Part One Article On Unemployment Economics Essay
Singapore unemployment rate declines as there are fewer lay-offs registered between April and June as the number of new job increases. The unemployment rate dipped over the quarter by 0.1% to 2% in June, while the rate for citizens decline by 0.2% to 2.8% and 3% respectively. The total number of jobs created in the second quarter of the year has risen to a total of 31,700 jobs, which is higher than the same period last year.
A total of 58,900 jobs were created in the first half of the year, compared with 53,100 on the previous year which increases by 5,900 of jobs this year. Service sector has a higher employment rate compared to last year where there was a gain of 19,300 jobs, an increase of 2,000 more vacancies in the service sector, which also includes manufacturing sector where 4,700 jobs were created.
Three in five residents laid off in the first quarter of the year found a job by June, shows an improvement of 50% by the previous cohort in March. Labour productivity have drop 1.9% between April and June, the third consecutive quarter of decline.
SOURCE: TODAYonline | Singapore | Unemployment rate declines. 2012. TODAYonline | Singapore | Unemployment rate declines. [ONLINE] Available at: http://www.todayonline.com/Singapore/EDC120915-0000032/Unemployment-rate-declines.
[Accessed 18 November 2012].
Refer to: Appendix A
Definition of Unemployment
Unemployed defined as persons of working age who are without work, are available to start work within two weeks and either have actively looked for work in the last four weeks or are willing to take up an appointment.
SOURCE: Macroeconomics (19th edition). McGraw-Hill Reference from Macroeconomic, Unemployment and Inflation – Chapter 5
Economic Analysis
Unemployment rate is the percentage of the people in the labour force who are unemployed.
Unemployment rate: Number of people unemployed x 100%
Labour Force
Based on MOM statistics data as of June 2011
Unemployment rate = 81.2 / 2,080.1 x 100%
= 4.0%
SOURCE: [ONLINE] Available at: http://www.singstat.gov.sg/pubn/reference/sif2012.pdf. [Accessed 18 November 2012].
Refer to: Appendix B
3.01 Causes of unemployment
The causes of unemployment can be caused by 3 types of unemployment which are
Frictional unemployment
Structural unemployment
Cyclical unemployment
Below is my research to reflect the employment growth and unemployment growth.
3.02 Frictional unemployment
We always aim for a better opportunity that is when we workers leave our jobs to find better ones, simply moving towards a better position. This occurs because workers need to find out about possible new job opportunities, go for interviews and possibly move before starting their new jobs. Frictional unemployment allows companies to find qualified workers. Labour cost would rise when workers stay with their current jobs until they found one, it will be more time consuming and expensive for companies to bring on good workers, causing cost-push inflation.
The table below shows the chart of the Rate of Re-entry into Employment of Residents made redundant. As we can see in the table below, the total rate of re-entry from March to June increases by 10.4%. Clerical, sales and service workers has the highest re-entrants which is 21.9%.
SOURCE: Re-entry into Employment – Ministry of Manpower . 2012. Re-entry into Employment – Ministry of Manpower. [ONLINE] Available at: http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/re-entry_into_employment.aspx.
[Accessed 18 November 2012].
Refer to: Appendix C
.
SOURCE: [ONLINE] Available at: http://www.mom.gov.sg/Publications/mrsd_qtlmr122.pdf. [Accessed 18 November 2012].
Refer to: Appendix D
Older workers stepping into Labour Force and slowing down the Local Labour Force Growth
The proportion of workers ages 55 to 64 has an increase of 2.2% in the workforce, comparing from 2010 and 2011. Some companies in Singapore is starting to hire older workers, older workers need to stay longer in the labour force. The cost of productivity arises on the employers concerns.
SOURCE: [ONLINE] Available at: http://www.mom.gov.sg/Documents/statistics-publications/Statistical-Charts/mrsd_ResEmpRatebyAge_Sex_Ct_310112.pdf. [Accessed 18 November 2012].
Refer to: Appendix E
Alternatively, there are more people leaving their jobs in the first and second quarter of 2011 and 2012. The recruitment rate increases by 10% compared to 2011.
SOURCE: Labour Turnover – Ministry of Manpower . 2012. Labour Turnover – Ministry of Manpower. [ONLINE] Available at: http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/labour-turnover.aspx.
