Fired before the first day on the job

Saturday March 21, 2009
Fired before the first day on the job

INSIGHT DOWN SOUTH
By SEAH CHIANG NEE

The rapid disappearance of jobs has become the biggest single problem for Singapore, next to the economic crisis itself.

YOU’RE hired ... sorry, I mean fired – headlined a recent story concerning Singapore’s worst job slump for graduates.

It described the plight of a final-year economics student who lost her job in an American bank that was offered to her last November before she graduated.

She was one of at least three others from the National University of Singapore who were similarly “retrenched” by troubled firms – even before they had done a single day of work.

She had planned to spend her first pay cheque on a holiday to Europe. Instead a letter arrived revoking her job.

For this island state, the rapid disappearance of jobs has become the biggest single problem, next to the economic crisis itself. It affects all, from the highly educated to the uneducated.

But the biggest impact is felt by graduates, who make up more than half the number of the new jobless – and concerns are increasing.

In a survey of 100 graduating students who completed degree courses this year, more than half said they were afraid of heading into the real world, a newspaper reproved.

Their concern has been proven to be sound.

The government has just announced that the number of unemployed graduates more than doubled last year to 14,800 in December from 6,200 a year earlier.

(For comparison, the local universities are graduating some 17,000 youths this year, with an estimated 8,000-10,000 more from foreign institutions.)

Degree and diploma holders form the biggest number of dismissed workers in Singapore. In the last quarter of 2008, half the retrenched were professionals, managers, executives and technicians.

New graduates are the worst affected. “They are all fighting for the same jobs and fresh grads are at a disadvantage compared with those with experience,” said bank economist Irvin Seah.

Adding to the tight market is the return of thousands who have finished studies abroad.

One of the 4,000 who came back from America said he might seek a job here because many US firms are shying away from hiring foreign nationals.

Singapore is in this straits because for more than a decade, it had joined others like China, Taiwan and Hong Kong, to significantly increase the number of graduates to meet a higher-skill economy.

Today, about 20% of the annual school cohort ends up with a degree, 40% a diploma and much of the rest with some form of technical certificate.

This higher education has helped to create the current middle-class Singapore, the richest country in Southeast Asia, with 90% of the citizens owning homes.

In better times, a married couple with general degrees and three

years working experience could

earn a combined S$7,000-S$8,000 (RM17,000-RM20,000) a month.

But as recession set in last year, thousands have become unemployed and many others are working with reduced wages – working shorter weeks or taking pay or bonus cuts.

It is a national dilemma.

Unless graduate unemployment is reversed, the middle class here faces erosion and social problems and poverty could set in.

Out-of-work graduates are unable to service their home payments or maintain their family. More couples may decide not to have children.

When he was Prime Minister during the early days of university-building, Lee Kuan Yew had said that Singapore would avoid countries like India, in producing too many jobless graduates.

With an able mind and higher expectations, too many of them would sit idly around coffee shops hatching revolutions, he explained.

For the first time, the government has announced a scheme to offer subsidies to recession-hit banks and financial firms which take on new graduates – probably as an intern programme.

Those firms would be given subsidies for the recruits’ allowances for up to a year, if they take in a minimum – possibly 10 – of new graduates. If the recession worsens, the scheme could be extended to other major corporations, one executive said.

“It will help companies to build up their talent pool and better position themselves when the economy picks up in the long run,” said a bank official.

Job risks remain very high as the economy heads for a forecast 5% fall in 2009, particularly in hardest-hit finance, manufacturing, airlines, shipping and retailing.

In the face of all these, Singapo-reans have become more pessimistic than resource-rich Southeast Asian countries about how long they can survive without a job.

A survey by insurance group, AIA says only 19% think they could go more than two years without their main source of income, compared with 27% last year.

Trade and Industry Minister Lim Hng Kiang has assured Parliament that more than 30,000 jobs would be created this year, enough to absorb the pool of fresh graduates and new job seekers.

Most retrenched are resilient, fitting into a lower job – but not without problems. A graduate who applied to be a bus conductor was rejected because he was over-qualified. Another trouble is competition from foreigners who have a higher qualification and a lower pay expectation.

A Singapore engineer (diploma) was recently retrenched from a S$2,600 (RM6,300)-a-month technical sales job, which was taken over by a Myanmar post-graduate who accepted a pay of S$1,500 (RM3,600).

The graduates crisis is not only reducing Singapore’s middle class, but also the population itself.

The next two years may force the exit of 200,000 unemployed foreign workers (and 100,000 locals), says Credit Suisse. This could mean the total population will fall by 3.3% to 4.68 million by 2010.

Given the deepening economic crisis “maybe a smaller Singapore will be better,” commented a letter to the press.

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