Wage growth slowed considerably this year and the unemployment rate has inched up for the resident labour force, according to figures compiled by the Ministry of Manpower (MOM), which bears out limp economic conditions.
Factoring in inflation, the nominal monthly median income of full-time employed residents in Singapore, including Central Provident Fund contributions grew by 3.2 percent this year, which is much slower than 5.3 percent in 2015.
Overall resident unemployment rate, on a seasonally adjusted basis, rose from 2.8 percent in June last year to 3 percent this year, the highest since 2010, according to the MOM’s 2016 advance report on the Labour Force in Singapore released this week.
The unemployment rate had been broadly stable from 2012 to 2015, in the range of 2.6 percent to 2.9 percent, as the increase for males was balanced by the decline for females. However, both male and female unemployment rates rose from 2015 to 2016 amid the weaker economic environment.
Among males aged 25 to 54, the employment rate declined to its lowest since 2009. Growth in employment rate among older males aged 55 to 64 was flat. Nevertheless, there is no evidence of higher involuntary part-time employment. In addition, the incidence of discouraged workers remained low.
The median real income growth for the past five years was 3.1 percent per annum. Cumulatively, it translates to a 17 percent increase, from S$3,249 to S$4,056.
DBS senior economist Irvin Seah was quoted by TODAY saying, “The labour market is obviously softening but … still holding up. There are pockets of retrenchment but not mass retrenchments. Economic growth is weak, two-thirds of the economy is in technical recession, but we are not in a full-fledged recession yet. This is why, while there’s been pain in the labour market, we are still seeing modest wage growth.”
As Singapore economy undergoes restructuring, the higher employment rate this year translated to 68,400 residents on a seasonally adjusted basis. Labour economist Randolph Tan of SIM University said, “Whether we are going to be successful in restructuring will determine whether we can control unemployment and get a good performance in future as we have in the past. I don’t think it’s necessarily the case that we need to be content with a ‘new normal’ in unemployment.”
While PMETs remain less prone to unemployment than others, MOM notes that the gap has reduced in the recent years, with the unemployment rate for PMETs rising to 3.1 percent this year, up from 2.7 percent last year.
The traditional view that higher skills and education make up for a stable career, stands no longer true today. This is because specialised skills are what count and the demand for specialised skills can change rapidly due to economic and technological disruptions.