Today MOM released its Q2 labour market report. Of course its tone was relentlessly upbeat meant to beguile Singaporeans into believing that the PAP are doing a good job of growing the economy and creating employment despite global economic headwinds mainly originating from China. However digging a little deeper into the figures reveals a less rosy picture. This showed that resident employment shrank during the quarter by 600 but non-resident employment expanded by 12,000. In the first half of the year total employment expanded by 16,000 but residents were less than a third of the total. Thia is not the whole picture since the figures do not distinguish between citizens and PRs and it’s entirely possible that resident employment growth was driven entirely by the creation of new PRs who are probably on average more likely to be younger and therefore more employable.

Most of the non-resident employment growth was in manufacturing and construction in low skill roles that Singaporeans are “not keen to work in”, according to MOM. , Expansion in low skill employment will almost cetainly drag down average productivity for the whole economy, diluting any productivity growth achieved in other sectors of the economy. This expansion in low skilled manufacturing jobs is behind MAS’s proclamation on 13 September that growth has picked up and is now likely to finish 2024 at the higher end of 2% to 3%. That means we can expect to see accelerated expansion of low skilled employment for non resident foreign workers in the second half just so that the PAP can proclaim proudly that they have succeeded in growing the economy above expectations.

It is true that the expansion in the non resident workforce will bring extra, though limited, consumption spending and benefit Singaporean-owned businesses, though again these are likely themselves to employ non resident workers rather than Singaporeans. However the increase in population will also drive up rents and thus, indirectly, prices for HDBs and may contribute to higher inflation more generally. Government revenues will rise, particularly because of higher employer levies and increased GST collection but the PAP have become practised at ensuring that any windfall will be saved rather than spent on the welfare of Singaporeans.

The latest employment report shows few signs that Lawrence Wong and the PAP are succeeding in transforming the economy to meet its “very ambitious” productivity growth targets, as he said in Parliament in his Budget round-up speech on 28 February 2024. He said then that “Singapore aims for annual growth of 2 to 3 per cent on average over the next decade, of which one to two percentage points should come from productivity improvements…This is a very ambitious goal. Only a few countries at our stage of development have been able to sustain such high productivity growth,” Instead the PAP appear to be reverting to business as usual of generating low quality growth by expanding foreign worker employment in low productivity areas whose value to Singapore is questionable. Singaporeans should not be so gullible.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam