How S’pore’s Labor Market Protected Local Jobs During the Pandemic


Much has been said about Singapore’s resilience in the face of the economic woes caused by the Covid-19 pandemic – thanks in large part to its deep reserves that have provided the resources to keep the economy afloat, without forcing the government into debt to bail it out. Local citizens.

But there is another characteristic of Singapore’s economy that is largely under-appreciated and, ironically, often the object of contempt from some Singaporeans and local wannabe politicians: its job market.

Unemployment rate in Singapore
Manpower in Singapore in 2020 / Photo Credit: Ministry of Manpower

With the unemployment rate 3 percent overall and 4.1 percent for residentsThe country is the envy of the world, with rates at least two to three times higher at present.

Despite the severity of the crises, they are also lower than what the country experienced a decade ago, in the wake of the financial meltdown in the United States.

Learn from ‘handicapped’ countries

Rory Sutherland Ogilvy
Rory Sutherland, Vice President of Ogilvy UK / Image Credit: Mexy Xavier

Rory Sutherland, Ogilvie’s vice president and the man who devoted his life to the study of human behavior (turning him into a goldmine for the famous advertising agency), once remarked that to search for innovative ideas, you have to look to the extreme.

One of the examples he gave in an interview pointed out improvements in mobile devices and modern apps, and how it can pay to look at them as if you only have one hand.

How useful and accessible is it? How to make it simpler, smaller, thinner, etc. to make it easier to use if you can’t use your hands?

Examining such remote scenarios can lead to improvements for all users. This works well for entire countries as well.

You will find many wonderful ideas among those who have little or no unfavorable circumstances – as if they were, for one reason or another, handicapped.

Take Japan, for example. It is a country devastated by earthquakes, with few natural resources and yet one of the most developed and innovative countries in the world.

The same logic applies to Korea, Taiwan, and even Singapore, while resource-rich countries such as Russia, the Arab Gulf states and neighboring Malaysia are lagging behind. Their greater natural wealth did not translate into greater creativity. It’s actually quite the opposite of it; Make them satisfied.

The world was, after all, colonized by relatively small European states, which were competing with each other for resources and trade with the most distant – and most populous – lands in Asia.

Great Britain, the group of windswept rocks in the Atlantic Ocean, was not so long ago a transcontinental empire that the sun never set. A nation of 10 million people (about 1800) invaded India, humiliated China, whose number exceeds 300 million, and was the source of the Industrial Revolution that changed the planet.

Therefore, it pays to look to small nations – limited by geographic conditions and yet still doing well against all odds – for inspiration and what their successes tell us about future trends.

Singapore is such a country in many ways, but its immigration and labor market flexibility policies are rarely focused on.

Where does Singapore stand Divergence between East and West

When you examine labor markets, the developed world is now broadly divided into two groups of countries: Those who try and fail to embrace migration (Struggling to deal with the various social, political and economic consequences of importing millions of migrants), and Those who refuse or find it difficult to open up, Although they may soon be forced into it by circumstances.

The first group is of course, Europe and North America, which are experiencing an influx of much-needed immigration to their aging societies. However, it has proven highly problematic in his administration, leading to instability, crime, political polarization, and poverty.

Elderly workers in Japan
Aging of Japan’s Working Population / Image Credit: Financial Tribune

This contrasts with East Asian countries, such as China or Japan, which are aging at a rapid pace. However, due to their isolationist cultures, strong ethnic identities and difficult languages, they are not open to foreign immigration – which could lead to dire economic consequences in the future.

They will simply lack qualified labor, with an increasing number of retirees who will only consume, but will not produce anymore.

Singapore, a remarkably remote country, sits on both sides of this great divide. It is a developed mainly English-speaking country based in Asia, with a large local Chinese majority (about three-quarters of local citizens).

With the lowest fertility rate in the world, it is aging rapidly; However, they are open and welcome to immigrate to all social classes and from all destinations, as long as they have the required skills and a job offer.

