Vanishing Jobs Growth Spells Deep Trouble for South Korea


 

 
Not-so-nice figures: Moon has seen his popularity slide amid criticism that he’s hurting employment by
aggressively increasing the minimum wage. — AP

Unemployment and jobs growth in South Korea haven’t looked so bad since the wake of the global financial crisis, undermining President Moon Jae-in’s economic agenda.

Data released Wednesday show the unemployment rate jumping to 4.2 percent, the highest since early 2010, and much greater than any economists forecast. Jobs growth slumped to just 3,000 last month, also the worst figure in more than eight years.

Moon, who came into office pledging to create jobs and raise incomes for regular workers, has seen his popularity slide amid criticism that he’s hurting employment by aggressively increasing the minimum wage.

While pay hikes planned for this year and 2019 are here to stay, Finance Minister Kim Dong-yeon said the government would consider adjusting some policies.

He conceded that the jobs market wouldn’t improve much anytime soon.

Disappearing Jobs Growth

  • Number of jobs added: South Korea added just 3,000 jobs in August, the least since 2010

Source: Statistics Korea

Moon’s administration points to the fallout from corporate restructuring and the shrinking working-age population as the source of the problems in the labour market. Businesses counter that hiking the minimum wage 16% this year, with another bump of almost 11% to come next year, has made job layoffs inevitable.

Small business owners in particular, from convenience stores to fast-food franchises, have shed workers.

Adding to the economic unease in South Korea is the risk that US President Donald Trump may hit car exporters with auto tariffs, even after Seoul agreed to renegotiate its trade deal with the US.

Unemployment Spike

South Korea’s unemployment rate in August reached the highest since 2010
  • Seasonally adjusted unemployment rate
Source: Statistics Korea

South Korean bonds climbed and the won fell after jobs figures, which appeared to squash any near-term prospect of the central bank raising interest rates.

The finance minister said economic policies that are geared toward wage-based growth are moving in the “right direction”. Yet the government also acknowledged the need for more communication and market analysis in order to gain trust from companies and the people, he said.

The presidential office described the recent increase in unemployment as inevitable pain that accompanies a change in the structure of the economy, Yonhap News reported.

Like many other countries, South Korea is experiencing a widening gap between the rich and the poor. It’s confounding policy makers and exacerbating political divisions. — Bloomberg

Malaysia’s economy: stronger but eroding purchasing power


The story is the same everywhere – the rising cost of living has not been accompanied by an increase in wages.

HERE we go again – another set of impressive growth figures. Bank Negara has announced Malaysia’s latest economic growth at a commendable 6.2% in the third quarter of 2017.

The pace of economic growth for the three months up to September was faster than the 5.8% registered in the second quarter of the year.

This growth rate was the fastest since June 2014.

On a quarter-on-quarter seasonally adjusted basis, the Malaysian economy posted a growth of 1.8% against 1.3% in the preceding quarter, according to the Statistics Department.

Malaysia’s robust economic growth has been attributed to private-sector spending and a continued strong performance in exports.

To quote Bank Negara governor Tan Sri Muhammad Ibrahim last Friday: “Expansion was seen across all economic sectors.”

But try explaining this impressive economic growth rate to the average salaried worker struggling to pay his monthly household bills.

Stretching the ringgit is especially great for those living in urban areas, and Malaysia is increasingly becoming urbanised.

The story is the same everywhere – the rising cost of living has not been accompanied by an increase in wages.

Compounding matters is the depreciation of the ringgit, reducing the purchasing power of the ordinary folk. They can’t buy the same amount of food as they used to previously.

Employers are being forced to cut operating costs to match declining profits.

Job security is becoming paramount. Many are fearful of losing their jobs, as companies cut cost to cope with the challenging business landscape.

And the reality is that many companies are not hiring, as evident from the unemployment rate of 3.4%.

The Malaysian Employers Federation (MEF) has cautioned that more people would be out of a job this year due to the current economic challenges.

Apart from the challenging landscape, technology has disrupted several brick-and-mortar businesses, forcing them to change their way of doing business.

According to MEF executive director Datuk Shamsuddin Bardan, economic challenges will compel bosses to review their workers’ requirements.

While official statistics show that the economy is charting a strong growth path, the trickle-down effect is not being felt.

