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Singapore

‘Appropriately sized’ unemployment support among ideas for SkillsFuture revamp: Lawrence Wong

Singapore has been “cautious” about introducing unemployment benefits but it has “revised and refreshed” its thinking given the faster pace of change in the economy, says the Deputy Prime Minister.

‘Appropriately sized’ unemployment support among ideas for SkillsFuture revamp: Lawrence Wong

Singapore Deputy Prime Minister and Finance Minister Lawrence Wong at an exhibition on Sep 23, 2023 commemorating the late founding prime minister Lee Kuan Yew's 100th anniversary. (Photo: Ministry of Communications and Information/Liu Ying)

SINGAPORE: Singapore is looking at introducing “appropriately sized” support for involuntarily unemployed workers, as part of a revamp and expansion of the country’s SkillsFuture programme, Deputy Prime Minister Lawrence Wong said on Tuesday (Sep 26). 

“We don’t have to do this as an insurance scheme,” said Mr Wong as he delivered the keynote speech at the Economic Society of Singapore’s annual dinner.

“But we can have a government-funded benefit, appropriately sized, to help these workers tide through their immediate difficulties, while supporting them to continue with their upskilling and job search, and eventually bounce back stronger.”

The government has been “cautious” about introducing unemployment benefits “for a long time” due to “negative outcomes” in other countries, he said.

“Those who receive such generous benefits find it more attractive to stay unemployed, rather than get back to work.

“But looking at the faster pace of change and churn in our economy, we have revised and refreshed our thinking,” Mr Wong added.

He has spoken about a support scheme for displaced workers on various occasions this year. For example, during a parliamentary debate on then-President Halimah Yacob’s address in April, Mr Wong said the government was considering the introduction of a “targeted” re-employment scheme.

In his speech on Tuesday, Mr Wong, who is also Finance Minister, touched on how the government plans to deal with the twin challenges of inequality and mobility, especially in a “more challenging operating environment” marked by external uncertainties and domestic constraints.

He laid out various ideas being considered by the government to help advance the well-being of the middle class and uplift those in the lower-income, while ensuring Singapore remains socially mobile. 

Apart from support for displaced workers, other ideas include stepping up investments in adult education and training, and addressing a growing “college wage premium”.

Mr Wong noted that these were also issues discussed as part of Forward Singapore, a year-long nationwide engagement exercise spearheaded by the fourth-generation (4G) leadership team.

“We aim to wrap up the (Forward Singapore) exercise and release the final report soon. So, what I’m sharing with you tonight ... is a preview of some of the recommendations and ideas in this upcoming report.”

INVEST MORE IN ADULT EDUCATION AND TRAINING 

The well-being of Singapore's broad middle class can be advanced by providing maximum support for workers to stay relevant and competitive in their skills, so as to take on new and better jobs, said Mr Wong.

The government’s spending on its SkillsFuture programme has almost doubled to nearly S$1 billion this year, but it “can and will do more” to invest in lifelong learning and reskilling, he added.

Technologies such as artificial intelligence are already impacting jobs, with the momentum of such disruptions likely to “ramp up in the coming years” and result in many existing job roles becoming obsolete, he said.

While new jobs and opportunities will be created, it means that workers will have to be better prepared for multiple transitions in their careers.

In this case, older workers in their 40s and 50s are “especially vulnerable”, said Mr Wong. Caregiving obligations mean that it may be difficult for these workers to set aside sufficient time to refresh their skills.

“The government will therefore need to do more to help our workers adjust to this quicker pace of change and churn in our economy,” said Mr Wong. “We therefore plan to step up investments in adult education and training, and significantly strengthen SkillsFuture as a key part of our social system.”

Other areas that the government is looking at include top-ups to the SkillsFuture Credit for mid-career workers, as well as training allowances for mid-career workers who take time off to pursue full-time, longer-form courses. 

There will also be support for career planning and guidance, and better job matching to help workers move into roles that better utilise and reward their skills.