[Accessed 18 November 2012].
Refer to: Appendix F
3.04 Structural unemployment
Structural unemployment comes from the mismatch between the jobs available and the skills of the available workers in the market. These people usually do not have skills that are not needed nor have a specialized background which does not fit the market or cannot be used in the current market. It is difficult for workers to learn a new set of skills or to move on to an area whereby they need to start afresh. Policies should be put in place to prevent such unemployment. Structural unemployment is the most common form of unemployment in the market.
Factors that result in structural unemployment
Age
Educational level
Some of the workers may be too young or too old for the job requirements. While some do not have a very high education level may have a different view from the employers. High educated workers may not be interested jobs that provide them with low wages and long working hours.
The table below shows the increase of 32.8% in the employment rate between 2010 to 2011, and also the number of employed workers by age and educational level.
SOURCE: Report on Labour Force in Singapore 2011: Statistical Tables – Ministry of Manpower . 2012. Report on Labour Force in Singapore 2011: Statistical Tables – Ministry of Manpower. [ONLINE] Available at: http://www.mom.gov.sg/statistics-publications/national-labour-market-information/publications/Pages/statistical-tables-2011.aspx. [Accessed 18 November 2012].
Refer to: Appendix G
3.05 Cyclical unemployment
The number of retrenchment in the first three quarters of 2011 and 2012 increased to 15.3%. Below is the analysis that reflected the number of retrenchment in the first 3 quarters of 2011 and 2012.
SOURCE: [ONLINE] Available at: http://www.mom.gov.sg/Documents/statistics-publications/Statistical-Charts/mrsd_Redundancy_ct_311012.pdf.
[Accessed 18 November 2012].
Refer to: Appendix H
4.0 Conclusion of Analysis
Analysing the report, it shows that our economy in Singapore is facing with low unemployment rate till date. Unless, there is a high demand from the employer to increase productivity then the empoyment rate will increase. As we can see that foreign wokers in some industry like construction, manufacturing and engenieering sectors are increasing. We should be balancing the foregin and local workforce in order to ensure
low unemployment rate in Singapore.
Price-Level
AS
P2
AD2
P1
AD1
RGDP
Q1 Q2
Increase in AD curve due to demand in supplies
Increase in price levels due to demand in workforce
Increase in national output due to supplies produced
Fall in unemployment due to demand in labour
5.0 Referencing
Appendix A
Online source
Available at: http://www.todayonline.com/Singapore/EDC120915-0000032/Unemployment-rate-declines.
Definition of Unemployment
Macroeconomics (19th edition). McGraw-Hill Reference from Macroeconomic, Unemployment and Inflation – Chapter 5
Appendix B
Online source
Available at: http://www.singstat.gov.sg/pubn/reference/sif2012.pdf.
Appendix C
Online source
Available at: http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/re-entry_into_employment.aspx.
Appendix D
Online source
Available at: http://www.mom.gov.sg/Publications/mrsd_qtlmr122.pdf
Appendix E
Online source
Available at: http://www.mom.gov.sg/Documents/statistics-publications/Statistical-Charts/mrsd_ResEmpRatebyAge_Sex_Ct_310112.pdf.
Appendix F
Online source
Available at: http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/labour-turnover.aspx.
Appendix G
Online source
http://www.mom.gov.sg/statistics-publications/national-labour-market-information/publications/Pages/statistical-tables-2011.aspx
Appendix H
Online source
Available at: http://www.mom.gov.sg/Documents/statistics-publications/Statistical-Charts/mrsd_Redundancy_ct_311012.pdf.
6.0 Appendix
Appendix A
Appendix B
MACROECONOMIC REPORT PART TWO
ARTICLE ON INFLATION
COHORT : DBA 5B/12
DONE BY : CHOO AI LYN, ESTH
CONTENT PAGE
Table of Content Page No
Summary of Article …………………………………………………………………..Page 20
Definition of Inflation……………. .…………………..……………………………….Page 20
Economic Analysis ………………………..……………………..……………….……….Page 21-22
Inflation caused by Policy on Foreign Workers and Lower Local Workforce………………………………………………………………………………….Page 23
Inflation caused by Cost of Private Transportation and Higher COE Premiums…………………………………………………………………….Page 24
Inflation caused by Increases in Oil Price………………………………..Page 24
Conclusion of Analysis ……………….………………………………………………………..Page 25
References…. ……………..………………………………………..………………………..Page 26
Appendix …………………..…………………………………………………………….Page 27-32
Summary of Article
The article indicated that core inflation soared up to 4.7% in September. Consumer price rose to 5.3% year-on-year in June. This jump in inflation was due to the high costs for both private road transport and also housing. Transportation costs rose up to 10.8% in September compared to the increase of 6.3% in August. The accommodation cost rises to a 7.7% in September from 7.4 in August, an increase of 0.3% within a month.
