TL;DR – Should we worry?
MOM released its latest labour market report. Social media and mainstream media picked up the fact that the unemployment rate reached a seven year high. Some people will get alarmed. Some people will use that to say that Singapore isn’t in a good state.
Is that really the case? People who just read headlines probably will believe that. It takes some amount of critical thinking and effort to find out the whole picture. Let us try to unscramble it and make it easier to understand.
Yes. Unemployment did go up… marginally
The seasonally adjusted unemployment rate at June 2017 this year is 3.1%. The last time the unemployment rate was 3.1% was in 2010. But in those seven years, the lowest unemployment rate was 2.8% 2012, 2014, and 2015. Last year, the unemployment rate was 3.0%. So the increase in unemployment rate is really very marginal.
Also, we need to see the unemployment rate in the context of global economic situation. For developed countries, the unemployment rate is typically 4% to 12%. For instance, the unemployment rate of USA, Britain, and China is about 4%. Spain’s unemployment rate is 17.1%. In other words, Singapore’s unemployment rate is lower than most developed countries.
Median wages went up too
Over the last year, median wage went up by 4.3% to $4,232. After adjusting for inflation, median wages still went up by 3.7%. That’s faster than the rate of increase of median wage growth in 2016, when the median wage growth went up by 3.3% after adjusting for inflation. In other words, most of the Singaporean working people would have seen their wages increase faster than inflation. This means that their increases in wages will allow them to buy more things.
PMETs have had it better
The unemployment rate of professionals, managers, executives & technicians (PMETs) fell slightly from 3.1% in 2016 to 3.0% in 2017, after trending up from 2012. The long-term unemployment rate for PMETs also improved from 0.9% in 2016 to 0.7% in 2017. The share of PMETs among employed residents has trended up over the decade from 49% in 2007 to 56% in 2017, with a faster pace of increase since 2015. This suggested that enhancements to Adapt & Grow programmes which assist PMETs, especially those aged 40 and over, have helped PMETs secure employment.
On the other hand, the unemployment rate for non-PMETs rose in 2017.Among non-PMETs, the unemployment rate was higher for clerical, sales & service workers (5.7%) than production & transport operators, cleaners & labourers (3.6%), reflecting their faster staff turnover. In other words, if you are or know of any Singaporean working person who is a non-PMET in a clerical sales & service role, please go or encourage that person to go and make use of the various programmes in Adapt & Grow to reskill and upskill so that they can move towards PMET roles.
There are still good opportunities for Singaporeans
The overall picture shows that the employment opportunities for Singaporeans are actually quite good. With the economy growing and expected to continue growing at a similar pace, there remain good opportunities for Singaporeans. However, we need to continuously learn and upgrade ourselves so that we remain relevant to the changes of the structure of the economy.