UNEMPLOYMENT AND JOB PLACEMENT

Mrs Yu-Foo Yee Shoon asked the Minister for Manpower what is the latest unemployment figure; what is the success rate for the job placement service that his Ministry provides; and how many workers have been able to find jobs through this service.

The Minister for Manpower (Dr Lee Boon Yang): Mr Speaker, Sir, the labour market continued to soften in the second quarter of 1998. The seasonally adjusted unemployment rate was 2.3% in June 1998. This was slightly higher than 2.2% in March 1998 and substantially higher than 1.7% in June 1997.

The actual unemployment rate without adjusting for seasonal factors was 3.2% in June 1998 compared with 1.9% in March 1998 and 2.4% in June 1997. Unemployment is traditionally high in June as this is the period that the new local tertiary graduates join the ranks of job seekers. An estimated 62,100 persons (seasonally unadjusted figure) were unemployed in June 1998 compared with 36,500 in March 1998 and 45,500 a year ago.

The Employment Service Department of the Ministry of Manpower registered about 1,500 to 1,700 new job seekers per month in recent months. About 80% of job registrants were able to get job referrals from the Department. Based on companies' feedback, about 6% of the total job registrants were successfully placed in employment. The ESD records show that about 50% of the registrants were able to find employment on their own, or they rejected the job offers by the prospective employers. The reasons cited for rejection include the unsuitable nature of work, working hours, location of workplace, or salary.

Dr Lee Tsao Yuan (Nominated Member): Will the Minister please enlighten the House as to whether the duration of unemployment has increased and also the nature of the unemployed, in other words, are these predominantly older and unskilled workers?

Dr Lee Boon Yang: Mr Speaker, Sir, I do not have the figures on the re-employment rate. But I understand that the re-employment rate between the first and second quarters has not changed substantially. There may have been a slight lengthening in the period of unemployment among those who were retrenched or out of work.

With regard to the profile of the unemployed persons, as most of the retrenchments in the last two quarters, about 68% to 69% of the retrenched workers, came from the manufacturing sector, you will expect to find more women. In fact, there could well be a higher proportion of the older or middle-aged workers, ie, those above the ages of 35-40 and above, and that in itself presents an added dimension to the problem. Because they are older, less educated and less skilled workers they have greater difficulty finding new jobs and that is why we are investing so much money and effort in providing them with skills upgrading opportunities so that they can take on the new jobs that are being created in the other sectors of the economy.

Mr Zulkifli bin Baharudin: I would like to ask the Minister what is the prospect of graduates from universities and polytechnics, whether there are specific plans to help them to get jobs, and whether the Government departments and statutory boards will consider increasing their intake of these graduates in view of the shrinking job market in the private sector.

Dr Lee Boon Yang: Mr Speaker, Sir, as the labour market loosens and employment creation slows down, we can expect that even graduates will find greater difficulty in getting jobs, particularly new graduates, and this is to be expected. I hope that this year's batch of new graduates will understand this position and also, more importantly, revise their expectations.

On our part, we will assist graduates who need job placement assistance. They can register with the Employment Service Department if they have difficulty finding a suitable job match on their own. We will help them find a suitable job match because we have a team of officers in our employment facilitation team who will make contact with all the employers in the various sectors that we know are still recruiting staff. We will try to help the graduates who register with us to find a suitable job match.

As to the statutory boards and Government departments, let me assure the Member that Government departments and statutory boards will continue to recruit manpower according to their needs. Faced with this crisis, we should not try to take the approach of using the Government as a sponge to soak up the surplus manpower as the economy slows down. There is a limit to how much the Government can do to soak up this surplus manpower. What we have to do is to create real jobs for them. We should not just randomly recruit graduates because we want to provide a refuge for them in this period of economic slowdown. That would be unwise. It would lead to Government inefficiency and, in the long term, it will hurt us more than it will benefit us. What we should do is to try to stimulate development, bring in more investments, and create more jobs so that the graduates can get employment and make a real contribution to the economy.

Mr Simon Tay: I quite agree with the Minister that we should not employ surplus graduates at this time. But clearly if there are a number of ministries or departments which are understaffed, according to their establishment guidelines, would the Ministry of Manpower consider, using this time, filling up those establishment limits?

Dr Lee Boon Yang: Mr Speaker, Sir, I think it goes without saying that if a ministry or department is understaffed, whoever is in charge will look at this loosening of the labour market as a golden opportunity to fill up the vacancies that he has to live with for so long.

Dr Wang Kai Yuen (Bukit Timah): Does the Minister have any statistics to show that the starting salary for new graduates has dropped and by how much has it dropped?

Dr Lee Boon Yang: Mr Speaker, Sir, this year's batch of new graduates has just entered the job market in the last 1« to two months. So I think it is still too early to gather such details. We will in due course have such information available.

Mr Inderjit Singh (Ang Mo Kio): Sir, in a recent report in the newspapers, it was reported that the starting pay for graduates hired in the civil service is the highest in the industry. Will the Government take this opportunity to revise this downwards so that it sets a trend for the rest of the private sector?

Dr Lee Boon Yang: Mr Speaker, Sir, the civil service salaries are closely pegged to the private sector. If, in fact, the private sector's starting salaries are going down, in due course, the civil service will also make an adjustment.