Jobs in Singapore grow with economy, for now
The Singapore economy has been recovering nicely, and jobs are being created. However, improvement in the unemployment rate and wage increases are likely to be muted in the face of continuing uncertainties over the sustainability of world economic growth. To sustain employment growth and employability over the longer term, Singaporeans will have to learn new skills as the country makes the transition to a service-based economy.
For the near term, the economy looks rosy enough. On 17 May, the Ministry of Trade and Industry reported that the Singapore economy grew 7.5 percent in the first quarter from a year earlier. It also raised its forecast for Singapore's economic growth for 2004 to between 5.5 and 7.5 percent. Non-oil domestic exports for April grew 15.1 percent year-on-year.
On the same day, the National Wages Council recommended that companies that are profitable should reward workers with wage increases. However, wage increases should be "moderate", and increases should lag behind productivity gains.
On 22 May, Acting Manpower Minister Ng Eng Hen said that 14,300 new jobs were created in the first quarter of this year, and he was hopeful that the following quarter would be just as good. "I'm optimistic that with continued growth, we'll continue to generate more jobs," said Ng at a lunch function.
However, he also warned that some companies would continue to shed jobs. Therefore, the unemployment rate, which was 4.5 percent in March, will only decline slightly. "I think we're expected to go down to 4 percent -- slightly below maybe -- at the end of the year," he said.
On the same day, at another occasion, National Trades Union Congress chief Lim Boon Heng said that despite the improving economy, a three percent wage increase "is quite fair this year". He said that a hike in fuel prices, instability in the Middle East and overheating in China may severely affect the world economy.
To justify the limited increase, he could have added the fact that Singapore workers are already relatively well-paid compared to their Asian counterparts.
According to the World Competitiveness Yearbook 2003, among workers in Hong Kong, Malaysia, Singapore, South Korea and Taiwan, Singapore workers were the second best-paid -- behind South Korea in manufacturing and behind Hong Kong in service and managerial staff. Singapore workers also worked fewer hours than their counterparts in the other four Asian countries.
Based on the above, Singapore has no particular competitive advantage in either manufacturing or services over its Asian neighbours. Nevertheless, Singapore has to make the transition toward a more service-based economy, in line with developed economies around the world.
As it is, according to data from the Ministry of Manpower, from 1993 to 2003, there was practically no net job growth in Singapore's manufacturing sector. The bulk of the half-a-million or so jobs created during that period were in services.
So Singapore workers will have to adjust to a new employment environment.
In the May issue of Productivity Digest, a publication from SPRING Singapore, in an article titled "Learn to Enhance Your Employability", Jaime Koh and Sharon Chang pointed out that there are actually more jobs than there are Singaporeans for these jobs. The problem, as they put it, is that "there must also be people equipped for these jobs. Otherwise, the result is structural unemployment".
According to the authors, there are two dimensions to the problem. One is regarding the level of qualification. Many of the new jobs require higher skills and qualifications. Although the polytechnics and universities in Singapore have been increasing their intakes, they are still not producing enough graduates. Jobs requiring diplomas are expected to face the largest shortfall.
The other dimension of the problem is that, with more jobs in services, Singapore workers will have to develop specific service skill sets and service mindsets.
"Besides their vaunted industry, they will need innovation," the authors wrote. "Besides solving problems, they will have to seek and create new value niches. They will be called upon to provide customised solutions, and to handle simultaneous and varied requests together. There will be less routine work, and characteristics such as interpersonal relationships, emotional quotient (EQ), rapport-building and mentoring will be given higher emphasis."
The Singapore government, quick as always, had already set up the Singapore Workforce Development Agency in September 2003 to help unemployed Singaporeans find jobs and upgrade workers' skills.
However, Koh and Chang wrote that Singapore also has to revamp its adult continuing education and training system to help keep workers employable.
