The unemployment rate in Singapore may appear low by international standards, but it is seriously under-reported. Due to the lack of employment benefit, many people do not bother to report that they are looking for work.
Minister of Manpower Gan Kim Yong advised graduates to take any job, rather than sit at home. But, where are the jobs? There are insufficient jobs for the large number of people looking for work. Those with jobs work long hours, to justify their cost to the employer. This is the outcome of the free market system.
If we continue to believe in the free market and in globalisation, it will take a long time for a solution to be found. The free market system has finally broken down, and yet economists and policymakers do not want to face the reality that it is a failed system.
We need a better system (other than the free market) to distribute the work among the people in the world in a fair manner. This will give a better quality of life to all people.
Tan Kin Lian
14 comments:
It is unlikely that the unemployment rate is under reported for the reasons given above.
The methodology used by MOM to calculate the unemployment rate follows the international standard used by all UN member countries ( member countries are supposed to follow a standard methodology when calculating key national statistics).
Every quarter, MOM does the Labour Force survey. The unemployment rate is calculated based on the responses. From the MOM web site, a person is unemployed if:
Unemployed Persons
This refers to persons aged 15 years and over who were without work during the survey reference period but were available for work and were actively looking for a job. They include persons who were not working but were taking steps to start their own business or taking up a new job after the reference period.
The more likely reason it appears usually low is that the unemployment rate is calculated for the resident population. This means Singaporeans and PRs. The large number of PRs in Singapore creates a upward bias. This is because to qualify to become a PR, you need to have a job and meet certain minimum income requirements.
Hence the apparent contradiction. On one hand, you hear lots of ad hoc stories of Singaporeans who are unemployed and cannot find work. On the other hand, we see very low unemployment rates.
Hi Aurvandil
Thank you for clarifying my misconception about the calcuation of the unemployment rate in Singapore. I will have to modify my views on this matter in the future.
Kin Lian,
You said the "free market system" failed. Tell us which system will never fail?
The system is Ok. It is the government and the greedy people make it fail.
We need a better system (other than the free market) to distribute the work among the people in the world in a fair manner.
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While certainly appealing, we should not judge policies based on which "creates more jobs". This is the well known "broken window fallacy" in economics.
To create jobs is very simple. Deactivate all the ATM machines in Singapore, that will create many jobs in banks.
But is that we want to do?
I disagree on the free market system failure part of the post. It has not fail, the problem is in Singapore where we don't have a safety netfor the people. The CPF is useless as most Singaporeans can't take out the money. I also feel that advising graduates to take blue-collar jobs is very bad advice. Ahy would any young Singaporean want to go to a university if they have to take a blue-collar job upon graduation?
Kelvin Tan's suggestion is a bad example of creating jobs. There are many ways of creating jobs that give value to customers and enhances customer service. For example, more customer service officers should be employed so that customers do not have to queue for a long time, and also calls to hotlines are answered promptly and well.
Many companies reduce manpower, resulting in a drop in customer service and long waiting time for customers. This is a bad outcome.
We also need more people to be employed to inspect markets (for hygiene) and to do the policing work, so that people do not break the law. By cutting down the manpower, we have a lower standard of public service and order. There is no point in having unemployed people when essential services are neglected.
While certainly appealing, we should not judge policies based on which "creates more jobs". This is the well known "broken window fallacy" in economics.
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A fallacy is something which is incorrect.
How then does a fallacy prove that there is nothing wrong with the free market system?
If the free market system is indeed "perfect", how do we account for the current mess that the global economy is currently in?
What else needs to happen to convince us that markets which are completely free would only lead to abuse and then collapse?
I think some people still don't know the seriousness of these recession.
When these jobs are lost, they don't come back as quick. We're talking about many small businesses going out of business. These business take years to grow. These are the businesses that create jobs. Same applies for departments in big companies going down.
The job market will only pick up when the businesses pick up first.
My suggestion for any umemployed graduates is a tough one, start a business. There's no such thing as no ideas with so much time to think. There's no such thing as no resources when you're so much time to think of how you can get finance.
If I'm unemployed right now, that will be exactly the thing I'll do. In fact, I'm already doing it, slowly.
