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12 February 2004
Amid worries about a jobless recovery in Singapore, a front-page headline this week crows: ‘Jobs on the rebound in Asia, surveys show’
It’s just the type of news that would make Singapore’s unemployed – numbering some 96,400 at last count in December 2003 – sit up. But chances are, despite the cheerier outlook and promising prognosis, Singapore’s jobless scene may not quite see a significant turnaround in the coming quarters.
To be sure, the economic outlook across the region has brightened considerably. Economists are calling 2004 Asia’s ‘Comeback Year’, when the region will re-assert itself as an economic dynamo. With vastly improved economic fundamentals – although many systemic problems remain – and strong expectations of rising currencies and rising prices, the East Asian and South-east Asian economies are widely forecast to do much better.
Not least, they are expected to continue to ride on the Chinese growth engine, benefit from an anticipated revaluation of the yuan, and earn by being export-competitive, not just against China but also the US and Europe.
This happy state of affairs will, logic goes, lead to a return of jobs in Asia, with recent surveys showing that hiring across the region is at its highest in over a year. Even among Singapore employers, hiring plans are apparently more aggressive than they have been in the past 11 quarters, says a report by Hudson Global Resources, an HR consultancy.
But what share of Asia’s new jobs pie will Singapore and Singaporeans – both the jobless and the employed-and-mobile – garner? Purely in terms of GDP growth, Singapore was the Asian laggard last year, growing barely one per cent when its Asean and East Asian neighbours grew an average of about 4.5 per cent. Prospects look better this year, with market forecasts for Singapore’s growth back up to region-wide average levels of about 5 per cent.
Still, when will the returns from the ‘look-good’ macro-indicators filter through in the form of more jobs, better pay, stronger spending (by both businesses and consumers), increased advertising, and such? Companies here are seeing better orders, but ‘vigorous’ hiring, or ‘meaningful’ job recovery, may still be 2-3 quarters away, analysts say.
It’s not just the theory about employment typically lagging the general economy, especially on the rebound; even tracking the jobless rate can be a bit tricky. The US unemployment rate, for instance, dipped to 5.6 per cent in January, after a 14-month low in December.
But economists said the decline isn’t good news: What’s driven down the jobless rate, they note, is a rise in the number of disheartened job seekers – people who, for one reason or another, have given up looking for work and withdrawn from the work force.
Singapore saw the phenomenon too last June when, despite a big contraction in employment, the jobless rate remained at the previous quarter’s 4.5 per cent. The proportion of ‘economically inactive’ residents – those not working and not actively seeking work – rose to 37 per cent (of all people 15 years and above) in June 2003, up from 34 per cent in March. Conversely, the employment rate had fallen to 59 per cent in June, from 63 per cent in March.
Fortunately, the jobless rate seems to have dipped to 4.5 per cent in December 2003, from 5.5 per cent in September, despite the entry of school leavers in the job market. The indicator warrants some closer study. But some figures remain troubling: the long-term unemployment rate – those jobless for at least 25 weeks – continued to climb last year, to 1.6 per cent by September.
If nothing else, the twin trends – a growing pool of economically inactive residents, which grew 1.9 per cent a year in the past decade to 918,000 by year 2000; and rising long-term unemployment – don’t bode too well for an economy on the mend.