Friday, 2 August 2013

Leong Sze Hian analyzes the latest Govt’s unemployment figures

Unemployment rate increase?

Leong Sze Hian
I refer to the article “Singapore jobless rate rises to 2.1%” (Channel NewsAsia, Jul 31).
It states that “Singapore’s overall unemployment rate was 2.1 per cent in June 2013.
It was 1.9 per cent in March 2013 and 1.8 per cent in December 2012.

This is according to the Manpower Ministry (MOM) in its report on the employment situation for the second quarter of 2013.

Resident unemployment rate increase more?

The resident unemployment rate rose to 3.0 per cent in June 2013 from 2.9 per cent in March 2013 and 2.7 per cent in December 2012.

Singaporeans’ unemployment rate increase the most?

The unemployment rate for citizens increased to 3.1 per cent from 2.9 per cent in the preceding two quarters.”

Reading the above gives you the feeling that things have gotten worse on the unemployment front.

However, when you read that the unemployment rate for Singaporeans has risen from 2.9 to 3.1 per cent, it probably does not register much as to how bad things are, because the mind generally perceives a 0.2 per cent increase as perhaps “not very much”.

No number of unemployed?

I was curious as to why the media report did not mention the actual number of unemployed Singaporeans (only the increase in the unemployment rate was mentioned) or the non-seasonally adjusted unemployment rates.

So, I went to the Ministry of Manpower’s (MOM) web site to look at the full report.
83,000 residents unemployed?

The report does give the number of unemployed – an estimated 83,000 residents including 72,700 Singapore citizens were unemployed in June 2013.

Again, I found it rather strange that even the report does not give the number of unemployed a quarter ago (March 2013) – it only gives the unemployment rate in June and March.
When I read this, my sixth sense told me that perhaps the number (for March compared to June) may not look good.

Simultaneously 2 media reports – one not so good, one not so bad?

Also, on the same day, there was another article “S’pore in “relatively healthy state” with regards to jobs: Tan Chuan-Jin” (Channel NewsAsia, Jul 31), which said “He said Singapore will need to continue to create good jobs and opportunities by having quality growth and keeping the labour market diverse and dynamic. He added that at the same time, the playing field has to be kept level.

Mr Tan said tensions pull in different directions, but the balance needs to be managed so that things are ultimately better for people and society“.

Reading between the lines (of so many words) and from my experience – when two news reports come out almost simultaneously – one say not so good (unemployment  up) whilst the other says actually not so bad (“relatively healthy state with regards to jobs”) – my sixth sense told me that maybe its quite bad.

So, how do I satisfy my sixth sense to see whether I’m right or wrong – kind of like are Singaporeans being fed with the “right” kind of news which a Minister said recently in an international news TV programme that when Singaporeans read the news, we need to ensure that they read the “right” things (something along this lines)?

Well, I try to find the March unemployment number in the MOM web site lah!

22,700 more unemployed Singaporeans?

Lo and behold, the March number of unemployed Singaporeans was 50,000 (non seasonally adjusted). So, the number of unemployed Singaporeans increased by a whopping 22,700 or an alarming 45 per cent in the last quarter!

Why is this number so alarming? – Because if you look at the employment change in the last quarter – “employment creation, it increased to 32,500 in the second quarter from 28,900 in the previous quarter”.
32,500 jobs created, but 25,300 more unemployed residents?

So, does his mean that we created 32,500 jobs and yet another 22,700 more Singaporeans (25,300 in total if you count PRs – there were 57,700 and 83,000 residents (Singaporeans and PRs) who were unemployed in March and June, respectively), were unemployed?
Does this mean that only about 22 per cent of employment creation went to residents (only about 14 per cent for Singaporeans)?

Only about 1 in 10 jobs created went to Singaporeans?

So, does it mean that the bulk of employment creation went to foreign workers?

Tightening on foreign labour?

If so, then all the recent rhetoric about putting Singaporeans first and tightening on foreign labour do not seem to gel with the unemployment statistics.

As to “MOM said the tight labour market showed signs of easing as layoffs rose amid business restructuring and consolidation” – if the labour market is really tightening (in addition to healthy employment creation) – shouldn’t it be reflected in better unemployment numbers?

No logic?

In other words, it may defy logic that whilst employers find it harder to get Singaporean workers (as well as a lot of new jobs were created) – a lot more Singaporean workers have become unemployed?

Why not breakdown the statistics?

Of course, the easy answer to give us a clearer picture may be for the breakdown of the employment change to be given for Singaporeans, PRs and foreign workers.

Singaporeans’ unemployment rate increased a lot to 4%?

The fact that the non-seasonally adjusted unemployment rate for Singaporeans has increased much more from 2.8 to 4.0 per cent, compared to  the residents (including PRs) and overall unemployment rate (including foreigners), may give us a clue as to how bad things are on a relative basis for Singaporeans relative to PRs and foreign workers.

Damn hard to try to figure out what’s really happening? 

(Note: You won’t be able to find the non-seasonally adjusted unemployment rate for Singaporeans in the subject media reports or the subject MOM Employment Change Second Quarter Report which talk about the seasonally adjusted unemployment rates only – you have to search and find it in the MOM web site – Perhaps another example of reading the “right” things, is it?)

“Relatively healthy state”?

In the final analysis, is “Singapore is in a “relatively healthy state” with regards to jobs for its people” or arguably “more hazy with the PSI level getting higher”?
Uniquely Singapore!

Leong Sze Hian
Leong Sze Hian is the Past President of the Society of Financial Service Professionals, an alumnus of Harvard University, Wharton Fellow, SEACeM Fellow

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