Saturday 2 February 2013

More locals hired in 2012: Ministry of Manpower Employment Situation report

Number of foreigners on Employment Pass drops but more holding S Pass
By Janice Heng, The Straits Times, 1 Feb 2013

EMPLOYERS hired more locals and fewer foreigners last year as foreign manpower curbs continued to bite.

And for the first time in a decade, the number of foreigners working here on an Employment Pass (EP) has fallen. EP holders are hired on salaries higher than $3,000 a month.

Their falling numbers have, however, coincided with a sharp rise in the number of foreign workers holding an S Pass. These mid-skilled foreign workers earn more than $2,000.

These trends stood out in a year that saw businesses struggling with the tightest labour market in five years, figures from the Manpower Ministry showed.

The national unemployment rate fell further in the fourth quarter of last year to just 1.8 per cent - the lowest since 2007. In all, 129,600 more workers were employed last year. Of these, 59,200 were local - a significant rise from the 37,900 the year before.

In the face of stricter quotas and higher levies, foreign employment growth slowed to 70,400, down from 84,800.

Excluding construction and foreign domestic workers, the slowdown in the rate the economy added foreign workers was even more stark. Only 32,200 were added - about half of 2011's increase.

Acting Manpower Minister Tan Chuan-Jin said he was "personally heartened" by the numbers, which showed that employers are now more motivated to hire locals such as working-age women and older workers.



He said the drop in the number of EP holders was likely due in part to the tighter EP framework from January last year, which included better educational qualifications and higher qualifying pay.

He also singled out the sharp rise in S Pass numbers as "cause for concern", but noted that some of it comes from workers who were downgraded from EPs.

Economists from Barclays Research expect the tight labour market to persist. "We expect the unemployment rate to be about 2 per cent again this year. This will continue to put pressure on labour costs and, therefore, consumer prices for services that tend to be labour-intensive."

Credit Suisse economist Michael Wan said the bank sees "a tightening in the S Pass segment... as the next logical step".

Still, Mr Tan warned that Singapore should not expect low unemployment rates to be the norm. "As restructuring picks up pace in 2013 and the years ahead, we may see more unemployment as a natural outcome of job-seekers moving across jobs and industries."


Meanwhile, experts said that Singapore's employment numbers were probably lower than they could be, largely because of the current labour supply constraints.

Noting that unfilled job vacancies have risen, Mr Mark Hall, vice-president and country general manager of Kelly Services Singapore, said employment growth "would be higher if the local workforce was more willing to take on some of the hard-to-fill positions traditionally associated with foreign workers".

That was the case for bakery chain Bakerzin, which would have hired at least 20 more workers last year - if it could. "We just had to let go of a lot of projects," said chief executive Daniel Tay.




Real incomes of full-time Singaporean workers rose 1.2%
By Janice Heng, The Straits Times, 1 Feb 2013

REAL incomes of full-time Singaporean workers grew by 1.2 per cent last year - up from 1 per cent the previous year.

This was due to lower inflation of 4.6 per centand despite dollar incomes not rising as fast due to "weaker economic conditions", said the Employment Situation 2012 report of Manpower Ministry.

The median monthly income of full-time employed Singaporeans rose by 5.8 per cent, down from a 6.3 per cent rise the year before. Half of them were earning at least $3,248 last June, including employers' CPF contributions.

But inflation ate less into pay rises. Real median income thus grew 1.2 per cent last year, up from 1 per cent in 2011 when inflation was at 5.2 per cent.

Excluding rents from the inflation measure, as most workers own and do not rent their property, growth in real income was 2.1 per cent.

Figures released last December showed that median incomes for residents - that is, Singaporeans and permanent residents - rose more than for Singaporeans alone. The median monthly income for residents rose 7.1 per cent over the year to $3,480 in June 2012. This meant that real income for residents grew by 2.5 per cent.

Excluding assumed rents, residents' real income growth would have been 3.4 per cent.

Incomes have also been rising for full-time employed citizens in the bottom fifth of the population in terms of earnings. The income for that bracket was $1,647 last year, meaning a fifth of citizens earn that amount or less. This is up an average of 4.8 per cent each year since 2007, or an average of 0.9 per cent each year if inflation is taken into account.




Any further manpower curbs 'will hit businesses badly'
By Chia Yan Min, The Straits Times, 1 Feb 2013

THE largest business association here has warned that any further moves to curb manpower growth will result in "devastating consequences" for businesses, especially small local firms.

The statement, released yesterday, is the latest tough stance from the Singapore Business Federation (SBF), representing about 18,000 businesses. In December, it said tighter foreign worker policies could stifle economic growth and force businesses to close.

In its latest salvo, it said industries typically requiring many lower-skilled workers, like food and beverage, hospitality and retail, already face difficulties in hiring Singaporeans. With slower labour force growth, the hiring squeeze will worsen and firms will face higher costs and possibly close.

This will lead to more expensive goods and services and lower service quality levels, it warned.

"Many businesses will be in jeopardy if they cannot adjust to this demographic tsunami that will hit us. If businesses go under, jobs will be lost, Singaporeans will be affected," said SBF chief executive Ho Meng Kit.

The association was responding to projections in the Population White Paper, unveiled by the Government on Tuesday.

It projects that the labour force will expand at 1 per cent to 2 per cent a year from now until 2020. From 2020 to 2030, it will drop to 1 per cent a year. This is a fraction of the 3.3 per cent growth seen between 1980 and 2010. The White Paper also projects two-thirds of the local workforce will be in the professional, manager, executive and technical category by 2030.

SBF's Small and Medium-sized Enterprises (SME) Committee chairman Lawrence Leow said the labour force shifts will be "unimaginable" for many SMEs, many of which operate in labour- dependent service sectors, and SMEs unable to move operations offshore may go out of business.

"This in turn has an even wider implication as many multinational corporations here rely on SMEs for services and as part of their supply chains," said Mr Leow.

SBF also said the future economic growth rate projected by the White Paper hinges on steady productivity growth of 2 per cent to 3 per cent each year.

The White Paper projects yearly economic growth of 3 per cent to 5 per cent from now until 2020.

This might not be achievable if current productivity levels are not raised, and there is a risk that Singapore will descend into a period of weak growth, said SBF. "We urge the Government to delay further tightening of foreign worker restrictions until there is clear evidence of businesses succeeding in business restructuring and productivity increments," said Mr Leow.



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