Why is the sentiment on the ground different from what the politicians and officials are telling us? Why is there a disconnect in the economy?

Are the figures released by the government officials more accurate and authoritative compared with the loud grumblings on the ground that are anecdotical in nature devoid of proper findings?

We hear reports of supermarkets and hypermarkets closing down, but could that be because their business model no longer works as more Malaysians turn to online shopping, with e-commerce companies announcing huge jumps in traffic?

It is the same with the malls – retail outlets are reporting lower sales and this is compounded by the fact that there is an oversupply of malls.

International restaurant chains such as Hong Kong’s dim sum outlet Tim Ho Wan and South Korean bakery Tous Les Jours and South Korean barbeque restaurant Bulgogi Brothers have ceased operations.

But then again, it could be that their offerings and prices had failed to compete effectively against the local choices.

According to the central bank, demand is anchored in private-sector spending.

“On the supply side, the services and manufacturing sectors remain the key drivers of growth,” Muhammad said.

Looking ahead, the governor said that the economy this year is poised to register strong growth and likely to hit the upper end of the official target of 5.2%-5.7%.

The trickle-down effect is not being felt simply because there is uneven growth in the various sectors of the economy.

The property sector, which provides the biggest multiplier effect, continues to be in the doldrums.

The weak ringgit has had a big impact on the price of food, especially processed food and beverages that make up 74.3% of Malaysian household spending.

It was reported that Malaysia had imported a whopping RM38bil worth of food between January and October last year.

In recent weeks, the ringgit has strengthened to about RM4.16 against the US dollar. But it is still far from RM3.80 to the dollar and the outlook of the currency remains uncertain.

We can’t even hold our heads up against the Thai baht and Indonesian rupiah – two currencies that have appreciated against the ringgit.

The headline economic numbers are showing good growth, but Malaysians’ purchasing power has dropped and our living standards have eroded. That is the bottom line. We are living in denial if we do not admit this.

This column first appeared in StarBiz Premium.
Source: On the beat by Wong Chun Hai, TheStaronline

 

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Singapore layoffs bulk of high-skilled workers, households feeling the pinch


High-skilled workers make bulk of layoffs last year

 

Office workers at Raffles Place. TODAY file photo

HIGHER-skilled workers, degree holders and middle-aged workers were the hardest hit by layoffs in Singapore last year, making up more of the pool of resident workers made redundant than workers of other occupational, educational and age groups.

These groups were also less likely than other resident workers to be in employment within six months of being made redundant, Ministry of Manpower (MOM) statistics showed.

Of the Singaporeans and permanent residents who lost their jobs last year, more than seven in 10 (71%) were professionals, ­managers, executives and technicians, up from 66% the year before.

This was disproportionately higher than their 54% share of the resident workforce last year.

Between workers with different educational qualifications, degree holders made up the largest share – 44% – of residents who lost their jobs last year. This was up from 41% in 2014.

One in three of the resident workers made redundant last year was aged 40 to 49, despite this group making up only about one in four of the overall resident workforce.

Less than half of both degree holders and middle-aged workers who were made redundant in the third quarter of the year were back in employment by December.

Some workers could have decided to go for training or stop looking for a job, MOM said in its report.

But another reason could be that older workers already have preferences, such as not wanting to do shift work, said Linda Teo, country manager of human resource firm ManpowerGroup Singapore.

“This means they won’t be at the top of the list when employers sieve through applications.”

Adecco Singapore country manager Femke Hellemons said workers here often move from industry to industry for a comparative advantage, and skilled workers may take more time to find a job that they have the right skills for that also matches their pay expectations.

Losing a job would be a blow for those over 40 years old and with higher skills as they tend to have higher financial obligations such as mortgages and children’s study loans, but at the same time they are more costly to employers, said DBS economist Irvin Seah.

Overall, redundancies rose over the year while the number of vacancies fell, which experts said was because of weak global demand.

“This could be a sign of companies adopting measures to achieve cost efficiencies through outsourcing, offshoring and adoption of technologies in their work processes,” said Foo See Yang, vice-president and country general manager of Kelly Services Singapore.

