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Thread: How inflation and uncertainty are marring the rosy job market

  1. #1
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    Default How inflation and uncertainty are marring the rosy job market

    How inflation and uncertainty are marring the rosy job market

    http://www.todayonline.com/pdf_open.asp?id=2106NLW006

    Christie Loh
    [email protected]

    WHEN Ms Natalie Boon, 22, started job hunting in April, the final-year student at the Singapore Management University was confident of landing a marketing or communications position by June, just before convocation. After all, friends who had begun their search about half a year earlier had had no trouble securing good jobs at big names.

    Unfortunately, the winds changed in a matter of months. June is giving way to July — and Ms Boon has yet to receive an offer after mailing out 30 applications. “I didn’t think it would be so difficult,” she told Weekend XTRA. “The job market just isn’t as rosy as before.” Madam Tan Siew Chin (not her real name), 56, wonders what a rosy market feels like. The office cleaner’s monthly salary of $980 hasn’t risen by a single cent for the past two years, when corporate profits swelled and economic growth surged on paper. But when it comes to the prices of rice, cooking oil and clothes, she has certainly noticed that they’re all going up and up.

    Inflation and a growing uneasiness about the global economy’s health are
    creeping into what has been a golden period for the local labour market.
    Thanks in part to a booming China, trade-reliant Singapore bounced back
    from the downturn of 2003, the year blighted by the Sars outbreak. The next four years saw the tiny island churn out way more jobs than there were retrenchments, repeatedly smashing records. Last year’s creation of 235,000 jobs was unprecedented.

    The latest labour-market report, released by the Manpower Ministry earlier
    this week, shows no let-up: January to March set a new all-time quarterly
    high of 73,200 new jobs, most of which were for services (see table).
    So, what’s troubling about this glowing picture?

    The same report card suggests a growing number of people, such as Mdm Tan and Ms Boon, sitting in shadows. They may be having difficulties
    finding a job, struggling to stay employed or watching inflation eat into
    their pay increments, if any. “It’s a bit of a mixed bag right now,” CIMB-GK economist Song Seng Wun said of the labour market. Job creation remains strong due to the commitment of several mega projects such as the upcoming Integrated Resorts, which pulled the construction industry from the doldrums.

    But the unemployment rate and the number of layoffs also started marching
    upward last July (see chart). This coincided with the onset of a global
    credit crunch sparked by huge mortgage defaults in the Western banking sector; some firms went belly up as they were unable to secure fresh cash from nervous lenders. With the spine of the economy in pain, business sentiment has inadvertently taken a hit even in non-finance, Asian circles.

    Hiring continues, but more selectively. “Companies are taking longer to
    make hiring decisions because they are going through more in-depth approval channels on hiring requisitions and they are prioritising certain critical positions over less-critical positions,” said Mr Tim Hird, director of the Singapore operations of Robert Half International, a New York-listed recruitment firm.

    Now may appear more like the employer’s market than that of the recruit
    who, a year ago, was spoilt for choice and showered with offers of fat pay cheques. Today, not only is the credit crunch weighing on financial markets and economies, governments and their people are also fighting inflation — the new Public Enemy No 1. Crude oil has crossed the previously-
    unimaginable level of US$130 per barrel, pushing up the prices of a wide
    range of goods and services, including electricity. Freak weather and natural disasters have also disrupted crop supplies and raised food prices.

    Couple stubborn inflation with decelerating economic growth due to the
    credit crisis and the world is caught in the “perfect storm” known as stagflation. It’s the dilemma dreaded by policymakers more used to dealing with one or the other, not both at the same time.

    In Singapore, the central bank has been allowing the currency to strengthen in order to ease the effects of inflation. But the masses are still feeling holes in their pockets. Based on the Ministry of Manpower
    (MOM) report, inflation ate into the spending power of workers in manufacturing — which hires one-fifth of the economy’s labour force — transport and administrative sectors.

    As an example, the manufacturing worker’s wage hike during the first quarter of this year averaged 4.3 per cent. That looks fine on the surface. But when you factor in the inflation rate, which hit a 26-year high of 6.6 per cent, you’ll find that the worker’s real earnings dipped 2.2 per
    cent, said the MOM. He didn’t actually bring home extra bacon. Psychologically, the effect can be damaging to morale. As it is, the manufacturing industry is synonymous with the nation’s painful
    restructuring phase. In fact, the story of electronics businesses moving lower-end services out of Singapore to cheaper locations isn’t quite done yet, said Mr Song.

