SINGAPORE: Singapore does not just want to provide jobs, but to give everyone better jobs over time, Senior Minister Tharman Shanmugaratnam said on Tuesday (Jul 7).
This, he said, requires a “step-by-step” rather than a “sudden or drastic" approach that risks people losing their jobs.
“A steady approach that gives people confidence that they are improving in their jobs and gives employers confidence that the Government is going to work with them to help them to upgrade productivity,” he said.
Speaking in a session of Straight Talk on the People’s Action Party (PAP) Facebook page, Mr Tharman, who is also Coordinating Minister for Social Policies, emphasised that Singapore is “doing something that not many countries do”.
"We want to achieve very low rates of unemployment, as well as a good rate of growth of productivity and incomes," he said.
"Some countries achieve low unemployment by having everyone at work, but not seeing much improvement at work.
“Some countries go for restructuring of the whole economy. Technology replaces workers, workers leave the workforce, unemployment goes up.
“You've got to avoid both those options,” said Mr Tharman.
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He said that a S$2 billion jobs and skills package is far more beneficial to Singaporeans than spending the same amount on an unemployment benefits package.
“They’re both aimed at helping people who lose a job, but far better that we help him or her get back into the workplace.”
If there are not enough permanent jobs in the short term, then job seekers will first get structured training, he added.
“Then people feel they are useful, they are picking up new skills and they have got a pathway to a permanent job in future,” said Mr Tharman.
In his speech, Mr Tharman noted that the first and most immediate challenge is to avoid a surge of unemployment in Singapore.
The COVID-19 pandemic poses “special challenges”, he said, citing Deputy Prime Minister Heng Swee Keat’s message on Jun 5, that the country has to ensure that the young generation entering the workforce today “do not become a lost generation, or a COVID generation”.
And the first order of business is to prevent unemployment from spiraling up in Singapore.
“Keep it low,” he said. “This is a critical, immediate issue.”
He cited other economies such as Germany, Hong Kong and the United States, where unemployment numbers have now shot up.
To avoid high unemployment numbers, Mr Tharman said Government has introduced the Jobs Support Scheme and employers "know the Government is serious and trust the Government to do the right thing to preserve jobs".
Singaporeans have also been skilling themselves over the years, he added.
“That’s our system. Tripartite coordination, trust in each other, and everyone knowing that the Government will do what it takes to ensure that we do not see what happens in all these countries.”
RISE IN MEDIAN WAGES AND PRODUCTIVITY
Mr Tharman, however, also pointed out a “broader, long-term challenge” – sustaining the upward movement in incomes for the majority of Singaporeans.
Fundamentally, he said, this has been the case because productivity has been raised.
“One of the urban myths that circulate every time we have elections is that we failed in our productivity journey,” he said. “It’s just not true.”
Singapore had a tough decade at the start of the 2000s, he said, but the decision to “shift gears” on many fronts, such as foreign worker policy and incentives for firms to upgrade, has produced results.
Mr Tharman noted that over 10 years, median wages and productivity both went up by one-third.
“That is a story that is not seen elsewhere in the advanced world,” he said.
He also stressed the importance of keeping a “special focus” on those who are further behind – the lowest income workers. They too, he said, have seen an increase in their incomes, almost 40 per cent increase in wages in the last 10 years.
“The progressive wage model is working,” he said, adding that it is better than a minimum wage.
“It is a ladder of skills and wages that helps our lower income workers move up,” he said.
“It is growth to provide quality jobs for every Singaporean.
“Particularly for those who start off with low-paid jobs, it is growth to enable them to move up the ladder, with skills, better respect for the job, and a sense that they are able to contribute together with everyone else.”
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He noted too that with rising wages for lower income workers, over time, some costs will go up.
Such costs would include conservancy costs in a condominium or the cost of cleaning office premises, cited Mr Tharman.
“All of us as Singaporeans will have to pay slightly higher costs. But that is a small cost to pay for building a fairer and more equitable society, where everyone is moving up together," he said.
“We pay a much larger cost if we end up with a divided society.”