Reuters
13 July 2003
Singapore’s unemployed and new graduates face a bleak future looking for work as another 20,000 are expected to join the jobless queues this year in the wake of the sharpest ever slump in GDP in the June quarter.
Like many new graduates, Aaron Chong expects to be out of work soon. Chong, 25, trained as a journalist, but is now employed part-time handling public relations for a hospital.
“You tend to lower your expectations for salaries and job satisfaction. You no longer have the idea of an ideal job,” said Chong.
He said only 20 to 30 percent of his classmates are in permanent jobs and he feels his chances are increasingly remote.
“Graduates are taking it easy, going on holidays first. They are under the impression that they’re not going to get a job anyway,” he said.
Singapore’s jobless rate is forecast by the government to climb past 5.5 percent this year from 4.5 percent in March as more companies downsize and others relocate to cheaper locations.
A one percent increase in the jobless rate would increase the number out of work by around 20,000 to around 110,000, or about one out of every 18 people in a total workforce of around two million.
The export-dependent Singapore economy is stumbling out of its steepest quarterly decline ever as businesses from restaurants to transport companies reel from the effects of the flu-like SARS outbreak and the Iraq war.
In the clearest picture yet of the damage, data this week showed gross domestic product shrank at an annualised rate of 11.8 percent in the April-June quarter, the worst on record.
Economists expect that wage cuts, often used to dig the economy out of trouble without major job losses, would do little to save jobs and that the jobless rate would worsen in the coming quarters.
In May, the government approved proposals by the National Wages Council to cut wages at firms directly-hit by the SARS outbreak and freeze salaries at all other companies.
“The job market is unlikely to see any improvement in the second half as it will take time for excess capacity in the economy to bleed out,” said Lee Wee Liat, economist at DBS Bank.
Wage cuts not much help
Lee said the wage cuts will not prevent all job losses, but they will help to retain some jobs.
“Improvement is not possible until the economy stabilises. The creation of jobs will come about three to four quarters after the economy improves, which will be sometime in the first half (of 2004) at the earliest,” Lee said, forecasting a jobless rate of around 5.2 percent in the second half of this year.
Song Seng Wun, economist at brokerage GK Goh, said that most private companies have already cut jobs following the Asian financial crisis and that government-linked companies were catching up. Song said by the end of June this year, the unemployment rate would have approached 5.0 percent.
“You are looking at more graduates joining the labour force and businesses are still trimming. The swelling of the ranks of the unemployed is likely to continue to climb,” Song added.
State firms cutting too
State-controlled Singapore Airlines cut 414 jobs in early June or 1.5 percent of its 29,000-strong payroll. Its 1,600 pilots agreed to a 16.5 percent wage cut, but industry sources said the wage deal was unlikely to prevent further job losses.
PSA Corp, the state-owned container port, announced in February it would cut 800 jobs or 14 percent of its workforce.
At the El Patio Mexican restaurant in area of Singapore normally bustling with expatriates, turnover has revived from the depths of SARS, but its manager says fewer people are eating out because of economic uncertainty.
Hussini, who was retrenched herself not long ago, typifies how most workers and companies operate these days.
“I’m a manager in this restaurant but I’m also cleaner, accountant and I help in the kitchen,” she said.