    Three out of four of the retrenchments between January and March
    came from manufacturing. A similar proportion — 70 per cent
    — of total layoffs affected people in their 30s and 40s, the stage when they’ve taken on substantial financial commitments.
    “Generally, people are still concerned about their jobs especially those
    who are less-educated, less-skilled and over 40. It is especially so during this period of economic uncertainty and inflation,” said Singapore Human Resource Institute executive director David Ang.

    Mdm Tan was one of thousands handed pink slips over the years.
    Her 13-year career as a supervisor of electronics workers ended abruptly
    when the American firm that hired her here decided to shift to lower-cost
    neighbouring countries. She was willing to take a pay cut to work in the same industry, but doors would not open. That’s when she settled for a cleaning job four years ago.

    Still, Mdm Tan feels her rice bowl isn’t totally secure. Many Chinese and Myanmar nationals are cleaners here, she said in Mandarin, and “they accept salaries that are even lower than mine”.

    The hot-potato debate on foreign hirings surfaced recently when official data revealed that 61 per cent of the bumper crop of jobs created last year went to foreigners, up from 48 per cent in 2006.

    Economically speaking, the phenomenon is inevitable. For the economy to keep up its pace of expansion, more hands are needed and, Mr Song said: “There are not enough locals”.

    One solution the Government has come up with is to expand the labour
    force by gradually raising the shelf lives of the elderly. Come 2012, a law will make it compulsory for companies to offer re-employment to workers aged 62 up till they reach 65. The age ceiling will be extended later to 67.
    When passed, the legislation will, in a way, shield these older workers from economic downturns that could threaten their jobs.

    Looking at the present labour market, exactly how shaky is it? Mr Hird said he was “not overly concerned” because Singapore’s economy is still expanding at the expected pace of 4 to 6 per cent, which means continued demand for talent.

    Whether that pace of growth will be sustained will depend on whether
    inflation persists in eroding corporate profits into next year, said Mr Song.
    But ask him for his forecast on job creation this year and you get a good
    sense of where Mr Song stands. This year should see a similar number of new jobs rolled out as last year, he said.

    A whiff of optimism for the likes of Natalie Boon.

  2. #2
    Unregistered.
    Guest

    Default

    Quote Originally Posted by oxboy99
    How inflation and uncertainty are marring the rosy job market

    http://www.todayonline.com/pdf_open.asp?id=2106NLW006

    Christie Loh
    [email protected]sg

    WHEN Ms Natalie Boon, 22, started job hunting in April, the final-year student at the Singapore Management University was confident of landing a marketing or communications position by June, just before convocation. After all, friends who had begun their search about half a year earlier had had no trouble securing good jobs at big names.

    Unfortunately, the winds changed in a matter of months. June is giving way to July — and Ms Boon has yet to receive an offer after mailing out 30 applications. “I didn’t think it would be so difficult,” she told Weekend XTRA. “The job market just isn’t as rosy as before.” Madam Tan Siew Chin (not her real name), 56, wonders what a rosy market feels like. The office cleaner’s monthly salary of $980 hasn’t risen by a single cent for the past two years, when corporate profits swelled and economic growth surged on paper. But when it comes to the prices of rice, cooking oil and clothes, she has certainly noticed that they’re all going up and up.

    Inflation and a growing uneasiness about the global economy’s health are
    creeping into what has been a golden period for the local labour market.
    Thanks in part to a booming China, trade-reliant Singapore bounced back
    from the downturn of 2003, the year blighted by the Sars outbreak. The next four years saw the tiny island churn out way more jobs than there were retrenchments, repeatedly smashing records. Last year’s creation of 235,000 jobs was unprecedented.

    The latest labour-market report, released by the Manpower Ministry earlier
    this week, shows no let-up: January to March set a new all-time quarterly
    high of 73,200 new jobs, most of which were for services (see table).
    So, what’s troubling about this glowing picture?

    The same report card suggests a growing number of people, such as Mdm Tan and Ms Boon, sitting in shadows. They may be having difficulties
    finding a job, struggling to stay employed or watching inflation eat into
    their pay increments, if any. “It’s a bit of a mixed bag right now,” CIMB-GK economist Song Seng Wun said of the labour market. Job creation remains strong due to the commitment of several mega projects such as the upcoming Integrated Resorts, which pulled the construction industry from the doldrums.

    But the unemployment rate and the number of layoffs also started marching
    upward last July (see chart). This coincided with the onset of a global
    credit crunch sparked by huge mortgage defaults in the Western banking sector; some firms went belly up as they were unable to secure fresh cash from nervous lenders. With the spine of the economy in pain, business sentiment has inadvertently taken a hit even in non-finance, Asian circles.

