Latest news with #labourmarket
CNA
a day ago
- Business
- CNA
Commentary: The world of work is much more pleasant than we expected
LONDON: There is a market for sweeping economic analyses, generally predicting that the sky is about to fall on our heads. Thomas Malthus arguably started it with his 18th-century prediction that population growth would always run ahead of food production. He was unlucky in having his conjecture picked over for centuries. Normally, economists get away with it. Before reading the IMF's recent long-term prediction of global labour markets, therefore, I felt the need to go back a quarter of a century to see what similar organisations were forecasting. The OECD's 2000 report on 'reforms for an ageing society' is representative of the thinking at the time and its logic remains sound. Baby boomers in middle age would start to retire in the 2000s, it predicted, ensuring that total employment as a proportion of the population would start falling from 2010. This drop would be mitigated by more women working, but overall, the effective working life of someone in an advanced economy would hover around 34 to 35 years. CONTRARY TO PREVIOUS FORECASTS 'The data suggests retirement and active ageing are not yet going hand-in-hand,' the OECD concluded, adding, patronisingly, that evidence showed older people simply spent time on 'more television-watching and sleep'. What nonsense. Even though the world has had its fair share of economic crises since the millennium, the proportion of the population in employment is showing signs of rising rather than falling. An end to shorter male working lives and much higher employment rates among women have also ensured that effective working lives have risen beyond 38 years, far more than expected. Almost everything that the OECD described as a challenge has improved significantly. It is not often that columnists write about what has gone right, so it is worth examining why jobs and lifetime employment have done so much better than previously thought. The OECD might like to claim that these changes were caused by its own warnings, prompting governments to reform labour markets and retirement systems. It is a comforting thought for those working in international organisations, but highly unlikely. In a telling recent study, economists at Goldman Sachs noted there was precious little correlation between longer working lives and changes in official retirement ages in different countries. The trend towards longer working lives has taken place almost regardless of whether governments have undertaken targeted policy reform. LONGER WORKING LIVES Of course, this positive story cannot cover every employee in every workplace. The lower paid often work longer — or retire but then return to the workforce — to have even a basic living standard in retirement. This has been mitigated by the fall in male manual labour, so there are no longer large numbers of men physically unable to do their jobs, and that should persist as long as Donald Trump doesn't get his way with a return to manufacturing roles. The IMF showed increased cognitive faculties of older people over the last 25 years have been the biggest driver of the ability to work longer. As far as our brains are concerned, 70 really is the new 50, it concluded, so these trends can continue. Further efforts to make jobs work for older people can mitigate three-quarters of the projected slowdown in global growth due to ageing in the next 25 years, the IMF predicted. I know this is another bold forecast from economists. But the positivity is new and striking.
News.com.au
2 days ago
- Business
- News.com.au
New report settles Australia's working from home debate once and for all
This year we have seen a notable uptick in companies rolling back flexible working arrangements, with staff forced back into the office five days a week. One of the most common reasons bosses often give for scrapping remote and hybrid work is to 'improve productivity'. Well, we now have confirmation this is (most likely) not the truth. A new report from The Productivity Commission has explored the reason behind the Australian workforce's dip in productivity and, surprise surprise, working from home is not to blame. The report explores the phenomenon known as the 'Covid productivity bubble', which is where labour productivity rose to a record high between January 2020 and March 2022, before returning to pre-pandemic levels in June 2023. The Productivity Commission found the 'bubble' only served to mask the issues of Australia's ongoing productivity problem. 'The Covid-19 pandemic was a rollercoaster for productivity, but we are now back to the stagnant status quo,' Deputy Chair Dr Alex Robson said. The 'productivity loss' phase between June 2022 and June 2023 has been attributed to a surge in the labour market as Covid restrictions eased. Since then, the hours Australians work each week have been soaring, but this has not been matched by investment in systems and equipment needed to get the most out of the workforce, hence the drop in productivity, according to the report. One of the lasting changes brought on by the Covid-19 pandemic and subsequent lockdowns has been the shift to hybrid models. While there has been a push to get people back into the office full time, the rates of working from home are still significantly higher than pre-pandemic levels. According to the report, prior to the pandemic, 11 per cent of working age Australian adults reported working from home at least once a week over the previous four weeks, and 12 per cent worked from home on all or most days a week. During the severe lockdown, the proportion of those working from home at least once a week decreased to nine per cent and the number of people working remotely all or most days increased to 31 per cent. In April 2022, after lockdowns and restrictions eased, rates went to 18 per cent at least once a week and 27 per cent all or most days, indicating an increased popularity in hybrid arrangements. By August 2024, an Australian Bureau of Statistics survey showed 36 per cent of people reported that they usually work from home, indicating a sustained shift in work practices. Despite concerns and even some claims from industry leaders that the working from home shift would lead to productivity loss, the Productivity Commission found it didn't have any negative implications and, in fact, hybrid work can be beneficial. 