Singapore to face rising unemployment

July 7, 2004
Singapore Democrats

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Associated Press
4 July 2004

Wealthy, high-tech Singapore faces a serious and growing problem of structural unemployment as older and less-educated workers struggle to find work, says a senior union leader, who is also a government minister.

“The new jobs that are coming onto the market, coming with new investments entering Singapore, are not suitable for workers, the older workers…who are less technically savvy,” said Matthias Yao, Deputy Secretary-General of the National Trades Union Congress, or NTUC.

Structural unemployment refers to those who can’t find work because they don’t have the skills. It affects most modern economies to some extent.

“There is going to be a lot of structural unemployment, and it is going to grow,” Yao, who is also a senior minister of state in the Prime Minister’s Office, told The Associated Press in an interview late last week.

Singapore has been more successful than many of its Southeast Asian neighbors at promoting growth – but Yao’s warning reflects official concern over the possible emergence of a group of less-educated “have-nots.”

Singapore’s union movement has close ties to the long-ruling People’s Action Party government. Unionists are sometimes ruling-party members of Parliament. The NTUC head usually holds a Cabinet post.

The country’s jobless rate for March, the latest figure available, was 4.5 percent – a high level in a society accustomed to extremely low unemployment.

The long-term jobless rate – those without work for at least 25 weeks – was 1.5 percent. The indicator, a useful proxy for structural unemployment, has climbed fivefold from 0.3 percent a decade ago.

Yao, who spent several years as a political adviser to Prime Minister Goh Chok Tong, said older workers need to be retrained – possibly in service jobs to meet the needs of highly trained, high-tech workers.

Singapore’s government has been aggressively trying to develop high-tech industries such as biotechnology in an attempt to promote growth.

The island of 4 million people, which has long enjoyed one of the world’s highest standards of living, faces competition in its manufacturing sector from other Asian countries such as China, where development is booming but wages remain relatively low.

Yao said unions – and the government – were also pressing companies to make their pay systems more flexible so monthly wages and annual bonuses can be swiftly adjusted to reflect changes in the economic climate.

“We have gone through several recessions, and we have found that if wages are not flexible enough, companies will take the easier way out to manage their manpower costs, which is to retrench people,” he said.

SDP: How much more “flexible” must wages be before workers become destitute?

More significantly, after more than 40 years of uninterrupted control by the PAP which had the complete freedom to mould the education system, control labour, and design the economic system, why is Singapore still facing structural and rising unemployment?

Didn’t the PAP tell Singaporeans that if we gave up our political rights and allowed the Government an unbridled hand to manage the economy, it would ensure that Singaporeans would be well-take care of?

Isn’t this a damning admission that the PAP has failed to deliver on its promise? More importantly, isn’t it the clearest sign yet that Singapore needs to open up its political system in order revive its economy – something that the Singapore Democrats have been saying for years?