ManpowerGroup’s Teo said the employment pattern is likely to continue its downward slide, as hiring intentions for the next three months are at their weakest since the third quarter of 2009. — The Straits Times/Asia News Network

Layoffs in S’pore last year highest since 2009 Global crisis

In what could be a sign of worse things to come, more workers lost their jobs last year amid weaker economic conditions, although unemployment remained low.

A total of 15,580 workers were laid off in 2015, the fifth consecutive year of rising redundancies, according to full- year official data released by the Manpower Ministry (MOM) yesterday.

Last year’s number climbed 20 per cent from 12,930 in 2014 and was the highest since the 2009 global financial crisis, which saw 23,430 workers laid off.

Job vacancies also fell to 53,700 as of December after accounting for seasonal variation, down 18 per cent from 65,500 a year earlier.

The trend could continue. “Amid the cyclical weakness and as the economy restructures, some consolidation and exit of businesses is expected,” MOM said.

Just over half, or 51 per cent, of the Singaporeans and permanent residents (PRs) made redundant from July to September last year were back in employment by the end of the year.

This figure measures the re-entry rates within six months of redundancy based on Central Provident Fund (CPF) records, and was down from 55 per cent three months earlier and 59 per cent at the end of 2014.

Still, the unemployment rate last year remained unchanged for Singaporeans, at 2.9 per cent. The figure including PRs was 2.8 per cent, up from 2.7 per cent in 2014.

There were 2,268,900 Singaporeans and PRs in jobs in Singapore as of the end of last year, just 700 more than there were a year earlier – when local employment had grown by 96,000.

With employment of foreigners also slowing, the total number of workers here stood at 3,656,200 at the end of last year.

For the year ahead, MOM expects redundancies to continue to rise in sectors facing weak external demand and that are undergoing restructuring, while domestic services sectors are likely to continue to need workers.

The Ministry added that it is “closely monitoring the current economic and labour market situation, and is strengthening employment support to help displaced locals re-enter employment”.

PMETs made up 71% of those affected as workers found it more difficult to get new jobs

SINGAPORE — The number of workers laid off last year spiked 20.5 per cent compared with 2014, reaching 15,580 — the highest number since the global financial crisis seven years ago, the latest Ministry of Manpower labour market report showed on Tuesday (March 15).

In 2009, the number of redundancies reached more than 23,000. The majority of last year’s lay-offs were in the services sector (55 per cent), where the financial services, wholesale trade and professional services were worst hit. Correspondingly, professionals, managers, executives and technicians (PMETs) made up 71 per cent of those laid off last year, up from 66 per cent in 2014.

 The financial services sector — which had been hit by news ofjob cuts announced by global banks, affecting employees here — shed

1,710 jobs last year, compared to 1,280 in 2014. Over the same period, the number of workers laid off in wholesale trade climbed from 1,490 to 2,150, while job losses for those in professional services — including doctors, lawyers and accountants — rose from 1,520 to 2,290.

Workers who were laid off also found it more difficult to get a new job last year: Based on Central Provident Fund records, half of the residents made redundant in the third quarter of last year managed to secure employment by December, down from 55 per cent in the previous quarter, and 59 per cent in the same period in 2014.

MOM said it expects redundancies to continue to rise in sectors facing weak external demand and those that are undergoing restructuring. Domestic-oriented services sector will continue to need workers, the ministry said. “MOM is closely monitoring the current economic and labour market situation, and is strengthening employment support to help displaced locals re-enter employment,” it added.

Economists told TODAY that the slower global economic growth and the downturns in manufacturing as well as the oil and gas sectors have had a spillover effect into the services sector.

DBS Bank senior economist Irvin Seah said the slump in oil prices not only affect oil rig builders but the entire supply chain including smaller companies that support the oil and gas sector. The financial services sector would continue to see more job losses compared to other segments as it is going through some consolidation, Mr Seah said. As far as the labour market is concerned, the worst is yet to come as the global economic outlook deteriorates, he cautioned.

CIMB Private Banking economist Song Seng Wun said that while lay-offs may not necessarily increase over the year with some sectors still hiring, the pace of hiring may slow and this could push the unemployment rate up. “I would expect job seekers to take even longer to find a new job in the year head. Businesses may not be laying off more workers but they may not be that in a hurry to hire,” Mr Song
said.

