Singapore’s Youth Unemployment Rate Higher in 2020 Compared to Previous Economic Downturns | Singapore
SINGAPORE, June 18 – Compared to previous recessions such as the 2009 global financial crisis and the 2003 Severe Acute Respiratory Syndrome (SARS) pandemic, Singapore’s youth unemployment rate was higher in 2020.
This is probably due to the fact that it was difficult for young people to get part-time or temporary employment in the retail and food and beverage (F&B) sectors, the ministry said. Manpower (MoM) yesterday (June 17).
In its latest labor market report for the first quarter of this year, however, the health ministry noted that “youth unemployment is mainly transient and short-term” and that the overall youth unemployment rate in the long run. term was still consistent with past downturns and lower than that of other advanced economies.
The youth unemployment rate was 10.6% in 2020, compared to 8.8% during the global financial crisis and 9.3% during the Sars pandemic.
Singapore’s youth unemployment rate was also higher than in countries like Japan and Korea, but lower than Taiwan and Hong Kong.
A person between the ages of 15 and 24 is defined as a young person.
The long-term youth unemployment rate was 1.1% in 2020, comparable to the global average of 1%, and during the Sars pandemic (1.3%) and the global financial crisis (1%).
The MoM explained that in Singapore, long-term unemployed refer to people who have been unemployed for at least 25 weeks. In other economies, long-term unemployment refers to those who have been unemployed for at least six months.
Singapore’s long-term youth unemployment rate is also one of the lowest compared to other economies such as France (8.4%), UK (4%) and Hong Kong ( 3.8%).
The MoM reported that, as in other countries, the youth unemployment rate here has historically been higher than in other age groups, as it reflects the job search activities of new graduates entering. in the labor market, a higher churn rate due to exploring different jobs, and young people who frequently switch from temporary to part-time employment while in school.
The MoM also said that four in ten young people in employment were in temporary or contract jobs, and were mostly students working in parallel.
Regarding economic ‘idleness’, the MoM indicated that this was less of a problem in Singapore than in other countries, despite the proportion of young people who had no jobs, education or skills. training rising to 5.3% in 2020 against 4.5%. hundred the previous year.
What economists say
Commenting on the report, CIMB Private Bank economist Song Seng Wun said it was no surprise, given that last year saw the worst economic contraction in Singapore’s history.
“It’s just a reflection of macroeconomic conditions, where companies are seeing their operations shrink due to the restrictions and the pandemic, so the demand for labor has obviously fallen.”
Song noted that the demand for labor in the F&B industry, where many young people have part-time jobs, has been halted due to the blackout period from April 7 to June 1 of last year. which restricted non-essential activities.
When these F&B establishments first opened, he said employers did not hire as many people as before, instead using technology and other means to deliver their service without adding more people to their payrolls. .
Looking ahead, Song expects the long-term unemployment rate to return to 1%, as labor market conditions have improved this year.
âPolicymakers have come to help companies create digitization processes, which also create opportunities for many more tech-savvy students to be employed,â he said.
Maybank’s chief economist Chua Hak Bin Kim Eng said the youth employment rate is likely to recover more strongly when social restrictions are relaxed and F&B establishments can reopen fully.
He added that more young people may also choose to take training or college courses until the labor market improves, which is why unemployment rates are higher compared to previous downturns.
Dr Chua said the youth unemployment rate is only “temporarily high” because of the increased measures and restrictions on F&B and retail, which is why long-term unemployment rates are high. consistent with past slowdowns.
Selena Ling, head of treasury and research at OCBC bank, said long-term unemployment rates are “very manageable” as at 1.1% it is the lowest compared to other countries.
“The question is how quickly the youth unemployment rate of 10.6% is falling and normalizing in the months or years to come,” she added.
Ling believes the rate should drop, albeit at a slower pace than in past post-crisis recoveries due to the ‘long tail’ of the Covid-19 pandemic. – TODAY