“Through these efforts, we can ensure that the majority of Singaporeans enjoy continued increases in their real incomes and living standards,” he said.

During a question-and-answer segment after his speech, Mr Wong was asked by an audience member about the returns on the country’s investments into adult education and training.

He replied that these may not be “easily quantifiable” or even pan out in the near term.

“But if we don’t even have these additional investments in human capital, it will be very hard for Singaporeans to adjust to a rapidly changing economy, to all the churn and disruptions in the workplace,” he reiterated, noting that this was "not something that we can just leave to the market”.

The government “has to step in” to provide better assurances and support for Singaporeans, while continuing to “uphold some basic principles” such as a sense of self-reliance and mutual support.

“If we can get that balance right – maintaining these fundamental principles while strengthening our mutual support network – then we will be in a better position,” said Mr Wong.

NARROWING “COLLEGE WAGE PREMIUM”

The government will also continue to improve schemes to uplift the incomes of more disadvantaged groups, while closing the country’s wealth gaps over time.

One focus is on Institute of Technical Education (ITE) students and graduates, said Mr Wong, pointing to a “growing divergence” over the past decade between the starting salaries of graduates from ITE and those from polytechnics and universities.

“Their starting salaries have all increased meaningfully in real terms, but those with higher qualifications, especially our university graduates, have been pulling further ahead,” said the Deputy Prime Minister.

“It’s not surprising. It reflects the college wage premium that exists everywhere in the world, but the college wage premium is probably on the higher side in Singapore.”

This has also showed up in the economy, Mr Wong said. 

For one, Singapore has “significantly higher occupational wage dispersion” than other advanced economies, especially between those who in more knowledge-based work like managers and professionals and those engaging in “hands and heart” work like technicians and service workers.

“To be clear, we will not be able to completely remove wage disparities in the economy, but too large a wage difference will create problems,” he continued.

“It is partly the source of education anxiety and stress as well because parents and children worry about getting to the ‘right’ pathways that will lead to the ‘right’ jobs for the future.”

Mr Wong said the government “will do all (it) can to reduce these wage gaps, encourage more diverse pathways, and instill dignity and respect for every job, every vocation and every skill”.

This will be done “industry by industry”, through redesigning jobs, raising productivity, upgrading skills and establishing better progression pathways.

“Good” progress has been made in sectors like pre-school education and nursing, and the government is studying how to do the same for other services and professional trades like plumbing and electrical works, he added.

Through industry efforts and close partnerships with ITE educators, the government aims to push up the starting salaries of local ITE graduates, while helping them upgrade their skills over time. 

“We will think of ways to do more to help our ITE graduates in their upgrading journey,” said Mr Wong.

But he stressed that the government “cannot achieve all this singlehandedly”. 

“It will require all of us – as employers or as consumers – to recognise the important work that our fellow citizens undertake to keep our society going, and do our part to uplift their progress,” he said.

ENABLING SOCIAL MOBILITY AND PHILANTROPHY

Mr Wong’s speech also extended to nurturing a culture of philanthropy and enabling social mobility.

On the latter, the government’s focus has been on children from more disadvantaged and vulnerable backgrounds, to prevent inequalities being transmitted to the next generation, he said. 

These include initiatives such as KidSTART to equip more lower-income parents with the knowledge and skills to support their children’s development. The government has also expanded affordable and quality pre-school places “substantially” over the years, with more subsidies for the lower-income.

“We will continue to spare no effort in ensuring every child has a good start in life,” said Mr Wong.

“These are some of our key ideas for Forward Singapore,” he told guests from the finance and business community, academia and public sector gathered at Fairmont Singapore.

“This is an agenda for our next phase of nation building, which has been co-created and shaped together with the many Singaporeans we engaged over the past year,” Mr Wong said.

“We want to ensure that Singapore remains a place where everyone can progress throughout life, and forge fulfilling and dignified lives, with greater assurance for today and for tomorrow.”

Source: CNA/sk(jo)

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