Unemployment rate for residents was 2.8 per cent last year, inching up from 2.7 per cent in 2014, while that for citizens remained
unchanged at 2.9 per cent.

Mr Seah noted that the foreigners has borne the brunt of the job losses so far. “Companies are unwilling to let go of local workers because of the low foreign worker dependency ratio ceiling,” he said.

On the high proportion of PMETs laid off last year, Members of Parliament (MPs) from the labour movement attributed it to the fact that this group of workers comprise a higher percentage of the total workforce. Still, NTUC assistant secretary-general Patrick Tay, who is also an MP for West Coast GRC, said he was particularly concerned about PMETs above 40 years old, who would have a harder time finding a new job if they are retrenched.

Mr Tay, who co-chairs the Financial Sector Tripartite Committee which helps professionals seeking to find new jobs in the sector, suggested adopting a sectoral approach to provide more targeted and focused help in sectors where affected by high job losses.

Last month, the Association of Banks in Singapore announced that it has initiated a jobs portal that allows its members to refer their staff for suitable positions in other banks.

NTUC director of youth development Desmond Choo, who is an MP for Tampines GRC, said more efforts are needed to help PMETs. “We need to be able to re-skill, re-tool them (to join) other growing sectors … like healthcare and ICT (information communication technology),” said Mr Choo. More could also be done to provide “hardship support” for the families of retrenched PMETs while
they look for a job, he added.

Advanced data released by MOM in January showed that Singapore saw its worst year-on-year employment growth since 2003 last year.

Confirming the labour market’s sluggish performance, the latest MOM report said that excluding foreign domestic workers, total employment grew by 23,300 – or 0.7 per cent – last year, compared to increases of 122,100 (3.7 per cent) and 131,300 (4.2 per cent) in 2014 and 2013, respectively.

The growth in local employment was flat: Only 700 of the jobs added were filled last year by Singaporeans and Permanent Residents, compared to 96,000 and 82,900 in 2014 and 2013 respectively.

6,534 jobs lost in Malaysia since start of 2016, now is not the time to be choosy !


About 78% of jobs lost come from finance, insurance sectors

PETALING JAYA: A total of 6,534 workers from 114 companies have lost their jobs since the start of the year, with 5,118 or about 78% coming from the finance and insurance sectors.

The number, which is more than a sixth of the 38,499 workers retrenched last year, reflect the current economic downturn and challenging business climate.

The Labour Department, a unit under the Human Resources Ministry told theSun today it had received 115 retrenchment notifications from local employers since early this year until March 10.

It is a legal duty for employers to notify the department of every retrenchment activity.

The five top sectors involved in the exercise are manufacturing (22 notifications), mining and quarry (21 notifications), retail (13 notifications), construction (11 notifications), as well as finance and insurance (7 notifications) sectors.

In the manufacturing sector, about 437 workers were retrenched during the period, followed by 395 workers in the mining and quarry sector, 184 workers in retail sector and 155 workers in the construction sector.

The department added that it had received a total of 13 notifications from oil and gas sector (mining and quarry), which has affected 241 workers in total to date.

The department also revealed that professional and administration workers accounted the majority of workers affected, representing 72% or 4,720 of the total, while the remaining 28% or 1,814 were clerical workers and below.

Commenting on retrenchment laws and benefits, the department said although retrenchment is a managerial prerogative and there is no legal provision to prohibit any company from cutting their workforce, there are salient points within employment related regulations that sets conditions when an employer conducts a retrenchment exercise.

For instance, Section 60N of the Employment Act 1955 states that foreign workers should be the first to go in a staff reduction exercise.

Meanwhile, Regulation 6 states that employers are obligated to pay lay-off benefits based on the following conditions:

  • » 10 days wages for each year of service, for those with one to two years of service:
  • » 15 days wages for each year of service, for those with more than two years but less than five years service; and
  • » 20 days of wages for each year of service, for those with more than five years of service.

Employees not covered by the Employment Act 1955 may seek redress for possible remedy under the Industrial Relations Act 1967 if they are not paid any lay-off benefits.

The Labour department said the government facilitates retrenched workers who are seeking employment through an online portal services JobsMalaysia and its nationwide network of JobsMalaysia centres, which operate under the purview of the unit.

