Survey findings on underemployment show S’pore’s ‘graduate poor’ earn less than $2,000 a month

SINGAPORE — A survey, among the first of its kind, has revealed “worrying statistics of seriously underemployed Singaporean graduates”, in the words of a labour Member of Parliament (MP).

The survey conducted by the Lee Kuan Yew School of Public Policy and Ong Teng Cheong Labour Leadership Institute canvassed responses from 1,626 Singapore workers between August and November last year. It found that about 70, or 4.31 per cent, of the respondents were severely underemployed. These were degree-holders earning less than S$2,000 a month, despite holding full-time jobs.

The majority of them were from the health and social services (18 per cent), financial services (12 per cent), transport and education sectors (both 7 per cent). They were mostly female (63 per cent) with a median age of 35, and had 10 to 15 years of work experience.

While a small group, these graduates had fallen into “involuntary underemployment” by circumstances beyond their control, Mr Zainal Sapari, an assistant secretary-general with the National Trades Union Congress (NTUC), wrote in the labour movement’s blog on Tuesday (April 10).

“These are the ‘graduate poor’, and it is a black swan in our labour landscape,” he said.

The issue of graduate underemployment has surfaced repeatedly, but data has been scarce owing in part to the trickiness in defining underemployment.

Underemployment occurs when highly skilled workers take on low-paying or low-skilled jobs, as well as when workers willing to put in extra hours involuntarily work part time.

In recent years, MPs, including Mr Patrick Tay (West Coast Group Representation Constituency), have called for a re-examination of the conceptual definition of underemployment and how it is measured. Mr Tay, NTUC’s assistant secretary-general, had urged a comprehensive survey for the various sectors to grasp the required competencies and skills for jobs, and whether those holding these jobs were overqualified.

The Ministry of Manpower (MOM) uses a “time-related underemployment” indicator, which measures the proportion of part-time resident workers who want to work more.

Based on its 2017 Labour Force in Singapore report, the proportion of such underemployed workers rose from 2.7 per cent in 2016 to 3 per cent last year, after steady declines from 2011.

In response to queries, the MOM pointed out that the study cited by Mr Zainal “covered a  small sample size of less than 2,000”. In comparison, its Comprehensive Labour Force Survey involved a representative sample of 33,000 households. The findings of the ministry's survey were released in January, and showed that the proportion of full-time resident degree holders earning below S$2,000 in real terms declined from 3.7 per cent in 2007 to 2.3 per cent last year.

Nevertheless, it added: “We note the survey findings that a vast majority of these graduates are receptive to learn new skills to pursue better career opportunities. We urge them to approach Workforce Singapore (WSG) and the Employment and Employability Institute (e2i) for assistance.”

The MOM, WSG and e2i have been actively reaching out to jobseekers to offer employment support through the Adapt and Grow initiative, including through roadshows and working with the community, the ministry said. Under the initiative, individuals interested to switch careers can receive professional advice from career coaches, and be supported by the Professional Conversion Programme, for example, where they can be “placed with employers and equipped for new careers”, the MOM said.

FINDINGS ‘QUITE DISCONCERTING’

While some economists said more detailed analysis into the factors that led the graduates surveyed into underemployment was required, Mr Song Seng Wun from CIMB Private Banking said the study was helpful in shedding light on those who “fall through the gaps”.

Calling the findings “quite disconcerting”, OCBC Bank treasury research and strategy head Selena Ling said the results may point to issues of skills mismatch or suitability. While three-quarters of those underemployed said their firms recognised their educational qualifications, their skills could be “irrelevant or obsolete”, she added.

The problem could also be industry-specific as the bulk of the companies with underemployed individuals (64 per cent) served mainly the domestic market. Some small- and medium-sized enterprises, for instance, may not be able to pay competitive wages. Ms Ling also questioned whether those underemployed were in jobs that required more generic, rather than specialised skills, or whether they were underemployed because of individual circumstances.

Mr Song said the majority of the underemployed may be from private universities, which could account for the vastly lower salaries.

The Private Education Institute Graduate Employment Survey issued last week found that only one in two (47.4 per cent) private school fresh graduates secured full-time jobs six months after graduation — a sharp decline from 60.1 per cent for the previous batch.

United Overseas Bank (UOB) economist Francis Tan said involuntary underemployment was usually due to a mismatch between skills and jobs. Discrimination against the physically impaired could also be at play, as the survey found that the underemployed suffered more health difficulties than the other survey participants.

For instance, more than half of those underemployed (53 per cent) indicated that physical pain affected their work.

Noting that a variety of factors, such as scarce job openings, could have pushed them into underemployment, Mr Zainal said that the “underlying issue is that these graduates are not adequately paid”.

MORE HELP NEEDED FOR UNDEREMPLOYED

Mr Zainal urged more help for this vulnerable group, warning that graduate underemployment could become a “newly emerging structural problem demanding structural solutions”.

Long-term underemployment could also set a “vicious circle” in motion, because workers may lose the drive and confidence to update their skills and stay relevant.

While there are various programmes under the Government’s Adapt and Grow employment-support initiative, Mr Zainal questioned whether those underemployed are aware of these schemes.

Speaking to TODAY, he said there was a need to encourage severely underemployed graduates to come forward and seek help from career counsellors from the Employment and Employability Institute or Workforce Singapore, so that they can get support to apply for jobs.

“The Government can also incentivise employers to hire them through more wage subsidy,” he said.

He also added that employers should be encouraged to redesign jobs for those who are unable to perform certain tasks owing to health issues.

UOB’s Mr Tan, however, pointed out that this could be hard for smaller firms as they may need to hire a consultant for this purpose. There are greater economies of scale for larger firms such as multi-national companies to consider job redesign, he noted.

Ultimately, Mr Song said the onus lies with workers, as they should take advantage of the Government’s various retraining and placement schemes.

West Coast GRC MP, Mr Tay, said: “It is important for employers to recruit, hire, train, develop and promote based on skills and competencies. On the part of workers, it is important to pick up skills and competencies which are in demand so that they are constantly relevant to their companies, industry, and stay employed and employable.”