Singapore is bracing for a super-aging society

By Daniel Moss

Never mind the legions of imported bankers, engineers, stevedores and nannies. Singapore's attraction for these pillars of a successful hub is well documented. However, it obscures the country's shifting labour needs. The next front in the battle to recruit, and retain, talent doesn't target elite brains or sweaty brawn, but reflects its profile as a rapidly aging society. The new hot commodity is healthcare.

Singapore's punishing demography, and the need to address it, was underscored Wednesday when a minister revealed that a key measure of fertility tumbled to yet another record low. Japan and South Korea are the poster children for this type of decline, rich economies that aren't churning out enough kids even as the ranks of seniors multiply. More recently, China's dwindling population added to the gloom surrounding the former juggernaut. Singapore gives them a run for their money.

Unlike China, Singapore grew rich before becoming old. And setting the city-state apart from Tokyo and Seoul has been a longstanding policy of topping up local headcount with workers from abroad whose skills the island can use. While this approach has always had caveats, and has ebbed and flowed with domestic politics, seldom has it been more valuable.

When the government announced special retention payments for nurses last week, it had a couple of objectives: acknowledge the vital work done during the pandemic, and prevent people from leaving for more lucrative opportunities. The payouts of up to S$100,000 ($75,000), staggered over 20 years, also nodded to a broader challenge. While a young workforce was a huge boost to development generations ago, Asia is graying quickly, and more than two children count as a large family. Critically, the pay boost was open to foreign nurses already employed in Singapore, depending on the length of time spent in the country. Many of them are from the Philippines.

The city-state is no stranger to existential struggles. The journey from an impoverished backwater in the 1960s to one of the richest nations on earth is among the republic's main narratives. Top ministers often evoke a sense of struggle against the odds when trying to get citizens to focus on big hurdles. The demands of an aging society and efforts to boost births have been getting much attention lately. By 2030, the government projects that almost a quarter of the population will be 65 or over. It makes perfect sense to reduce dependence on income tax. And consumption tax rates have been rising the past few years; the goods-and-services levy increased to 9 per cent in January. Contributions to the state pension plan were lifted for those aged between 55 and 65.

“We are an aged society; soon we will be a super-aged society,” Prime Minister Lee Hsien Loong said in last year's National Day Rally, the rough equivalent of the US State of the Union address. “This has massive social and economic implications. We have much to do to help our seniors age well.”

There’s a gentler side, too. The state regularly dangles incentives on couples to get busy. Paid paternity leave was increased to four weeks. The budget for the fiscal year beginning April, unveiled last week, included subsidies for Singaporeans aged 40 and older to get a diploma or enroll in undergraduate programs. One great initiative that was rolled out in 2022 were posters, featuring kindly looking cartoon giraffes, at subway stations promoting dementia go-to places. (Unfortunately, the poster at my local station was recently removed. In its place is an advertisement for online shopping. Staff pointed me toward a barcode with information on missing persons, lost and found and so on.)

The financial incentives for nurses also touched another nerve in East Asia's jobs market. The Philippines, which sends most of its nurses abroad, wants to keep them closer to home. But while several efforts are underway to improve their pay and benefits, they can't compete with the lure of significantly higher salaries overseas. At one point during the peak of the pandemic, the Philippine government banned nurses from departing.

During a reporting trip last year, I met several nursing students and faculty at Manila Central University. All remarked on aggressive recruitment campaigns from foreign hospitals, including Singapore. For some, the ability to make a home and bring family with them determined which way they would jump. Others were candid about purely financial incentives.

In Singapore, nurse Herrera Jacqelene Kaye Zubieto said the government’s payouts made the difference between putting down roots or venturing further afield, possibly to the UK. “If there was a chance to go overseas, I think I would have gone,” she told the Straits Times. “But now, with this news, I'm glad to stay here in Singapore.”

Strains in the labour market aren't limited to Singapore. South Korea, whose total fertility rate plummeted to an all-time low of 0.72 last year, faces industrial disruption. Trainee doctors walked off the job last week to protest plans to dramatically increase spots at medical schools. The country has a chronic shortage of physicians, as it does of people, generally. (A fertility rate of 2.1 is the level at which a population naturally replenishes itself. Singapore's fell to 0.97 last year, according to a preliminary estimate.)

To some extent, Singapore is a victim of its own success. Family-planning posters from the 1970s on display at the national museum urge couples to stop at two kids. Incentives were doled out to brake reproduction. The approach worked too well, as it did in South Korea, where leaders saw smaller families as a way to eradicate poverty after the Korean War. Prosperity also tends to bring smaller households, regardless of location.

An aging planet is bringing a recalibration of what work is valued and why. Sure, robots and artificial intelligence will carry some of the load. Currency traders and technology executives are all well and good. What they won't do is care for the growing ranks of the elderly or the precious few arrivals at maternity wards. The next chapter in the Singapore story is being written, and it’s carrying a clipboard.