PMETs and degree holders among hardest hit by weak labour market

Leong Sze Hian

Despite a slight increase in GDP in the third quarter of this year, Singapore’s labour market, as well as the earnings and productivity of resident workers have not recovered.

A report released yesterday by the Ministry of Manpower reveals a surprising trend – it seems that PMETs and degree holders were among the hardest hit by the poor job market in the period from September 2008 to the same time this year, even more so than residents with secondary education.

Both degree holders and secondary-school educated residents – which include Singaporeans and Permanent Residents (PRs) — registered above-average increases in unemployment rate with the former increasing by 1.67 times while the later by 1.58 times, said the Labour Market Third Quarter 2009 Report.

Mature residents aged 40 and over also posted larger increase in unemployment rate over the year than those in their 30s or younger. Mature residents made up about half (49% or 41,000) of the resident job seekers in September this year, up from 2008 (45% or 25,300). In fact, the number of mature resident job seekers had increased by 15,700, or 62 percent, compared to a year ago.

Perhaps the older or more educated you are, the harder it was to get a job.

SPUR ineffective for PMETs?

The share of Professionals, Managers, Executives, and Technicians (PMETs) among workers made redundant rose from 43% in Q2 09 to 51% in the third quarter, overtaking production & related workers (34%) and clerical, sales & service workers (15%) as the leading occupational group among redundant workers.

What this may suggest is that the call to re-train and upgrade skills and education by the government, spearheaded by the Skills Programme for Upgrading and Resilience (SPUR) initiative, might not have worked very well from the perspective of those who upgrade to become PMETs, since their redundancy rate is now the highest.

Slightly over one in three of the residents made redundant were in their 30s (34%) or degree holders (36%), disproportionately higher than their representation in the workforce (26% and 27% respectively).

This is in spite of the data in the report that “PMETs made up the largest share of vacancies (15,400 or 44%) in September this year, followed by production & transport operators, cleaners & labourers (9,900 or 29%) and clerical, sales & service workers (9,500 or 27%).”

So, although job vacancies available were the highest for PMETs, they had the highest redundancy rate and the largest increase in the unemployment rate.

The re-employment rate — those who were re-employed within six months of retrenchment — was quite low (37.3%) for those above 50 years old but even worse at 44.4% for degree holders.

While it was indicated in the report that Singapore’s real GDP grew by 0.6% in September this year from a year ago, following three consecutive quarters of contraction. At first glance, the growth might be seen as a sign that the economy might be showing the green shoots of recovery, but a deeper analysis reveals otherwise.

Overall labour market weak

Looking at the overall labour market, a rise in unemployment of 0.4% among residents June to September this year was registered. In the report, the rise is attributed to residents who had deferred their job search and pursued improvement courses amid the difficult job market.

The seasonally adjusted overall (which includes foreigners) unemployment rate rose slightly to 3.4% in September this year from 3.3% a quarter ago. The resident labour force rate – consisting of Singaporeans and PRs —  increased to 5.0% in September this year. This followed the decline from 4.8% in March to 4.6% in June.

However, the question of how the resident unemployment rate could increase from June to September remains unanswered. Workers undergoing training, or are not actively seeking jobs for more than six months, are left out of the unemployment statistics.

So, are we saying that these residents have now decided to start searching for jobs again because the job market is no longer perceived as difficult? Are lesser residents are pursuing courses?

Perhaps these factors could have led to the worsening of the unemployment rate, but there is no way to know for sure.

The report mentioned that “nevertheless, the unemployment rates were still below the peak (overall: 4.8%;resident: 6.2%) experienced in September 2003 due to the SARS outbreak.” However, this is akin to saying that it’s getting worse, but it’s not as bad as the worst ever! Some consolation for Singaporeans who are unemployed!

In fact, the seasonally adjusted figure for unemployed residents was 100,300 in September, higher than the 91,500 in June this year, which is around the time the recession began.

Earnings and income down while living expenses go up

Despite the good news in GDP growth, labour productivity fell over the year by 0.7% from the third quarter of last year, and nominal earnings – which do not take inflation into account — decreased over the year by 3.0% over the same period of time. After adjusting for negative inflation however, the decline in real earnings was 2.6%, deeper than the contraction in the preceding quarter

While earnings have continued to fall, HDB property taxes, HDB new flat prices, school bus fees, and other expenses have gone up.

In fact, real earnings have fallen for six consecutive quarters by a cumulative 17.9%, reversing almost all the gains in earnings for the last three years or so, in the first quarter of 2007.

While the educated and the older workers seem to be the hardest hit by the recession, the unemployment rate for cleaners, labourers and related workers was still the highest across all sectors in June 2009 at 8.3 percent, said the MOM’s Workforce 2009 report released earlier this year.

The above figures fly in the face of the argument that since Singaporeans do not want such jobs, foreign workers are needed to fill up the vacancies. If this is indeed the case, then why is it that the unemployment rate was the highest for this category?

What this may mean is that when residents who worked as cleaners and labourers lost their jobs and started looking for similar ones, they failed because younger foreign workers have generally replaced them in the food-courts and the airport toilets.

It seems that living conditions for the worst-off in Singapore have not improved significantly.

According to my calculations using data from the Department of Statistics’ Household Expenditure Survey Report (HES) released on 2 December 2009, the bottom 20% of households’ income declined by 0.3% in nominal terms from 1998 to 2008, and the 21st to 40th quintile households’ income increased by only 0.9% in real terms —accounting for inflation.

Marrying the latest MOM Labour Market report which has data until September this year, with the HES which has data until 2008, we can surmise that about 40% of households may hardly have had any real increase in income over the last 10 years or so.


Channelnewsasia’s report

Straits Times’ report

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