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How many PMET jobs can S'pore support?

This story was first published in The Straits Times on May 14, 2013

THE traditional route to success in Singapore has always been to do well in school and snag a scholarship to study in a prestigious overseas university.

Even if the grades do not merit a scholarship, most parents still want their children in university at least. After all, a degree opens doors to an office job, preferably one that pays well.

This expectation is likely to intensify, according to the population White Paper released in January, which said that most workers will be in a position that requires more brains than brawn.

"Overall, two-thirds of Singaporeans will hold (jobs as professionals, managers, executives or technicians) in 2030, compared to about half today," it stated.

But is this an unrealistic expectation? Will there be enough of what are called PMET jobs for this growing group of Singaporeans?

Great expectations

THE problem with setting out estimates so clearly is that it anchors people's expectations.

The two-thirds estimate can be easily read in this way by many people: The majority of citizens here will have a cushy job in 20 years' time that pays well.

But a check with the Manpower (MOM) and Trade and Industry (MTI) ministries showed that the two-thirds figure was not a projection but rather an estimate based on the expected rise in the levels of education and the kinds of jobs such graduates are now working in.

"It was a supply-side estimate based on the projected educational profile of Singaporean workers in 2030 and historical education to occupation trends," said the ministries in a reply to The Straits Times.

"The actual number of PMET jobs available will depend on companies' demand."

In other words, the two-thirds figure is an indication of Singapore's aspirations rather than a projection of how many of us will be in such jobs.

This changes things dramatically. It essentially means that the country could well be on course for a fundamental mismatch in aspirations and what the economy can meaningfully deliver.

Growing vulnerabilities

IT IS not surprising why many Singaporeans prefer to be on the paper-chasing career path. Degree holders tend to get higher starting salaries and have better promotion prospects.

Bachelor of Arts graduates from the National University of Singapore commanded gross median starting salaries of $2,825 a month last year.

In contrast, the gross median starting pay of a polytechnic graduate was $2,007.

Data does not exist for how fast a degree holder rises up the ladder, but anecdotally, they tend to advance faster than non-degree holders in the same company.

The gap in pay and prospects has naturally led to the rapidly changing education profile of the labour force, largely reflecting the demand for higher qualifications.

In 2002, just 18.5 per cent of the labour force had a degree. This had gone up to 29.4 per cent last year.

Most degree holders will eventually hold white-collar jobs and join the ranks of PMETs, which formed 52 per cent of the labour force last year.

But while getting a degree is now seen as a must-have, the simple fact is that being a white-collar worker comes with its own set of risks.

Globalisation and technological progress have undermined much of the middle class in advanced economies.

Offshoring and technologies like the Internet have displaced workers in the middle, such as sales and administrative staff.

Sales counter staff are now irrelevant for companies such as Amazon, which sells billions of dollars worth of products through its Web portal.

Salaries of the middle class have stagnated and many have been laid off amid the jobless recovery in the United States and Europe.

Singapore's middle class, or the PMET group, faces similar stresses.

An MOM report on the labour market last year suggested that PMETs are becoming increasingly vulnerable even though they continue to earn good wages.

Last year, 11,010 workers lost their jobs, a 10 per cent rise from 9,990 workers the year before, the MOM said. About 5,960 of them were PMETs, or more than 50 per cent.

This was significantly higher than the 41.7 per cent in 2011. In 1998, just 18.6 per cent of those laid off were PMETs, about a third of last year's figures.

Similarly, the re-entry rate for workers who have been laid off was much worse for the PMET group, with just 48.6 per cent of them finding a job within six months of being laid off.

In contrast, clerical, sales and service workers had a 60.2 per cent rate of re-employment, while production, cleaners and labourers had a 68.6 per cent re-employment rate.

The two-thirds challenge

APART from helping to address the vulnerabilities of the PMET group, the bigger challenge is providing jobs that meet aspirations.

That goes to the question of whether Singapore can continue to attract foreign investment and whether local enterprises will keep expanding.

If the economic restructuring now under way succeeds, productivity will rise and higher-value enterprises can grow and generate worthwhile jobs.

"If we make good progress with economic restructuring into higher-value activities across industries, we should see a broad-based increase in PMET jobs for Singaporeans," said the MOM and MTI.

The second part of the solution is harder to achieve. Many capital-intensive industries require a strong knowledge base and specialised skills that a general university degree may not provide.

A case in point is Dyson, a British manufacturer. It opened a $100 million plant in February that produces four million motors a year.

The motors produced at its Pioneer Crescent facility are used in the production of Dyson's vacuum cleaners and hand dryers.

Yet, the factory requires only 13 operators, while the bulk of the work is done by 50 or so robots.

This points to the dilemma for policymakers, says DBS economist Irvin Seah.

While productivity and high-value enterprises are good for the economy in terms of pure growth numbers, they may not generate the kind of levels of employment required to absorb the growing ranks of degree holders.

Then there is the skills gap. Increasingly, employers demand abilities that go beyond academic content.

Nee Soon GRC MP Patrick Tay, the professional, managers and executives unit director at the National Trades Union Congress, notes that even traditional jobs will require a high degree of skills.

"Increasingly, we can see those with highly specialised and niche skills getting jobs more easily. The challenge for workers is more than just getting a diploma or degree qualification but rather, the type of diploma or degree qualification," he says.

Changing attitudes

BEYOND thinking about skills and industries, a fundamental rethink on what defines success is also essential.

Mr David Leong, managing director of PeopleWorldWide consulting, says the economy as it is now could not support having two-thirds of the workforce in PMET jobs.

"If the Government hopes to achieve having two-thirds of the local workforce to be PMETs, we need to reconfigure job receptacles and industries to accommodate the growth and aspirations of Singaporeans," he says.

Many new graduates harbour ambitions to join the well-paid finance and banking sector, but in the future, the biggest demand is likely to be in the social, health and education services as Singapore ramps up its social infrastructure.

Likewise, transport and physical infrastructure will continue to be essential industries, but these sectors do not attract Singaporeans and remain dominated by foreign workers.

A big issue is pay, says Mr Leong. Pay enough and there will be people lining up to do the job.

But jobs in transport and construction are seen as being of low status and so pay is some way behind traditional PMET sectors such as banking and sales.

But this is not set in stone.

In Australia, electricians, bricklayers and plumbers can earn A$100,000 (S$124,000) or more a year, given shortages in manpower, according to the Master Builders Association in Victoria.

If pay does rise, can Singaporeans rewire themselves to take up the abundance of opportunities in sectors not traditionally seen as providing coveted careers?

Maybe the largest employer here can help take the lead.

While it is justifiable for the civil service to pay and hire people based on their paper qualifications, surely there are some jobs where technical expertise and experience trump educational profile? Is there an over-reliance on paper qualifications?

Parents will also have to adjust their own expectations of their children and recognise that success is not simply linked to degrees and cushy jobs.

These are not easy changes to make. But the sooner society realises that traditional notions of success are less relevant in tomorrow's world, the better prepared the next generation will be for the new economy.

aaronl@sph.com.sg

This story was first published in The Straits Times on May 14, 2013

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