Published March 17, 2009

Job market pain takes on white-collar shade

3,790 PMETs made redundant in Q4 '08; 14,800 of jobless are degree-holders; manufacturing badly hit

By CHUANG PECK MING

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(SINGAPORE) A large number of white-collar workers have lost their jobs and more degree-holders have joined the ranks of the unemployed. Job losses hit a record quarterly high in the final three months of 2008 according to figures released yesterday by the Ministry of Manpower.

Redundancies nearly tripled from 3,180 workers in the third quarter to 9,410 in the fourth. The pain was most acute for professionals, managers, executives and technicians (PMETs). Some 3,790 of them were made redundant in Q4 compared to 950 in the previous quarter.

For the full year, MOM's Labour Market, 2008 report says that 6,200 PMETs were made redundant out of the 16,880 workers who suffered this fate. The total number of redundancies is a five-year high and comprises 13,920 retrenched workers and 2,970 whose contracts were ended early.

The jobless rate is rising, too and degrees offer little protection. In December 2008, there were an estimated 69,900 unemployed residents (the seasonally-adjusted figure is 73,200) of which 14,800 were degree-holders. This compares with 6,200 degree-holding residents - Singaporeans and permanent residents - who were jobless a year earlier.

Joblessness has grown for the least and most educated segments. While 21 per cent of the unemployed holds degrees, an even larger number - 21,300 or 31 per cent - had studied below secondary level. 'Consequently, long term unemployment for locals at both ends of the education spectrum more than doubled over the year,' the report says.

As of December 2008, 12,900 unemployed residents had been looking for work for at least 25 weeks. The unemployment rate climbed to a seasonally-adjusted 2.5 per cent in December, from 2.2 per cent in September and a decade-low of 1.7 per cent a year ago. The manufacturing sector accounted for 55 per cent of the job losses and financial services for 12 per cent of them.

Things are not going to get better on the jobs front, it seems. The report points to more employers expecting business conditions to worsen in the next six months. 'The hiring sentiment in manufacturing continues to be dismal with a higher net balance of 28 per cent of manufacturing expecting to reduce headcount in Q1 09, compared to 3 per cent in the previous quarter,' it adds.

Song Seng Wun, an economist at CIMB-GK, says the fourth-quarter job losses were only 'the first round of contraction', affecting mostly foreign and contract workers. 'There will be more cuts on the permanent staff in the next round.'

Mr Song also notes that manufacturing bore the brunt of the job cuts in the fourth quarter. There would be more cuts in the services sector, which has a bigger pool of workers.

Citigroup's Kit Wei Zheng says the government's Jobs Credit and other job saving schemes that would come into effect should soften the job loss ahead, but he still sees the number worsening from last year's fourth quarter.

'Companies have built up excess labour - and there's still plenty of fats to cut,' he says.

Last year had started strongly for employment, but faltered mid-way as the global credit crunch began to bite. The strong gains made in the early part of the year led to 8.1 per cent more jobs created for the full year. But the 221,600 jump in employment was lower than the 234,900 increase in 2007.

'Amidst the weakening global economy, employment growth slowed significantly to 21,300 in the fourth quarter of 2008, less than half the gains of 55,700 in the third quarter of 2008 and 62,500 in the fourth quarter of 2007,' the report says.

The slowdown cut across many industries. The manufacturing sector in fact shed 7,000 workers in the fourth quarter of 2008 - its first net job loss since the third quarter of 2003. Services employment continued to expand in the final quarter of 2008, but slowed sharply from 38,500 a year ago to 17,300. But restaurants, health & social services, arhitectural & engineering services and education and public administraion continued to post similar or higher job gains than in 2007.

Construction employment, which hit a record 64,000 in 2008, eased in the fourth of quarter, posting rise of 10,700, against average gains of 17,800 in the early three quarters.

Nominal earnings rose 2.4 per cent over the year in the fourth quarter, down from 5.5 per cent in the third quarter. For the full year, earnings were up 5.4 per cent, against 6.2 per cent in 2007. But after discounting inflation, real earnings dipped 1.1 per cent last year.

Labour productivity also dropped in the fourth quarter - down 12 per cent, against 9 per cent in the previous quarter.