“On May Day, Singapore traditionally celebrates the reconciliation of labor and capital. "Three, two, one," the host bellows at a recreation center in the east of the island, set to a backdrop of symphonic film music: "Happy May Day!" Everyone raises a clenched fist—including the invited business leaders and government cabinet members, who, like the rest of the audience, have turned out in revolutionary red.
Singapore’s umbrella trade union has set up its banner in front of the stage, flanked by the logos of employers and the Ministry of Manpower. "Tripartism" is the name given to this non-aggression pact between the parties to collective bargaining in Asia’s financial hub—a system that, under the government’s watchful eye, has permitted only a single strike since the Republic’s founding in 1959. Yet now, harsh words are disrupting the feel-good event.
In his opening remarks, the union leader warns of "concern" and "uncertainty." As Prime Minister Lawrence Wong makes his way to the microphone, a sense of unease settles over the hall, particularly in the front row. That is where Singapore’s ministers sit, earning an average salary of 1.1 million Singapore dollars (740,000 euros). The public expects this highly paid leadership to safeguard their standard of living—one of the highest in the world. Nearly half of the union members earn between 8,000 and 12,000 dollars (5,400 to 8,100 euros) a month. Yet many, Wong tells the horrified audience, will soon be replaced by machines.
The impact of artificial intelligence (AI) on Singapore’s labor market will be "massive," Wong declares. He knows of business owners who have already replaced entire teams of human employees with algorithms capable of performing highly complex tasks. "Some jobs will disappear," Wong exclaims. "The pace of change will be faster than anything we have experienced before."
As AI carries out its disruptive work, Singapore’s government will leave no one behind, the Prime Minister promises. As proof, he recalls the rescue of Singaporean victims of a volcanic eruption some time ago. It is easy to feel overwhelmed by the world's technological transformation, Wong exclaims. In the end, he himself is overcome by emotion.
His tears reflect the mood in the city. Of all places, Singapore—that high-tech metropolis of superlatives, that island of prosperity—feels as threatened by artificial intelligence as almost any other country in the world. Because its gleaming towers house so many skilled professionals in banking, insurance, and consulting, the city-state is "highly" exposed to the growing use of AI in the workplace, warns the International Monetary Fund. Half of the workforce will benefit from AI, the IMF writes; the other half will not. Women and young people, in particular, are at risk. The risk of social inequality is rising in the city.
Experts remain divided on the impact of AI on the labor market. Singapore, however, has already sided with the pessimists. There is "no economic law stating that new technologies always create more jobs than they destroy," says Prime Minister Wong. Yet, historically speaking, neither the steam engine, the assembly line, nor the computer has caused mass unemployment.
However, when Singapore’s largest bank, DBS, announced last year that it would cut 4,000 jobs due to the adoption of artificial intelligence, many felt their fears—which had long been gnawing at the island—were confirmed. A year earlier, Deputy Prime Minister Gan Kim Yong had warned that skilled professionals, executives, and managers were precisely the ones at risk of being "replaced by AI." As early as eight years ago, the analytics firm Oxford Economics warned that one-fifth of all jobs in Singapore would fall victim to AI by 2028.
So far, there are few signs of this suggests that the dire warnings are coming true. The metropolis of six million inhabitants has enjoyed full employment for years. Admittedly, university graduates in Singapore are finding it harder than in the past to quickly secure a well-paid job. Employers often attribute this to applicants lacking sufficient knowledge of AI. However, the job market for entry-level professionals is tight in many other countries as well—a situation that has persisted since the pandemic.
In surveys, six out of ten Singaporeans say they fear that AI will leave them unemployed. This fear of technological change is no greater than in the United States or the United Kingdom—countries where a frustrated majority is turning to populist parties. In Singapore, by contrast, polls by the research institute Gallup show that 90 percent of citizens believe their sun-drenched country is heading "in the right direction." The city-state is so safe that people do not need to lock up their bicycles outside subway stations. If citizens spot a bit of dirt on the street outside their homes, they simply message their Member of Parliament via WhatsApp, and a cleaning crew arrives an hour later.
Yet, anxiety prevails among his circle of friends, reports labor economist Walter Theseira of the Singapore University of Social Sciences. His friends are all middle-aged parents for whom AI is a constant topic of conversation. For them, the question is no longer whether algorithms will take away the jobs they once thought they excelled at, says Theseira; the only thing left to discuss is the timing. "Public sentiment is quite low. People are constantly looking around and asking themselves: What will happen to my job?" This anxiety seems at odds with the macroeconomic data—full employment, an unemployment rate of two percent, and economic growth of 4.6 percent in the first quarter. Yet there is no doubt, says Theseira: "We are heavily affected."
Every report of layoffs due to AI triggers a social tremor in the city. There has just been another significant jolt. At 4 a.m. on Wednesday, employees of Meta (Facebook’s parent company) in Singapore found termination notices in their email inboxes. Company founder Mark Zuckerberg intends to focus investment almost exclusively on AI, cutting costs elsewhere. Globally, ten percent of Meta’s workforce—amounting to 8,000 jobs—must go. Microsoft plans to lay off 23,000 people to recoup the billions spent on AI development. Amazon, which has its Asian headquarters in Singapore, has already cut 14,000 administrative jobs globally, citing AI; according to media reports, the company internally projects that 600,000 jobs will either be replaced by AI or never created in the long run.
