Currently there are more than seven million underemployed part-time workers across the euro area – those who would like to work more hours but cannot – an increase of around one million since the crisis. This may have important implications for inflation dynamics. While the main objective for workers in permanent work is typically higher wages, those in temporary or part-time positions may pursue objectives other than wage increases, such as fulltime employment or an increase in hours worked. Or if they do seek higher wages, they may be less likely to benefit from union representation and thus have less bargaining power. An increase in temporary or part-time employment as a share of total employment may therefore lead to less pressure on wage inflation. Recent estimates by ECB staff – which you can see on the right-hand side of slide 4 – suggest that broader measures of labour market slack, including the unemployed, underemployed and those marginally attached to the labour force currently affect around 18% of the extended euro area labour force.10 This broader measure of slack also appears to be less sensitive to GDP growth than traditional measures: it has declined rather less than the reductions in the unemployment rate over the course of the recovery – a broader version of Okun’s, law if you will. And our analysis suggests that this might help explain why underlying inflation has been so sluggish recently.
17 There is another feature to this collaboration here, which is to bring start-ups together with venture capital and other investors. tryb is an investor in promising technology start-ups that are building the financial infrastructure platforms of the future for ASEAN. tryb is currently in the process of raising $ million in long-term funding. The Marvelstone Group too, has been investing in FinTech start-ups and linking them up with their network of business and specialist expertise. Further MAS initiatives to grow VC activity 18 MAS is working with the VC industry to grow the funding landscape for start-ups in Singapore and the region. The role VCs play in stimulating economic dynamism has been a recurring theme in discussions of the Committee on the Future Economy (CFE). 19 There are two key prongs in MAS’ approach. 20 First, MAS is reviewing its regulatory regime for VC managers. Specifically, MAS is looking to significantly simplify and shorten the authorisation process for new VC managers. Further, to the extent that there are contractual safeguards to provide sufficient protection to a VC’s sophisticated investor base, MAS is also looking to exempt VC managers from business conduct requirements that are currently applied to asset managers in general. MAS will be doing a public consultation on its proposals in January next year, and targets to introduce changes by July 2017.