UNEMPLOYMENT

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UNEMPLOYMENT

16.

Mdm Cynthia Phua asked the Minister for Manpower (a) what is the current unemployment rate; (b) what percentage of the work force is holding short-term (2-year) contract work; and (c) whether any studies have been carried out on short-term employees and their commitment to good work ethos.

Dr Ng Eng Hen: (a) Current unemployment rate

The unemployment rate has held stable compared tothree months ago. The seasonally adjusted overall unemployment was 4.5% in June, same as in March 2004.

(b) Percentage of workforce on contract work

There is no standard period for contract work in Singapore, although it would generally refer to temporary work for less than two years.

Workers on short-term temporary contracts can be considered to be part of the contingent workforce. In addition, the contingent workforce includes freelancers or casual workers, and workers employed and supplied by labour suppliers or employment agencies who are not counted as direct employees of the firm they are attached to.

The proportion of contingent workers in Singapore is low. In 2002, 36,600 workers attached to private sector establishments with at least 25 workers could be considered to be on contingent employment. 1 They make up 3.6% of total employees.

Of this group, temporary workers on short-term contracts made up about 0.6% of all employees (approximately 6,300 workers). Workers supplied by labour suppliers or employment agencies comprised 2.4% and freelance/casual workers 0.6% of total employment 2 .

(c) Studies on short-term employees and their commitment to good work ethos

As the proportion of contract/contingent workers in Singapore is still low, there are currently no studies on short-term employees and their commitment to good work ethos in Singapore.

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Studies on the Swiss Labour Force suggest, however, that because temporary work provides employers with a tool to screen potential entrants and may provide "stepping stones" into permanent employment, temporary workers have an incentive to provide more effort than permanent workers. For example, they are 60% more likely to put in unpaid overtime compared to permanent workers. 3

Studies on Canadian and American workers 4 show that where workers embark voluntarily on contingent work, especially for those seeking to balance work demands with domestic or other responsibilities, they may increase productivity. However, when workers enter into these arrangements involuntarily, because there are no better employment opportunities available, their job benefits are reduced and they can find themselves marginalised in the workplace, leading to employee frustrations and morale problems. Thus, whilst the number of short-term contract workers in Singapore is still small, we would need to monitor the trend closely.

1 Source: Conditions of Employment, 2002, www.mom.gov.sg.

2 Total employment is defined as the sum of workers employed by the private sector establishments with at least 25workers and the number of freelancers/casual workers as well as those supplied by labour suppliers or employment agencies who are deployed in these establishments.

3 Engellandt, Axel and Regina T. Riphahn, 2004, "Temporary contracts and employee effort", Labour Economics 1 March 2004.

4 See for example CBC Newonline Special feature: The WayWeWork,

< http://www.cbc.ca/news/work/nomore9to5/234.html > and Bureau of Labor Statistics: Contingent

and Alternative EmploymentArrangements, February 2001,

http://www.bls.gov/news.release/conemp.nr0.htm