Singaporean society has evolved significantly within the span of two generations. The old doctrine which propagated the pursuit of economic growth at the expense of other societal aspirations is being increasingly challenged. Although a “growth at all cost” mentality is unsustainable and certainly undesirable in the greater scheme of things, certain aspirations may have to take a backseat in the current economic climate.
Warning signs ahead
According to the latest statistics released by the Ministry of Manpower (MOM), the Singapore labour market is experiencing a combination of two worrying phenomena. Firstly, fewer jobs have been created in the third quarter as compared to the second quarter. Secondly, the number of layoffs has increased by nearly 50 percent over the same period. Although Singapore’s unemployment rate remains low at 1.9 percent (2.8 percent for residents and Singapore citizens), there are fears that these two phenomena are indications of poorer labour market conditions ahead.
What are we facing?
The Singapore government has not been reticent about the situation as one can observe from its numerous premonitions of tough times ahead for the Singapore economy. The Prime Minister, in an interview with the Straits Times on Oct 10th, noted that the global (economic) outlook was still far from favourable and mentioned that he expects “growth of around 1, 2 percent” as well as the fact that “we don’t have a lot of margin for error”.
On the other hand, hiring in the private sector has shown signs of slowing down. The jobs available at NTU’s annual career fair his year fell from 3000 from 4500 the year before. In NUS career fair, the average number of jobs offered per employer declined from 29.17 in 2011 to 28.97 in 2012.
According to human resource consultancy PrimeStaff Management Services, companies, especially MNCs, will be more conservative in their hiring in the fourth quarter. It added that Singapore’s employment rate is likely to remain status quo but does not rule out the possibility of a slight increase in the fourth quarter.
In spite of the evidence indicating that our economy is facing a downward trend, the government has still maintained that Singapore is in a good position to face the economic challenges that lie ahead. However, it is important to note that this claim is mainly predicated on the assumption that Singapore’s job market remains strong.
In an interview on October 15th, Minister for Trade and Industry Lim Hng Kiang insisted that Singapore remains internationally competitive despite the sluggish economic performance. However, he qualified this statement by mentioning that this would only be the case if “Singapore’s labour market remains healthy, with strong employment creation and a low unemployment rate”.
Indeed, the Singapore job market as of now remains strong as compared to many other developed countries. For instance, unemployment levels have been rising all across the world. (Spain 25.8%, France and Italy 10.8%, EU , USA 7.8%, Japan 4.1%) In light of these statistics, our unemployment level of 1.9 percent is a healthy one. However, this may very well change given the current employment trends.
Hence, we can make two observations: first, we are facing the serious prospect of a weak labour market in the year ahead and second, if the above takes place, Singapore’s economic competitiveness will be severely compromised.
Given these circumstances, it would be wise to begin monitoring our expectations. This is because the way in which we approach certain policies will change depending on prevailing economic conditions.
For example, the foreign worker policy will certainly be re-examined. One way to keep unemployment figures low would be to ensure that individuals retrenched from MNCs will be picked up by out local SMEs, which now play a huge role in keeping the economy afloat. It should be noted that access to foreign labour is crucial for the survival of many SMEs. Therefore, it is of increased importance that the government does not cut back on foreign labour too aggressively as a steep increase in labour costs will cause companies to close down or at least scale down their operations, resulting in the twin effects of both unemployment and slower economic growth.
Also, in a healthy economy, social considerations such as overcrowding may play a huge part in the debate regarding our foreign worker policy. However, in an economic downturn, economic considerations become of paramount importance. This is something society has to come to terms with.
In another example, calls for better work-life balance may have to be revised in the near future. A key to escaping an economic downturn is productivity. In a market where unemployment is on the rise and hiring practices turn conservative, it is inevitable that companies will be pressured to make the most out of their current manpower. Singaporeans will therefore face a different set of expectations at the workplace and may not attain the kind of work-life balance they desire.
This of course does not mean that society has the permission to ignore all non-economic considerations and pursue economic recovery at all cost. Certainly, there is more to our society than economic progress. In fact, certain social policies take even greater priority during economic turmoil (eg. The provision of aid for lower income families most badly hit by the crisis).
However, it should be expected that when a trade-off between the two exists amidst perilous economic circumstances, we may be forced to bite the bullet and reorient our priorities in order to tide through this difficult period. The question that remains now would be: is our society is prepared for this?