'Workers do not need to be in the office full-time to experience the benefits of in-person interactions. As a result, hybrid work tends to be beneficial to productivity, or at least, is not detrimental to productivity,' the report states. Sabrina Scherm, customer success manager at HR technology company HiBob, claimed many companies are actually making the productivity problem worse with return to office mandates. 'These mandates fundamentally ignore the lessons learned during the pandemic's so-called 'productivity bubble', where workers demonstrated they could be highly effective when given the flexibility and autonomy to manage their time and working environment,' she said. 'To force employees back into rigid structures isn't just misguided; it actively risks stifling future productivity gains. 'Instead of focusing on an attendance-first mindset, the conversation must be around a results-first mindset. And we need to stop associating 'harder' work with 'longer' work.' Allowing workers to work from home some days a week can improve employee satisfaction and allows people the benefit of avoiding a commute, meaning they have additional time for other purposes, the report stated. The research also cited studies that indicate remote work can reduce breaks and sick days and result in less distractions, all of which are typically found to be beneficial to productivity. Ms Scherm believes the path to sustainable productivity lies in working 'smarter'. 'That means embracing modern tech to automate mundane, time-consuming tasks that add hours but little value,' she said. 'We can achieve genuine, long-term productivity gains by freeing up our workforce to focus on innovation and high-impact activities.' However, the report also included claims that fully remote work could have a greater negative impact on less experienced workers. For those starting out in the workforce, in-person interaction may be important for skill development 'as there may be a greater knowledge transfer from senior workers and junior workers through informal in-person interactions'. The Commission noted that the evidence on working from home is still evolving but, ultimately found hybrid work has either had a neutral or positive for labour productivity. 'There is no evidence to suggests that the trend towards hybrid working has contributed to the productivity loss phase of the productivity bubble,' the report stated.
Free Malaysia Today
3 days ago
- Business
- Free Malaysia Today
Master's degree does not guarantee higher pay, says SME group
A mismatch in the labour market has forced many master's degree holders to accept jobs that require lower qualifications and, along with it, lower salaries. (Freepik pic) PETALING JAYA : The perception that master's degree holders are earning less than expected given their qualifications only holds true in certain cases, says SME Association Malaysia president Chin Chee Seong. He said the problem stems from a mismatch in the labour market in Malaysia. 'There are limited roles that specifically require postgraduate qualifications, forcing many to accept lower-paying jobs typically held by degree holders,' he told FMT. Sharing his view is Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman, who pointed out that the relevance of some postgraduate qualifications is limited. Chin Chee Seong. Chin said the Malaysian job market has yet to reach a stage where there is a need for more of those with a master's degree. 'Employers are not averse to paying higher salaries. The question is whether or not it is necessary or justified,' he pointed out. Chin said the association has been urging the government to invest in tech-based industries and to push more small and medium enterprises (SMEs) to adopt advanced technology. He said that when industries embrace digitalisation, the need for specific technical skills that come only with postgraduate qualifications rises, making employers more willing to offer higher salaries. He noted that SMEs in some sectors, such as IT services, already offer 'relatively high' starting pay, with fresh graduates earning RM4,000 to RM4,500, depending on the role. Those with a master's degree in fields like computer science are more likely to earn higher wages, Chin said. However, postgraduates in areas like human resources or administration may not see the same returns, as these roles only require degree holders. A recent report by Permodalan Nasional Bhd (PNB) Research Institute said master's degree holders have seen a 10% decline in real wages in the decade leading up to 2022, compared with just a 4% drop in the previous corresponding decade. In contrast, degree holders saw a slight improvement in wage growth over the same period. Syed Hussain Syed Husman. Syed Hussein said factors such as underemployment and an oversupply of graduates have also contributed to wage stagnation. 'Without a corresponding increase in productivity and business performance, employers are unlikely to raise wages simply because an employee holds a higher academic qualification,' he told FMT. Syed Hussain said postgraduate degrees still offer value in specialised fields such as data science and engineering, but unless qualifications align with evolving industry needs, wage challenges for master's graduates will persist. He called for closer collaboration between academia and industry to ensure postgraduate programmes are aligned with market needs. The rate of skills-related underemployment stood at 37% in the second quarter of 2024, deputy economy minister Hanifah Hajar Taib said last year. He added that youth unemployment also stood at 10.6% for the fourth consecutive month in February, involving 306,600 people, which some attributed to a skills mismatch.
