Low stipends test Singapore graduates in tight job market

Singapore’s government is using subsidized traineeships to give unemployed graduates a foothold in a weaker entry-level job market. The program matters because some graduates say the temporary roles come with low pay, uncertain prospects and a stigma that can make them feel like a fallback rather than a career start.

The Graduate Industry Traineeships program, known as GRIT, places graduates with government agencies and private companies, Bloomberg News reported. Participants receive monthly allowances of S$1,800 to S$2,400, or about $1,400 to $1,850, according to the Ministry of Manpower program details cited by Bloomberg.

The low end of that range is less than half the median starting pay for graduates, according to Singapore’s Ministry of Education graduate employment survey. Bloomberg also reported that it is about two-thirds of the pay for a McDonald’s management trainee role listed by e2i, which requires only a pre-university diploma.

Lee Jia En, a 25-year-old Singapore University of Social Sciences graduate, told Bloomberg she felt discouraged when she joined the scheme because friends were earning far more. She said she accepted the role because it could help her reach a better job later.

The program comes as graduates in several economies face a tougher search for full-time work. Bloomberg attributed the broader weakness to rapid adoption of artificial intelligence, slower hiring after the pandemic and economic fallout tied to the Iran war.

Singapore’s position as a trade-dependent and energy-importing economy has added pressure, according to comments from officials cited by Bloomberg. Manpower Minister Tan See Leng said in May that heightened uncertainty had made businesses more careful about hiring, while Prime Minister Lawrence Wong has warned that AI will cause some current jobs to vanish.

The labor market has shown mixed signals. Retrenchments in Singapore reached their highest level in nearly three years in the first quarter, Bloomberg reported, while the unemployment rate stayed at 2%.

Graduate outcomes have also weakened in some fields. Full-time employment rates for business, arts and science graduates across Singapore’s six universities fell by about 10 percentage points from 2023 to 2025, according to the annual graduate employment survey published in March.

The Ministry of Manpower created GRIT against that backdrop, following a similar traineeship effort introduced during the Covid-19 pandemic, Bloomberg reported. The government funds about 70% of each trainee’s fixed compensation range, while employers pay the balance.

That subsidy has helped companies take trainees despite cautious hiring, participating businesses told Bloomberg. Oversea-Chinese Banking Corp. offered 50 slots and hired 40 trainees in roles including data analysis and credit analysis, according to Lee Hwee Boon, the bank’s head of human resources.

Demand from graduates has been weaker than expected. Applications dropped about 90% between the program’s launch in October and February, and more than half of 800 roles had been filled by March, Tan said in a parliamentary answer cited by Bloomberg.

Tan attributed the lower uptake to applicants turning down placements after finding other opportunities. The Ministry of Manpower, responding to Bloomberg, pointed to Tan’s parliamentary remarks.

Some academics and graduates see another reason. Kelvin Seah, an associate professor of economics at the National University of Singapore, told Bloomberg that graduates may avoid GRIT if they believe employers and peers see it as a program for those unable to find regular work.

Pay can also weigh on graduates who fear future employers will benchmark offers against their most recent compensation, Bloomberg reported. Lee said she felt ashamed joining a scheme her friends avoided, and said her supervisor assigned her basic administrative work because of the allowance level; she later secured a permanent role with the same government employer.

Other graduates described the traineeships as financially strained and uncertain. Ng Hui, a 26-year-old information systems graduate from Singapore Management University, told Bloomberg that his S$2,400 stipend does not make much progress against S$50,000 in university loans, so he tutors students after work while preparing for interviews on weekends.

Phang Jun, a 24-year-old Singapore Management University communications graduate, told Bloomberg she applied for 100 jobs and received three low-paid offers outside her field before entering a tech company traineeship. Without a guaranteed permanent role, she said she is using the placement to build contacts and is open to a wider range of jobs as another graduating class enters the market.

This story draws on original reporting from Fortune.