    Hiring continues, but more selectively. “Companies are taking longer to
    make hiring decisions because they are going through more in-depth approval channels on hiring requisitions and they are prioritising certain critical positions over less-critical positions,” said Mr Tim Hird, director of the Singapore operations of Robert Half International, a New York-listed recruitment firm.

    Now may appear more like the employer’s market than that of the recruit
    who, a year ago, was spoilt for choice and showered with offers of fat pay cheques. Today, not only is the credit crunch weighing on financial markets and economies, governments and their people are also fighting inflation — the new Public Enemy No 1. Crude oil has crossed the previously-
    unimaginable level of US$130 per barrel, pushing up the prices of a wide
    range of goods and services, including electricity. Freak weather and natural disasters have also disrupted crop supplies and raised food prices.

    Couple stubborn inflation with decelerating economic growth due to the
    credit crisis and the world is caught in the “perfect storm” known as stagflation. It’s the dilemma dreaded by policymakers more used to dealing with one or the other, not both at the same time.

    In Singapore, the central bank has been allowing the currency to strengthen in order to ease the effects of inflation. But the masses are still feeling holes in their pockets. Based on the Ministry of Manpower
    (MOM) report, inflation ate into the spending power of workers in manufacturing — which hires one-fifth of the economy’s labour force — transport and administrative sectors.

    As an example, the manufacturing worker’s wage hike during the first quarter of this year averaged 4.3 per cent. That looks fine on the surface. But when you factor in the inflation rate, which hit a 26-year high of 6.6 per cent, you’ll find that the worker’s real earnings dipped 2.2 per
    cent, said the MOM. He didn’t actually bring home extra bacon. Psychologically, the effect can be damaging to morale. As it is, the manufacturing industry is synonymous with the nation’s painful
    restructuring phase. In fact, the story of electronics businesses moving lower-end services out of Singapore to cheaper locations isn’t quite done yet, said Mr Song.

    Three out of four of the retrenchments between January and March
    came from manufacturing. A similar proportion — 70 per cent
    — of total layoffs affected people in their 30s and 40s, the stage when they’ve taken on substantial financial commitments.
    “Generally, people are still concerned about their jobs especially those
    who are less-educated, less-skilled and over 40. It is especially so during this period of economic uncertainty and inflation,” said Singapore Human Resource Institute executive director David Ang.

    Mdm Tan was one of thousands handed pink slips over the years.
    Her 13-year career as a supervisor of electronics workers ended abruptly
    when the American firm that hired her here decided to shift to lower-cost
    neighbouring countries. She was willing to take a pay cut to work in the same industry, but doors would not open. That’s when she settled for a cleaning job four years ago.

    Still, Mdm Tan feels her rice bowl isn’t totally secure. Many Chinese and Myanmar nationals are cleaners here, she said in Mandarin, and “they accept salaries that are even lower than mine”.

    The hot-potato debate on foreign hirings surfaced recently when official data revealed that 61 per cent of the bumper crop of jobs created last year went to foreigners, up from 48 per cent in 2006.

    Economically speaking, the phenomenon is inevitable. For the economy to keep up its pace of expansion, more hands are needed and, Mr Song said: “There are not enough locals”.

    One solution the Government has come up with is to expand the labour
    force by gradually raising the shelf lives of the elderly. Come 2012, a law will make it compulsory for companies to offer re-employment to workers aged 62 up till they reach 65. The age ceiling will be extended later to 67.
    When passed, the legislation will, in a way, shield these older workers from economic downturns that could threaten their jobs.

    Looking at the present labour market, exactly how shaky is it? Mr Hird said he was “not overly concerned” because Singapore’s economy is still expanding at the expected pace of 4 to 6 per cent, which means continued demand for talent.

    Whether that pace of growth will be sustained will depend on whether
    inflation persists in eroding corporate profits into next year, said Mr Song.
    But ask him for his forecast on job creation this year and you get a good
    sense of where Mr Song stands. This year should see a similar number of new jobs rolled out as last year, he said.

    A whiff of optimism for the likes of Natalie Boon.
    IT IS GOING TO AFFECT PROPRTY MARKET BIG TIME. I SEE 40% DOWNSIDE BEFORE ANY RECOVERY.

  3. #3
    Dr. Dolittle
    Guest

    Default

    Quote Originally Posted by Unregistered.
    IT IS GOING TO AFFECT PROPRTY MARKET BIG TIME. I SEE 40% DOWNSIDE BEFORE ANY RECOVERY.
    Are you nut? The entire Singapore is enthusiastically waiting for the ppty prices to rebound in style now.

    I don't think you are a local. You comments sound very mad.

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