Higher employment rate and faster income growth as labour market improves

Singapore's economy is expected to grow by 3 per cent to 3.5 per cent in 2018, at the upper end of an earlier forecast range of 2.5 per cent to 3.5 per cent.
Singapore's economy is expected to grow by 3 per cent to 3.5 per cent in 2018, at the upper end of an earlier forecast range of 2.5 per cent to 3.5 per cent.PHOTO: ST FILE

SINGAPORE - A greater share of younger and older Singapore residents was employed in 2018, and the average full-time worker enjoyed faster income growth, with the labour market improving as economic growth picked up.

The unemployment rates for resident workers, both professionals, managers, executives and technicians (PMETs), and non-PMETs, also dipped slightly as of June this year, compared with the same period last year.

The positive labour market outcomes this year were in line with good economic growth, said the Ministry of Manpower (MOM) on Thursday (Nov 29). Singapore's economy is expected to grow by 3 per cent to 3.5 per cent this year, at the upper end of an earlier forecast range of 2.5 per cent to 3.5 per cent.

The MOM released a report based on its Comprehensive Labour Force Survey, conducted in the middle of this year of Singaporeans and permanent residents.

Workers are earning more, with the median income for those working full-time rising to $4,437 in June this year. This is up 4.8 per cent from the median gross monthly income of $4,232 a year earlier and includs employer contributions to the Central Provident Fund.

Incomes also grew faster in the last five years than in the preceding five-year period. The real median gross monthly income of residents in full-time jobs grew by an average of 3.5 per cent per year from 2013 to 2018, taking preliminary inflation figures into account for this year. It grew by an average of 1.9 per cent per year from 2008 to 2013.

Economists said the strong wage growth this year may not continue into next year as economic growth is expected to moderate, though the impact will likely be very sector-specific.

“With a trade war I won’t be surprised if there are companies in finance or trade-related sectors that have to start cutting headcount,” said Maybank Kim Eng senior economist Chua Hak Bin.

Lower-wage workers had their gross monthly incomes rise at a faster pace than those at the median. Over the past five years, income at the 20th percentile for residents in full-time jobs rose by an average of 4.2 per cent per year, to $2,340 in 2018.

More people were in jobs this year. The employment rate for residents aged 15 to 24 rose to 34.5 per cent this year, up from 34.1 per cent last year, as more young people took on paid internships or vacation jobs.

The rate for those aged between 25 to 64 years old fell from 80.7 per cent to 80.3 per cent this year. MOM said the dip stemmed from more women in their 30s staying outside the labour force to care for their families.

The rate for those aged 65 and over rose to 26.8 per cent, up from 25.8 per cent.

“Efforts to improve the employability of older workers encouraged more to stay on, and those previously outside the labour force to return to employment,” said the MOM.

The unemployment rate for PMETs was 2.9 per cent in June, compared with 3 per cent a year earlier. For non-PMETs, the rate was 4 per cent, down from 4.5 per cent. PMETs now make up 57 per cent of the resident workforce.

However, more unemployed PMETs in their 30s and those aged 50 and up took a longer time to find work. This raised the long-term unemployment rate for PMETs to 0.8 per cent this year, up from 0.7 per cent last year.

This rate measures the proportion of the labour force who are jobless and looking for work for at least 25 weeks.

 
 

Also, a larger share of workers were on contract jobs. The share of workers in permanent jobs went down for the second consecutive year to 89 per cent this year, from 90 per cent last year.

MOM said this is because ongoing economic restructuring prompted companies to adopt a more near-term outlook, with much of the increase in contract employees seen among those on one-year contracts.

MOM said in a statement that Singapore faces the structural challenges of an ageing population and slower population growth, which are expected to cause growth of the supply of resident workers to moderate.

It called on businesses to invest in their workers.

“The MOM and Workforce Singapore will continue to work closely with unions, companies and jobseekers to address jobs-skills mismatches, match Singaporeans to good jobs and careers, and enable older Singaporeans who are able and willing to continue working to do so,” said MOM.