British bank Standard Chartered, which employs 9,000 people in Singapore, is currently trying to douse the fire ignited by its chief operating executive, Bill Winters. The bank had announced plans to cut around 8,000 jobs over the next four years. Winters, the bank's CEO, explained that this move was not merely about cost-cutting but, in some instances, about "replacing lower-quality human capital with financial capital and investments" as part of the bank's streamlining efforts. This infuriated figures such as Singapore's former President Halimah Yacob, who criticized the banker's choice of words as "disturbing."
It is not always clear, however, whether banks are simply using artificial intelligence as a pretext for job cuts. In Singapore, Standard Chartered faces claims for damages totaling US$2.7 billion over allegations of money laundering and the concealment of billions of dollars linked to the Malaysian sovereign wealth fund 1MDB. The bank had clearly justified previous rounds of cost-cutting by citing insufficient profits.
Yet such considerations do little to alleviate fears regarding AI in Singapore. Concern is so great that the city-state is now even breaking with the ideology of its founder. "We don't pay you to sit around," Lee Kuan Yew once declared, thereby rejecting any attempt to build a German-style welfare state in Southeast Asia. Year after year, think tanks attest that Singapore enjoys the greatest economic freedom in the world—a status defined not only by low taxes but also by famously low non-wage labor costs. However, last year the government introduced unemployment aid for the first time, specifically tailored to those affected by AI. At the time, the prevailing view was that the technology would primarily impact the low-wage sector. That is now changing, and plans are underway to increase financial assistance.
To date, individuals who have become unemployed "involuntarily" receive a total of up to 6,000 dollars (4,000 euros) over a six-month period—though only if the applicant previously earned less than 5,000 dollars (3,370 euros). Speaking in parliament four days after the May Day rally, union leader Ng Chee Meng criticized this policy for excluding skilled professionals and managers who earned significantly higher salaries. He argued that Singapore could not afford to experience "jobless growth"—economic expansion without job creation—in the age of AI. The state-appointed labor leader called for aid levels to be raised to match the average salary of high earners.
The government has signaled openness to increasing unemployment benefits. However, the Manpower Minister rejected a further parliamentary proposal to remove all caps entirely and instead pay laid-off employees a fixed percentage of their former salary—similar to the German unemployment benefit system. Nevertheless, he intends to review all proposals. Economist Theresia predicts that the question will arise as to whether the state is prepared to continue shouldering the burden of protecting citizens against AI-related risks on its own. He envisions introducing the solidarity principle found in German social insurance into Lee Kuan Yew’s liberal state: "There could be a co-financing arrangement where employers contribute alongside employees."
To prevent the financial hub from turning into a "transfer state" as a result of the AI hype, the government has assembled a hodgepodge of education and training programs. Economists at DBS Bank have assessed Singapore’s infrastructure for AI application as nearly perfect. However, when it comes to the workforce's actual mastery of AI, the city lags far behind San Francisco and New York. Now, the plan is to train 100,000 Singaporeans as "AI-bilingual professionals." All citizens over the age of 25 are entitled to at least 500 dollars (340 euros) for AI courses. Small and medium-sized enterprises receive funding to provide additional training for their staff. For children, the AI era is now beginning as early as the fourth grade.
Two autumns ago, it was twelve-year-olds at Pasir Ris Primary School in northeastern Singapore who would open their laptops in the morning and launch the math bot. The program presents problems involving fractions and percentages and corrects students when they make mistakes. The robot appears on the screen as an animated human figure and is available even when the teacher is busy. "Pedagogy for one"—instruction tailored to the individual—is the concept Singapore is using to harness AI in education: the robot has endless time for every student, who is introduced to the new technology under human supervision. A year and a half later, the government now intends to lower the age limit and allow children as young as nine to learn using AI. This move is controversial among parents; there is widespread concern that children will simply have robots solve every question for them and fail to learn anything of substance.
In reality, it is questionable to what extent the state can train people for AI. Primary school students have already been learning programming for ten hours a year since 2010. Given the emergence of new AI assistants capable of writing their own code, that effort was likely a "waste of time," says economist Theresia. AI literacy, she notes, is a "moving target." No amount of training will enable the state to turn large numbers of Singaporeans into the kind of AI experts for whom companies pay billions. A joke circulating among bankers suggests that the 500 dollars each person receives for AI courses might be better spent on foot massages. A better strategy, Theresia suggests, might be to make Singapore attractive to AI experts from around the world—experts whom the state can then tax.
The idea that the AI revolution in the economy will soon create many new jobs—as some economists and sociologists anticipate—remains, for now, merely a hope in Singapore. OpenAI, the company behind ChatGPT, recently announced plans to invest 300 million Singapore dollars (200 million euros) in the city. The government is using this as proof that AI brings benefits, but in truth, it could be yet another warning sign.
The 200 OpenAI employees are intended to "work directly with companies on their most difficult problems," the American firm explained. Their task will be to unlock new customers and "new revenue streams" for OpenAI’s AI bots. An OpenAI executive in Singapore, who prefers to remain anonymous, reveals what this means: "From morning till night, banks and insurance companies are beating down our door, wanting to know how many employees they can lay off—and when." [1]
1. Angst auf der Insel: Nirgendwo scheint der Wohlstand vieler so sehr von Künstlicher Intelligenz bedroht wie im wirtschaftsliberalen Hightech-Staat Singapur. Mit Milliarden Dollar will die Regierung nun Massenarbeitslosigkeit verhindern - und zahlt erstmals auch Arbeitslosenhilfe. Frankfurter Allgemeine Zeitung; Frankfurt. 23 May 2026: 21.Von Hendrik Ankenbrand, Singapur
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