SINGAPORE: The seasonally adjusted resident unemployment rate rose from 3 per cent in June 2016 to 3.1 per cent in June this year, according to the latest figures released by the Ministry of Manpower (MOM) on Thursday (Nov 30) in the Labour Force in Singapore Advance Release 2017 report.
However, the employment rate for residents aged 25 to 64 continued to increase, from 80.3 per cent to 80.7 per cent during the same period. For residents aged 65 and over, the employment rate increased from 25.5 per cent to 25.8 per cent.
Still, MOM expects "population ageing and the higher propensity of youths to postpone entry into the labour force to exert downward pressure on the overall employment rate in the years ahead".
There was also a difference between the unemployment rates for professionals, managers, executives and technicians (PMETs) compared to non-PMETs.
The unemployment rate for PMETs fell slightly from 3.1 per cent in June 2016 to 3 per cent in June 2017, and their long-term unemployment rate also improved from 0.9 per cent to 0.7 per cent in the same period.
MOM said this could have been due to enhancements to programmes that assist PMETs, especially those aged 40 and over, in securing employment.
However, unemployment among non-PMETs rose in 2017 from 4.2 per cent in June 2016 to 4.5 per cent in June this year.
These workers found it harder to secure a job with the continued decline in non-PMET job vacancies, MOM said.
However, Jaya Dass, country director at Ranstad Singapore, said this would not remain the case for the overall labour market for long.
"In the last two years, what the market has experienced is actually structural unemployment. It's not an overall technical recession," said Ms Jaya.
"People who are affected by the industries which haven't seen a recovery – oil and gas, marine and construction – I think individuals in those areas are using this opportunity to upskill themselves into new areas," she added.
"So what we're expecting to see in 2018 is that the overall economy shifts out of its structural unemployment phase."
The long-term unemployment rate for non-PMETs remained unchanged at 0.7 per cent.
INCOME GROWTH UP WITH IMPROVEMENT IN ECONOMY
According to the report, the median income of full-time employed residents, including employer CPF contributions, rose faster year-on-year by 4.3 per cent in June 2017 compared to 2.7 per cent in June last year in nominal terms, and 3.7 per cent compared to 3.3 per cent in real terms.
This was due to the improvement in economic conditions and demand for higher-skilled manpower, MOM said.
Irvin Seah, senior economist at DBS, said the improvement in the economy will help boost wages going forward.
"Now when the orders start coming in and businesses start to pick up, that’s when bosses will start to increase their hiring. After the increase in hiring, you will gradually see some tightening in the labour market," Mr Seah said.
That is when wages will start to rise, he added.
"So, typically, this is the kind of transitions you will see from GDP growth eventually to labour market."
Mr Seah further said that the improvement in unemployment rate figures for PMETs indicate that “the worst is over” for the labour market. He said that though there will be further improvement looking ahead, it will probably be at a “gradual pace”.
Over the last five years from June 2012 to June 2017, real income at the 20th percentile grew at a sustained pace of 4.2 per cent per annum, faster than the median of 3.4 per cent per annum.
The growth was supported by Government initiatives to raise incomes of low-wage workers, MOM said. Real income growth for both groups were significantly faster than in the preceding five years, it added.
"For real income growth to be sustained, firms will have to continue to transform and grow to become more productive. In a manpower-lean environment, it is also important for firms to adopt progressive human capital practices. They will have to invest in their workers and build inclusive workplaces to value every employee regardless of age, gender and qualification," the Manpower Ministry said in a press release.
MOM said that the Government will also need to press on with efforts to help low-wage workers be better deployed, allow older workers to remain in employment longer and make more flexible work arrangements available, especially for those with caregiving responsibilities.
NTUC assistant secretary-general Patrick Tay said in a Facebook post that the rise in employment among those aged 25 and over, the decrease in unemployment for PMETs and the rise in median gross monthly income show that tripartite initiatives in the employment, employability and skills upgrading of workers are showing positive effects.
However, he said he still foresaw "structural challenges (in) the coming years" including those as a result of digital disruption, digitalisation, robotisation, mechanisation and artificial intelligence.
"Moving ahead, the tripartite partners (nationally and sectorally) need to work even more closely together as we operationalise the various industry transformation maps that are being launched to transform the 23 sectors," he said.
Additional reporting by Brandon Tanoto.
Editor's note: A previous version of this story said that the unemployment rate was the highest since 2010. This is incorrect. The unemployment rate declined from March to June this year.