Its calculated comparison has created a mosaic of ethnicities, cultures, and religions – easily the most multicultural country in the world – and it is also the world’s safest and most prosperous country. You have already achieved what no one else has achieved.

Prioritize job security for Singaporeans

Before the pandemic, out of the country’s 5.7 million people, only 3.5 million were citizens.

The remaining 40 percent consisted of various groups of immigrants – permanent residents, eligible work permits and passport holders, as well as lower categories of work-passport holders, including maids and construction workers.

Singapore has limited space, so it can never afford the generosity of the vast open borders that Europe or America have experienced. As in the example I mentioned above, you should only work with one hand and get the most out of it.

It is simply not possible to allow all migrant workers to bring their families with them. Only highly qualified upper-class immigrants who are likely to be in short supply domestically can receive the necessary salaries and are perceived as being of sufficient value to allow them to move in with families.

This carefully designed system allows for remarkable flexibility that provides flexibility for the local job market and is the best compromise for all participants, while protecting the core resident workforce.

It has allowed the meager city-state to attract much-needed global talent, as well as hundreds of thousands of relatively inexpensive workers performing menial tasks the locals no longer desire.

It has helped increase the quality of the local workforce, ensuring that the smartest people can contact Singapore, no matter where they are born.

Meanwhile, physical workers can make good money here, while supporting families in much less expensive places in India, Bangladesh, Pakistan, the Philippines, Indonesia, etc.

In the event of a crisis that makes them redundant, it creates fewer problems locally (unemployment and resulting poverty), while allowing them to return to a much cheaper life at home until the situation returns to normal and they can return. It is a win-win for everyone, allowing flexible and fair working conditions for all.

Foreign workers in Singapore
Foreign Workers / Image Credit: Shubham Verma via Unsplash

As a result, it is striking that the total employment of Singapore residents increased by 15,000 by the end of 2020, with foreign workers bearing the brunt of the cuts caused by the epidemic. On 180,000 lost jobs During the year, it was mainly in the lower-level jobs in construction and manufacturing, which were further affected by the crisis.

You might think that this is me in the most cruel and hardest of my heart. After all, they are human beings too, with lives, families, and jobs.

But the truth is, the situation would have been much worse if they had lost their jobs and had to support themselves and their families in Singapore instead of temporarily taking refuge in their home countries. It is usually much more expensive to live in it, as they can count on a much larger circle of friends and relatives.

It would be bad for Singapore as the country would have to support them in some way. It would be bad for them too, as they would struggle to find work to afford the high cost of living. Poverty and crime are likely to follow, as it usually does elsewhere.

Given the orderly nature of Singaporean immigration – which does not allow settlement in the city unless you are truly able to afford it and your skills ensure adequate income (and benefit for the country) – it provides people with more painful experiences during periods of economic downturn.

At the same time, it never closes the doors to their return. They can do this when the situation improves and you need more workers.

It is a strictly merit-based system that prevents pockets of poverty and social exclusion during recessions, while prioritizing job security for local residents.

A glimpse into what the future holds

The job market in Singapore is years ahead of all other countries, which heralds the future of employment in the developed world.

As entire nations grow wealthier and older, they will have to deal with labor force gaps at all levels in the economy. To fill them, they will compete for the talents capable and willing to do the jobs – from sweeping the streets to nuclear physics.

At the same time, they will be forced to manage the social ills that often come with mass migration, which may fuel nationalist sentiments and pit societies against the newcomers, especially if their influx is not carefully managed.

To avoid these problems, immigration must be tied to available jobs and the associated benefits, as it is restricted depending on a person’s ability to support themselves and their dependents – as is the case in Singapore.

When managed properly, a large migrant workforce will not be a problem, but it also raises the local economy and protects the jobs of the local people. Their lives are surrounded by a protective barrier of flexible employment for migrants, which can be quickly adjusted in times of crisis.

Featured image: Agence France-Presse

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