Employment rate

Saw the headline on The Straits Times (06/10/2006) regarding employment rate in Singapore. According to what was reported, Singapore's employment rate is now at a 15-year high. The article went on about how there was a significant increase in the number of women and elderly in employment. For women, the article attributed it to higher education and the desire to pursue a career rather than staying at home. For the elderly, it was attributed to the change in mindset of employers to hire older workers, and also a change in the mindset of the elderly to retire earlier. I am sceptical.

For starters, anybody who has studied micro-economics knows that there is such a thing as underemployment. It refers to those who are employed, but not in the desired capacity in terms of compensation, hours, or level of skill and experience. This group of people are in employment, any kind of employment, as long as there is some income; reason being they cannot afford to be unemployed. They are considered as employed, but on a stricter sense are not fully employed since their capabilities are not fully utilised. There may be those who cannot find jobs during the economic downturn and were only able to gain employment with the recent job growth. Therefore, in the midst of having an all time high employment rate, we still cannot be certain that there is no significant underemployment.

Although I do not refute the positive relationship between higher education and the desire to try and pursue a career in women, how much of the recent increase in employment in this group can be attributed to this reason? There should be a comparison on the percentage of the female population who are degree/ diploma holders between now and whichever quarter the statisticians are talking about. Only when such comparisons are made can we make the statement attributing the increase in female employment rate to an increase in the education level. Another issue to consider is whether the recent increase in employment could be due to re-entry into the workforce after the economic downturn.

As for the elderly, I am apt to think the reason given for increased employment rate in this group is just some hype to encourage the employers to hire more elderly workers and the employees to retire later. I am interested to know which areas of work the elderly are working in. I am also interested to know if they are re-entering the workforce or they have been in the workforce and are staying on. I am not sure of the percentage of the elderly workforce in low paying jobs, but I do wonder if they are in low paying jobs because they are not capable of performing in higher paying jobs or they are underemployed.

With regards to those re-entering the workforce, are they all doing it because they believe they will have a more fulfilling life working or is there a significant percentage working because their nest egg cannot sustain them. With the Asian economic crisis in 1997, and the economic downturn in 2001, lost of job and failure to gain re-employment meant those affected probably had to start dipping into the retirement savings much earlier than expected. The end result is the failure of the retirement savings to sustain throughout the planned retirement years, and hence it becomes a matter of no choice that this group of people had to re-enter the workforce, when the country's economy is recovering, to stretch the remainder retirement dollar.

All time high employment rate? It is just roses covering the thorns beneath.