SOURCE:
Singapore’s CPI inflation rises to 4.7 pct in September – Xinhua | English.news.cn . 2012. Singapore’s CPI inflation rises to 4.7 pct in September – Xinhua | English.news.cn. [ONLINE] Available at: http://news.xinhuanet.com/english/business/2012-10/23/c_131925252.htm. [Accessed 11 November 2012].
Refer to: Appendix A
Definition of Inflation
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.
SOURCE:
Inflation Definition | Investopedia . 2012. Inflation Definition | Investopedia. [ONLINE] Available at: http://www.investopedia.com/terms/i/inflation.asp.
[Accessed 11 November 2012].
Economic Analysis
CPI and Annual Inflation Rate
Year
Consumer Price Index
Annual Inflation Rate
2010
102.8
2.8%
2011
108.2
5.2%
Calculation of Annual Inflation Rate
Annual Inflation Rate = CPI of year 2010 – CPI of year 2011 x 100%
CPI of year2010
Annual Inflation Rate = 108.2 – 102.8 x 100%
102.8
= 5.2%
CPI and Annual Inflation rate from 2000 to 2011
SOURCE: Statistics Singapore – Time Series on Consumer Price Index and Inflation Rate. 2012. Statistics Singapore – Time Series on Consumer Price Index and Inflation Rate. [ONLINE] Available at: http://www.singstat.gov.sg/stats/themes/economy/hist/cpi.html. [Accessed 19 November 2012].
3.1 Inflation caused by Policy on Foreign Workers and Lower Local Workforce
SOURCE: Composition of Singapore’s Total Workforce. 2012. Composition of Singapore’s Total Workforce. [ONLINE] Available at: http://population.sg/resources/workforce-composition/.
[Accessed 19 November 2012].
Refer to: Appendix BIn a recent press release by MOM, it states that as of December 2011 our total workforce was 3.02 million, excluding foreign workers. Singapore residents’ forms a total of 67% while the foreign workers making up to the remaining 33%. As we can see in the chart below, the percentage of foreign workers have reduced. .
3.2 Inflation caused by Cost of Private Transportation and Higher COE Premiums.
SOURCE: COE Prices in Singapore – Oneshift.com. 2012. COE Prices in Singapore – Oneshift.com. [ONLINE] Available at: http://www.oneshift.com/new_cars/lcoe.php.
[Accessed 19 November 2012].
Refer to: Appendix C, D, EThe COE price have been increasing in recent months, it actually affect the price of new cars for potential buyers. The buyers will now have to consider about the future costs of owning a vehicle, putting into considerations, the petrol price.
3.3 Inflation caused by Increases in Oil Price
Base on the chart below, the oil prices have been decreasing from the 1st to the 3rd quarter of 2011 and 2012. Aggregate supply increases as production and manufacturing process less due to lower spending.
SOURCE: [ONLINE] Available at: http://www.singstat.gov.sg/stats/themes/economy/ess/essa62.pdf. [Accessed 19 November 2012].
Refer to: Appendix F
Conclusion
With my findings on the above data and statistics, I believe Singapore is categorized under cost-push inflation. Workers should improve their skills to increase the level of labour and productivity, recommended by the Government. No one has the way of controlling the oil prices; hence the inflation will stay with the economic growth.
5.0 Referencing
Appendix A
Online Source
Available at: http://news.xinhuanet.com/english/business/2012-10/23/c_131925252.htm.
Appendix B
Online Source
Available at: http://population.sg/resources/workforce-composition/.
Appendix C, D, E
Online Source
Available at: http://www.oneshift.com/new_cars/lcoe.php.
Appendix F
Online Source
Available at: http://www.singstat.gov.sg/stats/themes/economy/ess/essa62.pdf.
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