Singapore seems to have more jobs than workers. Unemployment fell to a 14-year low, dropping to just 2 per cent, in 2011 and a tight labour market pushed up wages and recruitment of foreign workers. [Read more...]
Singapore is the second freest economy in the 2012 Heritage Foundation Economic Freedom Index after Hong Kong. Singapore stands out for having the lowest unemployment rate as well as the lowest government spending as a percentage of the gross domestic product (GDP) among the top 10 countries on the Economic Freedom Index. (In the Asia Pacific region, government spending as a percentage of GDP is lower in Taiwan, ranked 18th on the Economic Freedom Index, and Indonesia, ranked 115th.) The 10 freest economies are
- Hong Kong
- New Zealand
- United States [Read more...]
Singapore’s ministers remain the highest paid in the world even after proposed pay cuts, with even junior ministers getting more than President Barack Obama, as we saw in a previous post yesterday.
But then the Singapore economy has been doing well by various measures. While the economic growth rate fell from 14.5 per cent in 2010 to 4.8 per cent in 2011, unemployment is down to only 2 per cent.
So let’s look at the world’s highest paid leaders and their economies measured by various indicators. [Read more...]
More than four million people around the world stopped looking for jobs last year, according to the International Labour Organization (ILO).
The proportion of discouraged workers – who would rather be working but couldn’t find jobs – was particularly high in Singapore, as this chart shows. It’s taken from the ILO’s newly released World of Work 2010 report, a labour market study from 2009 till the first quarter of 2010. The chart is taken from the full report, which can be found here on the ILO website.
While the number of unemployed people in Singapore is small, those out of work are having a harder time finding new jobs than in 2007 and 2008, according to data from the Ministry of Manpower. You can see the figures at the end of this post.
Average earnings fell while there was no drop in unemployment in the second quarter of this year, according to the Singapore labour market survey released by the Manpower Ministry today.
The seasonally adjusted unemployment rates remained unchanged at 2.2 per cent overall and 3.2 per cent for Singapore residents, said the report.
There were 84,400 unemployed residents in June 2010. About 16,500 of them have been out of work for more than six months.
Average nominal earnings fell from S$4,310 a month in January-March to S$3,819 a month in April-June.
Average real earnings fell from S$4,263 to S$3,733 as consumer prices rose. The consumer price index was up 3.1 per cent in the second quarter compared with the same period last year. (See the Singapore Statistics Department data here.)
Generally worst off were the 182,300 people in the hotels and restaurants business, with average nominal earnings of S$1,451 a month. See the tables below showing the average earnings and occupations of Singapore's three million working population.
More locals than foreigners found jobs in Singapore for the first time in three years when the economy shrank 2 per cent last year. The number of local jobholders increased by 41,800 while 4,200 foreigners were thrown out of work. It was a reprise of events after the 2001 recession except that far more foreign workers suffered job losses then.
The total working population stood at 2.99 million at the end of December last year, with 1.93 million locals making up nearly 65 per cent of the workforce and 1.05 million foreigners.
It was a big change from 2007 and 2008 when far more foreign workers were hired than locals.
The sharp drop in foreign workers after the 2001 recession, when the economy shrank 2.4 per cent, and their big increase in 2007-2008 are both reflected in this chart. Based on figures from a Ministry of Manpower report, it shows economic downturns have hit foreign workers harder than locals in Singapore.
Singapore is no country for old men and women. Although Minister Mentor Lee Kuan Yew continues to hold office at 86 and his former deputies Tony Tan and S Dhanabalan are corporate bigwigs in their 70s, age can be a disadvantage lower down the job market.
Older laid-off workers are likely to remain unemployed longer than younger workers, no matter what their education level.
They may have the same problem in other countries, but now we know how acute the problem is in Singapore.
A Ministry of Manpower (MOM) report shows nearly half of those in their 30s and more than 50 per cent of those in their 40s and 50s remained unemployed six months after losing their jobs. Younger workers were luckier, with 68 per cent of the under-30s re-employed within that time.
