A key measure of the health of an economy is whether those who want to work can find jobs. In 2014, out of every 100 people in Singapore’s labour force, only 3 were out of work though they were looking for a job. This seems like a really low number but how low is low? Let’s take a closer look.
Chart 1 shows that our overall resident unemployment rate at 2.7 percent in 2014 is much lower than that of many developed economies in the world. For example, Norway which ranks after Singapore has an unemployment rate of 3.6 percent in 2014. This is a very low number, because it's virtually impossible to achieve zero unemployment, as there will usually be about 2 to 3% of workers graduating from school or switching jobs at any point.
What about our youths? Can they find work after graduating? Chart 2 shows that Singapore has one of the lowest youth resident unemployment rates in the world. A large majority of our tertiary graduates found jobs within 6 months of graduation. In contrast, in countries like Greece and Spain who were in economic difficulty in 2014, about half their youth population were unemployed as jobs were scarce.
So, what has kept our unemployment rates low? Chart 3 shows how economic growth and unemployment rates have a close inverse relationship – meaning their trends tend to move in opposite direction. Unemployment rates are kept low when our economy is doing well, and rise when the economy is sluggish. For example in the last global financial crisis in 2009, our real GDP growth rate plunged to negative 9 percent while the resident unemployment rate rose in tandem to about 5 percent.
So when it comes to providing jobs for Singaporeans, Singapore's economy is among the best in the world. This is really quite a feat, as we have transformed from a developing city to a bustling metropolis today, where companies want to invest and set up businesses.