Singapore faces the spectre of rising long-term structural unemployment as the economy recovers from the global financial crisis. Structural unemployment occurs when the skills of workers do not meet the needs of employers.
With certain sectors such as manufacturing and electronics lagging behind, Singapore workers will have to be retrained to be employable in new industries such as the gambling industry.
The government’s timely interventions in the form of job credit scheme has helped to keep retrenchments and unemployments to a minimum and lessen the impact of the recession.
However, some workers may find their life-long skills and expertise redundant in a different economic climate blighted by the relentless influx of cheap, foreign labor.
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.
With no retrenchment benefits or minimum wage to safeguard the interest of workers, they will have to constantly upgrade themselves to stay irrelevant in Singapore’s competitive labor market.
The blue-collar workers will be hardest hit as their jobs, which are labor-intensive in nature can easily be taken up by foreigners willing to work for longer hours at lower pay.
Foreign workers make up almost a third of the population and their increasing numbers have led to concerns and angst among the locals.
Despite the prevailing sentiments on the ground that there are too many foreigners living and working on the island, the government shows no signs of reneging on its pro-foreigner policy to cut back on the numbers.
Foreigners drive up the prices of HDB flats which hit a peak lately. Still, the government insists that HDB flats remain “affordable” as Singaporeans use less than 30 per cent of their monthly pay to finance the mortage loan.
In view of the uncertainty ahead, Singaporeans should think twice before committing themselves to a long-term financial liability. Nobody is guaranteed a job for life in Singapore and one can find himself replaced by a foreigner the next day suddenly without prior warning.