Independent Singapore
3 days ago
- Business
- Independent Singapore
MOM: 3.2% real wage growth in 2024 as inflation eased
SINGAPORE: A report published by the Ministry of Manpower (MOM) on Wednesday (May 28) showed that wages in Singapore have continued to grow, having gone up by 5.6 per cent last year. In comparison, wages went up by 5.2 per cent in 2023. The MOM also noted that the labour market remained tight in 2024. A tight labour market is characterised by a high demand for labour in relation to its supply, which means there are more job positions than workers available to fill them. A 'loose labour market', meanwhile, occurs when there are more workers than available positions. With inflation easing, real wage growth rose quite a bit in 2024, 3.2 per cent compared to 0.4 per cent in 2023. Additionally, as the economy continued to grow last year, four in five (80.8 per cent) of establishments remained profitable. This number is slightly lower than the previous year, when 82.1 per cent of establishments were profitable. The profitability of establishments varied across industries, with manufacturing seeing a rise in profitable firms, but real estate services, construction, and wholesale trade observed fewer profitable businesses. Last year, 78.3 per cent of businesses continued to raise the salaries of their employees, in comparison to 2023, when 65.6 per cent of firms did so. The report from MOM notes, however, that most firms that raised employees' salaries did so because of past organisational performance rather than forward-looking confidence. Regarding wage growth, senior management saw a slightly smaller rate of increase (5.1 per cent) than rank and file (5.8 per cent) and junior management (5.6 per cent) employees. The report says that this is partly in reflection of endeavours to offset cost-of-living pressures. Salary growth was seen last year across all industries, with Administrative & Support Services reporting the highest growth, 8.7 per cent. Financial Services (6.7 per cent) and Community, Social & Personal Services (5.7 per cent) also saw above-average increases amid continued demand for skilled workers. See also Prata Wala @ Nex apologises for letting its customers down However, workers in Food & Beverage Services (4.8 per cent), Wholesale Trade (4.2 per cent), and Manufacturing (5.1 per cent) saw below-average wage growth. 'Looking ahead, economic headwinds remain a key concern. With geopolitical tensions and global trade uncertainty persisting, business sentiments have softened. MOM's forward-looking survey conducted in the first quarter of 2025 also indicated a decline in the share of firms planning to raise wages in the next three months. These developments point to a potential moderation in nominal wage growth in 2025, relative to 2024, particularly in trade-reliant sectors such as Manufacturing and Wholesale Trade,' the report added. /TISG Read also: Singapore executive professionals most dissatisfied with salary growth amid wage stagnation over the past 3 years
Reuters
4 days ago
- Business
- Reuters
Norway plans $49 million annual tax cut for some young workers
OSLO, May 27 (Reuters) - Norway plans to randomly select 100,000 people born between 1990 and 2005 to receive annual tax cuts of up to $2,700 for several years, aiming to measure the effect on income and employment, the Labour Party government said on Tuesday. Facing rising social security payments and a shortage of workers in many sectors, successive Norwegian governments have explored ways to boost labour market participation by tweaking rules on state financial support and improving job training. But Tuesday's proposal by Finance Minister Jens Stoltenberg and Labour Minister Tonje Brenna takes this a step further, offering tax cuts for about 8% of workers between 20 and 35 years of age, while the rest see no change. If approved by parliament, the group of 100,000 people would become part of an academic study and receive the tax cuts of up to 27,500 Norwegian crowns annually for the next three to five years. They will be compared with those who do not receive the same cuts. "This will give us strong data on whether such a tax deduction really boosts youth employment, and on how much more or less those who are already in a job will work," the finance ministry said in a statement. The measure was estimated to cost some 500 million Norwegian crowns ($49 million) per year, the finance ministry said. Norway has a $1.8 trillion sovereign wealth fund, the world's largest, and spends tens of billions of dollars from the fund each year. ($1 = 10.1461 Norwegian crowns)
