On Monday (3 February), the Minister of Manpower Josephine Teo said in Parliament that new citizens have actually a negligible effect on Singaporeans’ unemployment rate.
She said this in response to a question raised by the Workers’ Party Non-Constituency MP Leon Perera, who asked to what extent do persons who are employed and become new citizens in each year affect the determination of the citizen unemployment rate.
Mrs Teo pointed out that this figure is according to the Labour Force Survey, which asks for respondents’ citizenship in the survey but do not require them to tell when they got their citizenship.
As such, it is not possible to break down the unemployment rate based on the duration of citizenship, she noted.
Despite that, she went on to explain that the addition of new citizens does not alter the local unemployment rate in any significant way.
“Suppose the citizen unemployment rate is 3 percent. This means, if there were only 100 citizens in labour force, three of them are unemployed,” she said.
She added, “Suppose one new citizen, who is employed, is added to the labour force. This translates to a 1 percent growth in the citizen labour force. There are now 101 citizens in the labour force, but still only three who unemployed.”
“As a result, the citizen unemployment rate falls by 0.03 percentage points to 2.97 percent. Compared to 3 percent, the effect is mathematically very small.”
The Minister also highlighted that out of 3.5 million Singapore citizens, significantly less than 1 percent got their citizenship within the past year.
She explained that some are working adults, while other have not join the working world just yet or have retired.
“This means that the impact to the citizen labour force and unemployment rate is essentially negligible,” she noted.
Earlier on 30 January, the Ministry of Manpower (MOM) released preliminary employment data showing that the annual average unemployment rate for Singaporeans rose to 3.3 per cent last year, up from 3 per cent in 2018.
The overall unemployment rate including PRs and foreigners, however, is lower. It also rose, from 2.1 per cent in 2018 to 2.3 per cent last year.
In total, 55,200 more people, excluding foreign domestic workers, were employed in Singapore over the course of last year, the highest annual growth since 2014. The issue of whether Singaporeans have access to good jobs was discussed in Parliament recently. MOM released a paper last week which showed that the employment rate of Singaporeans has risen over the past decade.
“We must remember the context of better-than-expected employment growth and the absence of a spike in retrenchments. When you put the three together, this suggests that the challenge is not primarily lack of job creation but possible job-skills mismatches,” said Ms Teo.