"[O]n the part of the workers, it is critical that they understand the urgency of acquiring the relevant skills to move into the new jobs," they wrote. "Just as important too is their preparedness to take up the jobs they might not have considered in the past. Otherwise, Singapore will continue to see structural unemployment rise, even as the economy grows."
For the near term, the economy looks rosy enough. On 17 May, the Ministry of Trade and Industry reported that the Singapore economy grew 7.5 percent in the first quarter from a year earlier. It also raised its forecast for Singapore's economic growth for 2004 to between 5.5 and 7.5 percent. Non-oil domestic exports for April grew 15.1 percent year-on-year.
On the same day, the National Wages Council recommended that companies that are profitable should reward workers with wage increases. However, wage increases should be "moderate", and increases should lag behind productivity gains.
On 22 May, Acting Manpower Minister Ng Eng Hen said that 14,300 new jobs were created in the first quarter of this year, and he was hopeful that the following quarter would be just as good. "I'm optimistic that with continued growth, we'll continue to generate more jobs," said Ng at a lunch function.
However, he also warned that some companies would continue to shed jobs. Therefore, the unemployment rate, which was 4.5 percent in March, will only decline slightly. "I think we're expected to go down to 4 percent -- slightly below maybe -- at the end of the year," he said.
On the same day, at another occasion, National Trades Union Congress chief Lim Boon Heng said that despite the improving economy, a three percent wage increase "is quite fair this year". He said that a hike in fuel prices, instability in the Middle East and overheating in China may severely affect the world economy.
To justify the limited increase, he could have added the fact that Singapore workers are already relatively well-paid compared to their Asian counterparts.
According to the World Competitiveness Yearbook 2003, among workers in Hong Kong, Malaysia, Singapore, South Korea and Taiwan, Singapore workers were the second best-paid -- behind South Korea in manufacturing and behind Hong Kong in service and managerial staff. Singapore workers also worked fewer hours than their counterparts in the other four Asian countries.
Based on the above, Singapore has no particular competitive advantage in either manufacturing or services over its Asian neighbours. Nevertheless, Singapore has to make the transition toward a more service-based economy, in line with developed economies around the world.
As it is, according to data from the Ministry of Manpower, from 1993 to 2003, there was practically no net job growth in Singapore's manufacturing sector. The bulk of the half-a-million or so jobs created during that period were in services.
So Singapore workers will have to adjust to a new employment environment.
In the May issue of Productivity Digest, a publication from SPRING Singapore, in an article titled "Learn to Enhance Your Employability", Jaime Koh and Sharon Chang pointed out that there are actually more jobs than there are Singaporeans for these jobs. The problem, as they put it, is that "there must also be people equipped for these jobs. Otherwise, the result is structural unemployment".
According to the authors, there are two dimensions to the problem. One is regarding the level of qualification. Many of the new jobs require higher skills and qualifications. Although the polytechnics and universities in Singapore have been increasing their intakes, they are still not producing enough graduates. Jobs requiring diplomas are expected to face the largest shortfall.
The other dimension of the problem is that, with more jobs in services, Singapore workers will have to develop specific service skill sets and service mindsets.
"Besides their vaunted industry, they will need innovation," the authors wrote. "Besides solving problems, they will have to seek and create new value niches. They will be called upon to provide customised solutions, and to handle simultaneous and varied requests together. There will be less routine work, and characteristics such as interpersonal relationships, emotional quotient (EQ), rapport-building and mentoring will be given higher emphasis."
The Singapore government, quick as always, had already set up the Singapore Workforce Development Agency in September 2003 to help unemployed Singaporeans find jobs and upgrade workers' skills.
However, Koh and Chang wrote that Singapore also has to revamp its adult continuing education and training system to help keep workers employable.
"[O]n the part of the workers, it is critical that they understand the urgency of acquiring the relevant skills to move into the new jobs," they wrote. "Just as important too is their preparedness to take up the jobs they might not have considered in the past. Otherwise, Singapore will continue to see structural unemployment rise, even as the economy grows."
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