A study by Oxford Economics has forecast that Singapore's labour supply will shrink by 1.7 percentage points in the 10 years through 2026, and by 2.5 percentage points in the following decade, after accounting for changes to the participation rate (Singapore faces double whammy in labour supply: Study; Sept 7).
The decline of our total fertility rate (TFR) below the replacement rate of 2.1 since the late 1970s and the rapid ageing of the population have led to the labour shrinkage. At a recent conference, the International Monetary Fund said that Asia's population is ageing faster than anywhere else in the world (Ageing population will slow Asia's growth: IMF; Sept 8).
With Asia as our main source of foreign labour, a rapidly ageing population would pose a constraint on the supply of our foreign labour. Competition for foreign labour would be keener.
Singaporeans should not take these developments lightly.
Increasing subsidies and assistance for raising babies is unlikely to raise our TFR very much.
If we understand that a shrinkage in the local labour force is an eventuality that we cannot reverse, we must be prepared for an increase in the influx of immigrants and foreign labour.
As a result, Singapore will become more diverse in race, language, religion and political persuasion.
We must prepare our young to be proficient in key Asian languages, learn more about the people and geography of the region and be tolerant of people from different backgrounds.
Singaporeans should embrace the influx of foreigners and interact with them in daily life.
Albert Ng Ya Ken