Non-resident workers account for 100% of job growth in 2Q 2024: MOM labour report

According to the Labour Market Report for Q2 2024, released by Singapore’s Ministry of Manpower (MOM), total employment increased by 11,300 jobs in the second quarter. However, non-resident workers accounted for all of this growth, while resident employment—comprising both Singaporeans and permanent residents—declined by 600. The job growth was largely driven by Work Permit holders in Construction and Manufacturing, sectors where residents are less inclined to work due to the lower wages and physically demanding conditions, especially in light of Singapore's rising cost of living. Despite ongoing efforts to boost resident employment, structural challenges remain. The MOM report noted that residents are generally not keen to take up these lower-paying, labor-intensive jobs, leading to a continued reliance on non-residents for filling such roles. Underemployment and Retrenchment Challenges The report also highlighted a slight rise in time-related underemployment among residents, from 1.9% in Q1 2024 to 2.2% in Q2 2024. This refers to residents who are employed part-time but would prefer to work more hours, indicating some level of job dissatisfaction or mismatch between available opportunities and their needs for full-time work. Retrenchments increased from 3,030 in Q1 2024 to 3,270 in Q2, with Professionals, Managers, Executives, and Technicians (PMETs) and older workers among the most affected. More than half (55.0%) of residents retrenched in Q4 2023 managed to find new jobs within six months. However, a significant portion of these workers had to accept lower wages. Of the residents who were re-employed, 41.4% had to settle for jobs that paid less than their previous roles. This figure is derived from the fact that 58.6% of re-employed residents managed to secure jobs with the same or higher wages. Therefore, the remaining 41.4% took up jobs with reduced pay. Even more concerning is that only 32.2% of all retrenched residents were able to find jobs with wages comparable to or better than their previous positions. This figure is derived from the re-employment rate (55.0%) multiplied by the proportion of those who secured similar or higher wages (58.6%), highlighting that less than one-third of retrenched workers ended up in roles offering similar financial compensation. Re-Employment Struggles for Older Workers Older workers, particularly those aged 40 and above, faced even greater challenges. The re-employment rate for residents aged 40 to 49 dropped from 60.6% in Q1 to 54.4% in Q2. For workers aged 50 to 59, the re-employment rate saw a sharp decline from 52.8% to 41.6%, indicating that older workers not only faced difficulties in securing new roles but were also more likely to accept jobs with lower pay. This situation reflects broader trends where older workers often struggle to match their previous earnings when transitioning to new jobs, contributing to financial strain, especially given Singapore’s high cost of living. Non-Resident Employment Drives Growth Non-resident employment increased by 12,000 in Q2 2024, mainly driven by Work Permit holders in Construction and Manufacturing. These sectors continue to rely heavily on non-residents for jobs that residents are generally unwilling to take up due to the nature and wages of the roles. Resident employment saw some growth in outward-oriented sectors such as Financial & Insurance Services, Information & Communications, and Professional Services, but these gains were outweighed by seasonal declines in Retail Trade and Administrative & Support Services, resulting in a net decline in resident employment. The MOM report did not distinguish between Singapore citizens and permanent residents, so it is unclear how each group was specifically impacted. However, the fact that non-residents accounted for all job growth suggests continued challenges in attracting residents to certain sectors. Tight Labour Market and Job Vacancies The labour market remained tight in Q2 2024, with the ratio of job vacancies to unemployed persons increasing from 1.56 in March 2024 to 1.67 in June 2024. Job vacancies held steady at 81,200, while unemployment rates improved slightly. The overall unemployment rate fell to 2.0%, and the resident unemployment rate dropped to 2.7%, with long-term unemployment among residents remaining low at 0.8%. Despite the high number of job vacancies, the declining re-employment rates among retrenched older workers and rising underemployment rates indicate ongoing difficulties in matching available jobs to residents' skills and wage expectations. Impact of Foreign Workforce Policies The MOM report also reflects the impact of foreign workforce policies aimed at raising the quality and standards of non-resident workers. Declines in Employment Pass (EP) and S Pass holders were seen in several sectors, in line with government efforts to raise qualifying salaries and reduce reliance on foreign workers for mid-skilled positions. However, the continued growth in non-resident employment, particularly among Work Permit holders, suggests that Singapore still depends on foreign workers to fill roles that residents are not willing or able to take up, especially in sectors offering lower wages.