Long-term unemployment is on the rise, with almost a quarter of the jobseekers looking for work at least for 25 weeks, according to the ministry report. It says, "The number and share of unemployed residents who had been looking for work for at least 25 weeks (i.e. long-term unemployed) rose from 12,900 or 18% of job seekers in December 2008 to 13,900 or 23% in December 2009."
Singapore residents aged 40 and over made up 47 per cent of the jobless workers in December 2009, up from 43 per cent in December 2008.
This table shows the percentage of Singapore residents who were re-employed within six months of losing their jobs. It shows their age groups and education levels. The figures show how hard it is for older university graduates to get new jobs.
(The letter s indicates "data suppressed due to small number of observations", says the report.)
Foreign workers not only helped the Singapore economy to grow but also helped raise the median income of Singaporeans, Finance Minister Tharman Shanmugaratnam said in his Budget speech yesterday.
That contradicts a Wall Street Journal report last month, which I quoted in an earlier post.
The minister and the Journal both agree the foreign workers helped the economy to grow.
But their presence was a damper on productivity and blue-collar wages, according to the Journal.
Foreign workers — over a million strong — make up about a third of the Singapore workforce.
The median monthly income of people working full-time rose 0.5% from 2,590 Singapore dollars in June 2008 to 2,600 Singapore dollars in June 2009, after soaring 11% in 2008 and 7.7% in 2007, the Ministry of Manpower reported on November 30, 2009.
But many Singaporeans are unhappy about the influx of foreign workers.
The minister said there was a need to "moderate the growth of the foreign workforce", using a "price mechanism", like for any other product in the market.
The Economic Survey of 2009, released today by the Ministry of Trade and Industry, notes how the government fought the recession.
The centrepiece of Budget 2009 was the 20.5 billion Singapore dollar (SGD20.5 billion) Resilience Package, it says.
The stimulus worked. Singapore is out of the recession with overall unemployment down to 2.1 per cent.
Among Singapore citizens and permanent residents, the unemployment rate fell to 3 per cent from 5 per cent with an estimated 60,100 residents out of work in December 2009.
The SGD20.5 billion (about $14.5 billion) Resilience Package was not only effective but cost-effective. It was a shoestring operation compared with the business activities of the two Singapore sovereign wealth funds.
The survey mentions the SGD5.1 billion the government allocated to help preserve jobs for Singaporeans.
That was only a fraction of the 11 billion Swiss francs (about SGD14.2 billion) the Government of Singapore Investment Corporation (GIC) invested in the Swiss bank, UBS.
GIC's paper losses on UBS alone could total about 7.85 billion Swiss francs — more than the entire outlay to protect jobs. GIC's UBS shares are now worth only about 3.15 billion Swiss francs, according to the Straits Times.
Joseph Nye mentions Singapore Prime Minister Lee Hsien Loong in his book, The Powers to Lead. He writes:
Setting the right example is another crucial form of communication for leaders. Anticipating a sceptical public reaction when Singapore raised the salaries of government officials in 2007, Prime Minister Lee Hsien Loong announced that he would forgo the raise for himself.
I read that on the day the Straits Times reported how the Prime Minister had praised the people for their resilience during the recession.
While the government protected jobs by helping employers pay their workers, those looking for work had accepted whatever they could find.
And that, he said, had kept unemployment low — only 2.1 per cent in the fourth quarter of last year.
Thailand's was even lower, at 1.8 per cent during the second quarter of last year, according to the International Labour Organization. (It did not give later figures for Thailand.) Workers who had lost their jobs in Thailand, Indonesia and much of Southeast Asia were starting their own little businesses in the informal sector, said the ILO's Global Employment Trends report.
But in Singapore the job supply increased.
More people were working by the end of last year than at any other time in the past decade, I noted last Friday when the Ministry of Manpower released its fourth quarter estimate.
So how has the Singapore government done compared with others if leaders are evaluated like workers — with performance indexed to pay?
Let's look at the world's 10 highest paid leaders and see how their economies have performed.
As you can see from the table, Australian Prime Minister Kevin Rudd is the only one who can say he has kept his economy from shrinking.