers have been higher for foreign workers,’ he notes.”
Spinning to make the numbers look good? Then, 7 in 10 new jobs went to foreigners. Now, about 4 in 10 jobs lost are of foreigners. So? Still more Singaporeans get fired right? Where is the so-called buffer for job losses by foreigners?
The medium age of workers are now 38 yrs old with at least Degree or Diploma. After more than 10 yrs as executive, their pay can reach 4K.
Supplies are abundent with degree holders of 25 yrs from third world countries with pay abt $2.5K
If you are an employer, who is in the right mind to employed the locals!
Dear Minister Gan
Please give us a breakdown of the jobs that goes to Singapore Citizens versus PR. It is so easy to get a PR in Singapore, just study and graduate from 1 of the government polys or universities. 1st generation PRs do not serve NS and reservist but get benefits like Singaporeans.
The 10% extra medical subsidy that Singaporeans is nothing compared to the inconvenience and disruption of reservist to our lives.
In Singapore, only the PAP don’t have competitions rest of us is fighting for our survival.
That why we are the most pessimistic!
#10) TrueBlood Singaporean
‘In Singapore, only the PAP don’t have competitions rest of us is fighting for our survival.’
…………………………………………………………
During a discussion with an American expert a few years ago, I mentioned that Singapore is a safe place because we have total gun control unlike the US, he retorted: “Guns don’t kill people, it is people who kill people.”
In the same way, PAP don’t stop the opposition parties from contesting in the elections, it is the people who don’t vote for them.
It’s no wonder why so many singaporeans remain single or married with no kids. Why have a family when you can’t even feel confident about one’s own future. Better to suffer alone than bringing your own loved ones down altogether.
great article.
Just any political fractions in MNCs, the stronger party will try to eliminate the weaker one when there is a change of management of different nationalities.
In the end everything follow the “Darwin Law of Survivial of the Fittest!”
I don’t see Singaporean can be unite when there is crises as we are more diverse as ever, so many diffferent type of nationalities in Singapore.
Ask any Singaporean, do they willing to die for the country just for the HDB Flat, the answer is “No” cause there is no ideals or dream to fight for. NS is not a option but a must and after serving for 14 years, the end is just a watch. Job Security is not there and daily survivial to meet the bills become a problems.
To Edward :
No people voted for the opposition.
They got about 30-40% of the votes but was only represented by 2 candidates.
That’s not normal.
To Edward:
Think of election as a football match. If both the home team (PAP) and referee (election body) are good friends, how can the opposition party win?
All Singaporean adults should vote, but the GRC system is depriving most of this entitlement.
aiyoyo
all info/data if not very precise, clear + detail,
how to ensure correct info pass to the public???
but 1 thing for sure, those elites sitting in the office,
public sure know who they are..
aiyoyo
Keeping and creating jobs is the paramount concerns of ALL governments. See http://www.transitioning.org/?p=624 for an example of what other governments do in this regard.
One only need to compare such actions of other governments and ask if the Singapore government is pursuing similar policy to help Singaporereans and if not why not. After all they must be accountable for the use of taxpayers’ monies.
#6)
Leong Sze Hian never used the term stagflation. It’s clearly inappropriate because we aren’t stagnating but contracting along with inflation though inflation is decreasing (as it would in a recession) Stagflation isn’t necessarily caused by supply shocks, even though the best example of stagflation was caused by a supply shock in oil.
What’s particularly remarkable is that though Singapore has been in a recession since 2nd Qtr 2008, we still had a record inflation rate in that year. Similarly, there’s nothing “inappropriate” with the term “record high inflation”. That is an accurate and factual description of the state of the economy.
As for those statistics, those are the latest available. The data for the first quarter isn’t out yet, so we make do with what we have. If no explanations have been given (I don’t know if there were any official explanations), it might be worth reviewing labour and economic policies to see if they have contributed to those occurrences. A review doesn’t necessarily constitute a change; it’s like a study of what caused those.
#15) mon
‘They got about 30-40% of the votes but was only represented by 2 candidates.
That’s not normal.’
#16) Alan
‘Think of election as a football match. If both the home team (PAP) and referee (election body) are good friends, how can the opposition party win? ‘
…………………………………………………
In the US, it is the gun that causes many innocent deaths. PAP is the medium (the gun) that causes the people NOT to vote for the opposition. PAP may lead the country to its demise after one or two generations like Argentina which was one ot the ten richest countries in the world and which also had a dominant ruling party, the Peronistas.
#19:
No, he did not use ‘stagflation’, but he implies it, deliberately or accidentally. Of course he’s wrong. Yup, I understand you don’t need to have supply shocks for stagflation.
What’s particularly remarkable is that though Singapore has been in a recession since 2nd Qtr 2008, we still had a record inflation rate in that year. Similarly, there’s nothing “inappropriate” with the term “record high inflation”. That is an accurate and factual description of the state of the economy.
However, inflation was also caused by external supply shocks – 2007 and 2008 recorded sharp rises in prices of basic neccessities such as food. That term can be used for then, but NOT now or in the future, as Leong implies. That’s why I find his interview misleading, because he seems to be muddling past and future stuff.
it might be worth reviewing labour and economic policies to see if they have contributed to those occurrences. A review doesn’t necessarily constitute a change; it’s like a study of what caused those.
Of course, of course. But Leong in his conclusion suggests we should reverse these trends. That is my problem with this interview article: it seems to judge the economic prospects of S’pore using statistics not properly explained.
I think Sze Hian is brilliant and a very smart fellow but he needs to be able to present information in a way that an average Singaporean would be able to relate and understand.
Regurgitating data as it is, is not very helpful. If you cannot use simple explanation or draw analogy for easy understanding, you’ll lose a good portion of your audience.