“In addition, the department through JobsMalaysia also conducts regular job/employment carnivals that aim to promote potential job vacancies for Malaysians including those affected through recent retrenchments,” it added.

Wan Ilaika Mohd Zakaria sunbiz@thesundaily.com

Now is not the time to be choosy

 

Times are tough, jobs are hard to come by and more and more are flooding the job market as companies fold and lay off staff. For Malaysians, it’s times to wake up and realize this means hard, even dirty, work.

 

What we need now iss the creation of jobs – a shot in the arm for the economy – and for Malaysians to understand that they have to get down and dirty before they can make a success of life.

THE old woman roams the back streets off Old Klang Road. With her slightly hunched body, and a smile on her face, she rummages through the dustbins in the alleys, digging into the bins with her stick.

She does dirty work, but she stays clean. She uses the sharp end of the stick to pick up the aluminium cans and plastic bottles. Her hands are only for cardboard and pieces of clean paper.

We call her Latha, for want of a name. She’s a Malaysian Chinese, from Klang.

Unlike some people’s stereotyped Chinese, she works hard, she puts in long hours and she makes just enough money to be comfor­table – by her standards. Thus, the smile on her wrinkled face.

But not all can do that.

The story of S. Sellamah is one such. She was desperate to feed her child. And she stole a 2kg packet of Milo. She was caught, fined and jailed. Now, she is on record as an ex-convict and lawyers are trying to get that jail sentence expunged. It doesn’t seem right that someone who stole so little out of desperation should have to live life with a record like that hanging over her head.

After all, I believe the guys in Milo would be happy to give her a carton of the stuff. They are people with big hearts. I know.

Over in Penang, a man also stole fruits and drinks, again to feed his children. His wife was in a coma and he had no money. He was caught, too.

But his story is one that warms the heart. The general manager of the hypermarket took pity on him, checked out his story and offered him a job instead. Now, the man has a job and his children can have decent meals. Isn’t that a wonderful ending to a sad story?

We are living in times of hardship. Prices are soaring. Jobs are getting scarce. Those with jobs are just happy to hang on to them. Companies are folding.

So many people have lost their jobs. Many are not even getting compensation for the jobs they lost. One media company actually told retrenched employees to go to court to get their compensation.

According to a report, more than 6,500 people have been let go from their jobs just this year. That’s only the tip of the iceberg. Even Petronas is letting go of 1,000 employees.

And we are barely three months into 2016. Things are likely to get worse, far worse, be­fore they get any better. So, it would do to have a heart and spare a thought for the jobless.

Yes, there are thieves who would steal at the first chance – which is why many supermarkets lock up items like Milo tins – but if the cases are genuine, surely having a heart for the poor can’t be a bad thing.

Talking of the jobless, a bunch of schoolmates from Penang are now embarking on a plan to help them. They are setting up a portal for odd jobs. They call it dojob. The idea behind it is that people need cash in hand for immediate spending.

No CVs, no interviews. You need a waiter for the party you are having? You may be able to find someone there. A gardener to cut the overgrown grass? Someone with basic know­ledge of plumbing to fix a leaky pipe? Stuff like that.

I think it’s a great idea. And what’s more. It’s free. It’s just a platform to get a hirer and hiree to meet up.

Of course, there are questions to be answered – like how would people without jobs be able to access the internet to look for these jobs? But that’s for those guys to figure out.

But the aim is noble. It could help people like the two desperate shoplifters to find some quick cash and tide things over until a proper job comes along.

With Malaysians now des­­perately in need of jobs, it’s a good thing that the 1.5 million Bangladeshi worker deal is off. To have foreigners take away the few jobs will only make things worse, not to mention the almost RM30bil that’s sent back to their homes.

What we need now is the creation of jobs – a shot in the arm for the economy – and for Malaysians to understand that they have to get down and dirty before they can make a success of life. For most of us, our forefathers did just that.

There are many Bangladeshis who are now running their own motor repair shops and car washes. They started as lowly-paid wor­kers and now are employers to Malaysians! It’s time for Malaysians to wake up. Times are hard – and that calls for hard work.

By Dorairaj Nadason The Star

The writer, who can be reached at raj@the star.com.my knows all about hard work. When The Star was shut down in 1987, he had to be a carpenter’s assistant, lugging lumber up five floors. No lifts, just the stairs.
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