The latest macroeconomic review report released by the Monetary Authority of Singapore (MAS) yesterday (April 27) warned Singaporeans about higher unemployment rate and lower wages this year as Singapore sink further into the recession. According to MAS’s estimates, wages growth will drop up to 1% in 2016.
Blaming “cyclical conditions” and “weakening external demands”, the Singapore government said that job losses will increase and GDP will also be “permanently lower” due to the ageing population.
“With lower labour demand and supply, total job creation this year is expected to stay modest. As such, overall and resident unemployment rates are likely to rise slightly in 2016. Redundancies could continue to rise in sectors facing weak external demand and undergoing restructuring.”
According UOB economist Francis Tan, wages will only increase for jobs where there are high vacancies. Other jobs which are easily supplied with foreign labour like F&B and retail will face stagnant wages.
“These sectors (F&B and retail) have been facing stagnation in terms of real wage growth as (they are) also low in labour productivity.”
A large percentage of Singapore’s elderly working in these sectors will likely be the first-line victims of the upcoming recession.
However, contrary to MAS’s employment report, Manpower Minister Lim Swee Say said that manpower would become the “bottleneck” for Singapore’s future growth in his May Day message. Minister Lim Swee Say is calling for more influx of foreign labour in what he called “good people”:
“In the future economy, even though there will be abundant supply of technology, capital and innovation, good people will always be in short supply. It is to the mutual benefit of employers, unions and workers, with the strong support of the Government, to work together to transform our limited manpower resources into our most valued human capital to drive our future growth.”