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Long-term unemployment rises: MOM

SINGAPORE — Three in 10 unemployed residents here could not find work after more than six months in September — the highest proportion for the period in 14 years, the Ministry of Manpower’s latest labour market report showed on Tuesday (Dec 13).

The long-term unemployment rate for citizens and permanent residents rose from 0.6 per cent to 0.8 per cent between September last year and September this year, the highest for the period since 2009. Photo: Reuters

The long-term unemployment rate for citizens and permanent residents rose from 0.6 per cent to 0.8 per cent between September last year and September this year, the highest for the period since 2009. Photo: Reuters

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SINGAPORE — Three in 10 unemployed residents here could not find work after more than six months in September — the highest proportion for the period in 14 years, the Ministry of Manpower’s latest labour market report showed on Tuesday (Dec 13).

Meanwhile, the long-term unemployment rate for citizens and permanent residents rose to 0.8 per cent in September, compared with 0.6 per cent last September. The long-term unemployment rate refers to those without a job for at least 25 weeks. The spike was particularly pronounced among residents aged 50 and above, and those with diploma and professional qualifications. 

Economists and Members of Parliament told TODAY that several factors were at play, including predominantly older workers displaced by disruptive technology who are reluctant to accept jobs that pay lower wages, or who are not equipped with the skills to cope with new technology. 

MOM’s report on the job situation in the third quarter also showed a drop in the total number of people employed, and the number of layoffs for the first nine months of this year rose to the highest since the 2009 global financial crisis. Jobseekers continued to outnumber the vacancies available for the second quarter in a row, firgures showed.

Job redundancies for the first nine months of this year stood at 13,730. Layoffs, however, dipped between the second and third quarters, from 4,800 to 4,220. 

Based on Central Provident Fund records, which show employee-employer contributions to workers’ national savings accounts, the ministry said that nearly five in 10 (49 per cent) of residents laid off in the second quarter re-entered the workforce by the end of the third quarter. This is an improvement over the re-entry rate of 45 per cent at the end of the second quarter. 

Confirming the MOM’s preliminary estimates issued in October, the total number of people employed shrank for the first time since the first three months of last year, triggered by contractions in the manufacturing and construction sectors that affected mainly work-permit holders. 

In the first nine months of this year, total employment expanded by just 14,500, the slowest growth since the 2009 global economic crisis.

And in the job market, at the end of the third quarter, there were 100 jobseekers vying for 91 openings, down from 93 vacancies at the end of the second quarter, based on seasonally-adjusted figures. 

Seasonally adjusted, the overall unemployment rate was unchanged between the end of the second and third quarters, at 2.1 per cent. However, more jobseekers struggled to land jobs. 

In September, the number of citizens and permanent residents jobless for at least 25 weeks — numbering 17,600 — formed 30 per cent of unemployed residents, up from 23 per cent a year ago. Nearly seven in 10 (11,800) were aged 40 and above, and the majority of them (about 62 per cent) had degrees, diplomas or professional qualifications. 

As disruptive technology sweeps the economy, many jobs have been displaced, resulting in “sunset” industries, Mr Zainal Sapari said.

Mr Sapari, who is assistant secretary-general of the National Trades Union Congress (NTUC) and Member of Parliament (MP) for Pasir Ris-Punggol GRC, believed that mid-career professionals formed the majority of the long-term unemployed, and some of them were hesitant to explore “unchartered territory” in a different sector. 

Noting a mismatch in wage expectations, Mr Sapari said that it was “difficult” for workers to expect an income on par with what they earned previously if they move into a new field. However, given their experience and maturity, he was confident that they would adapt quickly and earn a wage commensurate with their skills over time.

Apart from the wage mismatch, United Overseas Bank economist Francis Tan said that older workers may not have the right skills to handle new technologies. Even for those with the right skills, there may be a glut of workers with the same skills that are in demand, since the number of vacancies and companies seeking to hire workers is limited, he added. 

As for the labour-market woes, economists observed that these are compounded by a sustained period of sluggish economic growth, which has made businesses more cautious about hiring.

DBS Bank senior economist Irvin Seah said that while there are tentative signs of the slump bottoming out, he does not expect the economy to pick up sharply, and the bleak labour market situation would likely persist at least until the middle of next year.

Mr Sapari encouraged those out of a job for extended periods to tap the various government schemes, including the Professional Conversion Programmes for mid-career switches. 

MP Desmond Choo, an NTUC director, said that besides getting workers to change their mindsets, companies should also accept workers who may not be fully trained and allowing them to learn on the job, to help them stay employed for longer and to raise productivity. 

“As Singapore companies, it’s not just about profitability, but the important role that they play in developing our workforce and strengthening our national social fabric,” he said.

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