Gan is giving bad advice due to his inexperience in the real world. A manager who reported to me before has left the company to become a teacher. Now he wants to go back to becoming a manager but without success. He was talking to me the other day and I told him the last job and last pay is an important consideration for any potential employer. If Gan were to be out of work and opted to become a taxi driver, when the economy recovers he would find it very difficult to get a management job again with a higher pay. Employers considering him for a management position will not be thinking how proactive he is in getting some work during recession but thinking how he can justify a 1000% pay jump and how a taxi driver can become a CEO or director in their company. I worry for Singapore when we have such calibre leader as our minister.
Dear Mr. Tan,
You asked "Where are the jobs?"
Actually there are many jobs around except employers prefer to employ foreign talents instead of Singaporeans because of the cheaper salary. I can understand if we need foreigners to do certain jobs that locals shun, street & coffe shop cleaners,maids,
construction work, and so on.... but do foreigners really attend telephone calls better than locals? are they better customer service staff?
Try calling some of our big organisations like Singtel, Starhub, major banks and chances are you will be speaking to foreigners. Can't our local girls do such jobs. I read in the papers recently about foreign drivers engaged here to delver goods. Do they really know our roads and its rules better than locals?
Why allow work permits for such employments?
So there you are, Sir, jobs are available except foreigners have first priority because of their cheaper pay.
There is nothing wrong with the free market. If you feel the United States economy is representative of free market, you are very wrong, its economy is characterised by one of the most interventionist government. So, the fiasco you see now with their economy has got nothing to do with the free market,there is no free market to begin with. The plight they are in now is due to the government excessive intervention and mismanagement of the economy. Please visit the authoritative Austrian Economics website - Ludwig von Mises Institute http://www.mises.org/ to learn sound economics. Mainstream economics thoughts such as those of the Keynesians and Monetarists are popular and most people are familiar with them and their policies, such as stimulus and interest rate manipulation. But these popular economics are extremely flawed and dangerous to the economic welfare of the population in general. Currently, they are so well known and widespread in their influences precisely because they have received the blessings of government and special interest group that vigorously promotes them over the past several decades. The policies that these economics advocate and the economic ignorance of the general populace will serve to benefit these parties tremendously, at the expense of the general populace. I am sorry if i sound like a conspiracy theorist here, but at this moment, there is so much misinformation and mis-education on the the economic thinking in the people. People feel that inflation is a reality and part and parcel of life, some even go so far as to say some inflation is actually good for the economy, people take business cycles for granted, they feel it is part of the evil free market economy, people feel that government stimulus packages are the elixir and only government help can steer the economy out of the depths of recessions. All these are not true. I used to believe that they were true also until i encountered Austrian Economics. Please devote your time and effort to get acquainted with Austrian Economics and dispel the many economic fallicies surrounding us today. For a start, you can begin reading the book Economics in One Lesson by Henry Hazlitt.
Hi! Everyone. Although I am not Singaporean, I would like to share my views on free market as a citizen of Hong Kong because I saw similarities between HK and SG.
Here in Hong Kong, many people from various industries work very long hours to justify their value, same as what the blog writer suggested in his article. Thus, many people are too stressful and uneasy. In some extreme cases, some even had to go to see doctors after experencing very long months of unemployment.
University graduates are advised to do any sorts of job here. But indeed, even some found a job, they are sacked immediately without prior notice or any forms of symptoms.
It's not about whether the free market market is good or not, but it's about the serious cost we have to pay for implementing such system at the time of financial crisis.
Has the recession leveled off? Nonfarm payroll employment continued to decline in April (-539,000), and the unemployment rate rose from 8.5 to 8.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today, April 8, 2009. Since the recession began in December 2007, 5.7 million jobs have been lost. In April, job losses were large and widespread across nearly all major private-sector industries. Overall, private-sector employment fell by 611,000. The details of the report can be found here. http://pfx.me/l2
Think we are talking about Job Sharing here. I fully agree that we should share our jobs.
I was working in a company handling more than 10 projects concurrently. So many meetings and have to come back office late in the evening to clear paperwork.
I do not mind taking half the projects and half the salary.
But, do bosses think this way? They half your salary but number of projects still the same.
Job sharing will give us quality of lives. More time to pursue our hobbies.
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