No quick relief for fussy Singaporeans

No quick relief for fussy Singaporeans

Bernice Han, Agence France-Presse, Singapore

Singapore's unemployment woes are not expected to ease any time soon, despite a growing flow of economic data indicating the recession that straggled the country last year is easing its grip, economists said.

Apart from the expected time-lag effect -- which sees retrenchments continue for months after a recession ends -- the changing face of Singapore industry means the majority of jobs lost will never return, they said.

As a result, as the city-state emerges from the worst downturn in its 37-year history people will have to get used to a higher unemployment rate than ever before, said Standard and Poor's MMS economist Pamela Wong.

"The economic growth of Singapore will not be as robust as before so we have no choice but to accept a higher unemployment rate," she said.

Fueling the problem are sweeping structural changes as Singapore Inc. seeks to retool itself in the face of stiffer competition from regional countries offering a cheaper cost base.

"What we need to come to grips with is these jobs will not return. They are now in the cheaper areas of Asia especially China," said Standard Chartered Bank economist Joseph Tan.

Pampered Singaporeans, who have a reputation for being notoriously picky when it comes to jobs, are being forced to face up to a deteriorating labor market.

"The worst is yet to be. Unemployment itself is a lagging indicator and we are going through some of the structural changes even as the economy recovers," said economist Tan Khee Giap from the Nanyang Technological University.

Nowhere is the loss of competitiveness felt more acutely than in the manufacturing sector where several multinational companies have uprooted and moved to other Asian countries, particularly Malaysia and China, where labor costs are much cheaper.

Manufacturing remains a pillar of the state's economic health, contributing to nearly a quarter of gross domestic product (GDP), but the government is investing billions of dollars to develop new sectors such as life sciences and chemicals.

However, such efforts will not yield overnight success, forcing the government to constantly remind people that guaranteed employment is no longer a reality.

"The belief in lifetime employment is a thing of the past," says Home Affairs Minister Wong Kan Seng.

"We do not have the luxury of time and must move fast to get rid of such kind of thinking. Companies and investors are very mobile these days and they go to where they can ensure profitability and survival of their business."

A ministry of manpower survey of 2,311 Singaporeans retrenched last year showed only 54 percent were willing to work in less favourable conditions, while 25 percent said they had rejected job offers for that reason.

At the same time 83 percent were willing to take a pay cut just to be employed, while 90 percent were prepared to change industry.

The clear message being that "having favourable working conditions appears to be an important consideration for job seekers," the ministry said.

But finding the right conditions will not be easy, with Minister of State for Manpower Ng Eng Hen telling parliament last week that "job creation continues to be weak" even though the rate of retrenchment is moderating.

In the first quarter to March, 4,857 workers were laid off, about half the level recorded in the preceding two quarters, said Ng.

Data computed from the first two months of the second quarter showed Singapore's GDP grew 3.2 percent from a year ago, marking the first year-on-year rise in 15 months.