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Job losses minimised in 2009, thanks to govt action (Asiaone 4 Jan)

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Job losses minimised in 2009, thanks to govt action

But with Jobs Credit scheme expiring in June, will bosses let go of redundant staff? -BT

Mon, Jan 04, 2010
The Business Times

By Chuang Peck Ming

THE list of casualties wasn’t as long as you might have expected from the worst global downturn since the 1929 Great Depression. By the time 2009 ended, about 20,000 workers had been laid off here, according to the National Trades Union Congress (NTUC).

And that’s less than the numbers in the previous two crashes – 29,080 during the 1998 Asian financial crisis and 25,840 during the 2001 Sars outbreak.

The jobless rate climbed to 3.4 per cent in September 2009 – still ‘full employment’ by most standards, and only half the 6.2 per cent peak in September 2003.

Prime Minister Lee Hsien Loong summed it up best. ‘The year 2009 has turned out better than feared,’ he told Bloomberg News.

Mr Lee was referring to the global economy – but you can say the same thing about the job market in Singapore.

While the world economy in 2009 sank to the depths reached in 1929, it didn’t stay down for long.

Recovery this time around was quick – thanks to governments worldwide acting as one to pump out massive sums of money to prop up tottering financial systems.

The worst was over by June 2009 – barely nine months after Lehman Brothers’ crash that sent the global economy over the edge.

The Singapore economy turned around in the second quarter, posting its first growth after four straight quarters of decline.

The recovery in employment, as usual, lagged economic recovery in general. But signs of a pick-up in hiring started to surface in June.

Recruitment firm Hudson and the Singapore National Employers’ Federation reported in the same month that employers planned to boost headcount.

Figures from the Ministry of Manpower show that in the July-September quarter, more than enough jobs were created to wipe out the job losses of the first two quarters.

It was a far cry from just six months earlier, when ministers, union chiefs and economists were warning of massive job losses ahead.

Manpower Minister Gan Kim Yong spoke of lay-offs and redundancies shooting up to the record levels of the previous two downturns – but that did not happen. And workers, who were primed to expect the worst, should be relieved.

Now, with things looking up, they are dancing to a more upbeat tune – and even looking at higher pay and bonuses in an anticipated state of high employment.

The changed mood is reflected in the labour movement, which recently declared victory in staving off record lay-offs and unemployment.

From saving jobs last year, NTUC is shifting gear this year to shoot for ‘full’ employment – and bring the jobless rate down to below 3 per cent.

There is plenty of cause for celebration for the labour movement, which has played a key role in cutting business costs and saving jobs. But it would be wise for NTUC leaders to temper expectations, lest workers feel let down at the end of the day.

While 2009 did not turn out to be as bad as feared, 2010 may not pan out as good as expected.

The economy did not collapse in 2009 – and job losses were minimised – mainly because of government action at home and abroad.

Many countries acted quickly and in concert, rolling out massive stimulus packages to revive the global economy, which softened the blow for small and open economies such as Singapore.

For its part, the Singapore government unveiled an unprecedented $20.5 billion package, with $4.5 billion devoted to a Jobs Credit scheme.

Jobs Credit helped employers keep excess workers. But with the scheme now downsized and due to expire in June, will bosses let go of redundant staff?

Jobs Credit was supposed to buy time – until the economy recovered. It has done that. But growth in 2010 is likely to be a modest 3-5 per cent – not enough to generate the record number of jobs seen before the latest recession.

Slowing the inflow of foreign workers, as the government has hinted it will do, may offer locals more jobs as the economy gets back on its feet. But many employers have held on to excess workers in the past year. And they may tap on these workers rather than hire new ones.

NTUC points out that the Singapore economy has become better at saving jobs in a downturn, thanks to a more flexible wage system.

But a flexi-wage model is good at just that – saving jobs. It is not meant to create them.

Job creation depends more on a thriving world economy. And unfortunately, the global economic outlook – despite recovery – is not all that rosy for 2010.

This article was first published in The Business Times.

 

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2 Responses to “Job losses minimised in 2009, thanks to govt action (Asiaone 4 Jan)”

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