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SINGAPORE: Singapore's structural unemployment problem seems to have worsened as the economy recovers from recession.
Government intervention and retraining of workers have kept the problem under control, but experts said a mismatch remains between skills of workers and the job positions available.
Structural unemployment occurs when the skills of workers do not meet the needs of employers. Such unemployment is typically long term and appears to be on the rise in Singapore.
Latest data showed that the number of people unemployed for more than 25 weeks is rising. Official estimates put the rate of long-term unemployment among residents in Singapore at 0.8 per cent as of March this year, up from 0.4 per cent last year.
Observers said this is the result of a structural shift in the economy where competition makes the skills of workers in lagging sectors redundant.
Irvin Seah, economist, DBS Bank, said: "When you have less orders coming in, revenues will fall and at the same time, costs have remained high. Therefore, the margins of companies have been squeezed. As a result, some companies will fade away, go out of business. Hence, you will also see retrenchments in some sunset industries."
The government has offered retraining programmes to get workers into new growth sectors such as the integrated resorts and healthcare. But the key issue is whether the workers are willing to adapt.
Andrea Ross, managing director, Robert Walters Singapore, said: "I think the topic is whether Singaporeans are willing to go into the roles that are available.
"If you were in financial services and were retrenched from a job as an office operations clerk, do you wait for another year for the market to recover and go back into that role? Or do you retrain and work in the casinos when they open?"
Experts said the current structural unemployment situation is still manageable due to the size of the Singapore market.
- CNA/so
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