What is the real unemployment rate?

The Ministry of Manpower has recently released the 2009 employment statistics. As expected, the statistics for employment creation is broken down by residents, which comprise of Singapore citizens (SCs) and Permanent Residents (PRs), and foreigners

According the preliminary figures, the unemployment rate among residents, who include citizens and permanent residents, fell from 5 per cent last September to 3 per cent in December.

The state media is quicked to jumped to the conclusion that the unemployment rate of Singapore citizens has decreased as well with Chinese paper Lianhe Zaobao putting up a most misleading headline – “100% employment for Singaporeans.”

Over the years, true Singaporeans, i.e. Singapore citizens, have been asking for employment statistics for Singapore citizens, and not residents which distorts the actual employment situation faced by SCs on the ground. However, MOM has stubbornly refused to publish these statistics for unknown reasons, except for an occasional paper which was published in 2008 – “Employment of Singapore Citizens, Permanent Residents and Foreigners,1997 to 2006″.

If MOM could publish an occasional paper which breaks down employment statistics by SCs, PRs and foreigners, surely it will be able to do so on a regular basis? If MOM is unable to breakdown the statistics, here is an analysis to show that the majority of jobs created in 2009 went to PRs and not SCs. From 2004 to 2006, an average of about 49,000 persons were granted permanent resident status in Singapore. This translates to a total of 147,000 new PRs from 2004 to 2006.

Based on MOM’s occasional paper, it can be computed that PRs gained a total of 62,500 jobs from 2004 to 2006. Therefore, on average, about 62,500/147,000 = 42.5% of the new PRs found jobs/were in employment from 2004 to 2006.

In 2008, 79,167 persons were granted permanent resident status. The figure for 2009 has not been released yet. However, with government aggressive population augmentation strategy, we can safely assume that it will be higher than last year, and a consecutive estimate of 80,000 persons is assumed.

Assuming that the proportion of new PRs who found jobs/in employment in 2009 remained at 42.5%, it can be calculated that the number of jobs created for PRs in 2009 = 42.5% X 80,000 = 34,000.

With 43,000 jobs created for residents in 2009, the number of jobs created for SCs is only a measly 9,000, compared to 34,000 for PRs.

It is clear why MOM refuses to publish employment statistics for SCs only.

Nevertheless, we acknowledge that the above analysis is only an estimate. PRs could be losing jobs if all employers choose to keep all the SCs while letting the PRs go during the financial crisis.

No jobs could be created for PRs if employers refuses to hire them. However, it is common knowledge that the above scenarios are highly unlikely, especially when male SCs are subject to the annual In-Camp Training (ICT) liability of up to 40 days, and PRs enjoy similar treatment as SCs in government assistance schemes, such as the Jobs Credit.

We certainly welcome MOM to clarify. However, we will only believe in the hard figures broken down by SCs and PRs, and not any meaningless stories or anecdotes. Alternatively, we also welcome The Straits Times, or Today to do an alternative analysis to convince Singaporeans otherwise.