Taking Stock, Looking Forward.
28 December 2012
Acting Minister (MOM) Tan Chuan-Jin interacting with Ms Chris Tham, 67-year-old, Golden Employee of 7 Eleven at Dairy Farm Singapore's Golden Employees Celebration held in 2012
We are three days away from the end of 2012 and the start of the New Year. All in all, 2012 was a reasonably decent year. Real median income of full-time employed citizens grew by nearly 1%P. Citizen unemployment remained very low at 3.0% in September in spite of the slowing economy. Significantly, the employment rate for older persons aged 55 to 64 improved (from 61.2% to 64.0%). Indeed, due to a tight labour market, employers have also improved their HR practices. For instance, more employers offered work-life arrangements in 2012 – four in ten (41%) establishments offered at least one form of work-life arrangement, such as part-time working, flexitime, and telecommuting. This is an encouraging trend but there remains lots of room for employers to do more.
On the foreign manpower front, we passed the first tranche of amendments to the Employment of Foreign Manpower Act (EFMA) to more effectively deter, enforce against and punish contraventions. We created new standalone contraventions, raised penalties, established an administrative penalty regime and enhanced our investigatory powers. These steps can help stem the worst abuses against foreign workers. Importantly, they will also help Singaporean workers as it maintains the integrity of the work pass framework by ensuring that employers pay the true cost of hiring their foreign workers.
We also smoothly introduced the Retirement and Re-employment Act, to enhance the employment opportunities for older Singaporeans. CPF LIFE was also simplified, to better provide members with an income for life. In addition, we embarked on a major review of the Employment Act, to ensure that it remains relevant and responsive to the needs of the changing workforce.
While we have made encouraging progress, there is still room for improvement, such as the areas of workplace safety and health, labour relations and how we look after the more vulnerable workers in our midst, including low wage workers, foreign workers and foreign domestic workers. We must continue to do more for everyone in the workforce in the year ahead – workers and employers alike – especially with signs that 2013 is likely to be challenging.
What will 2013 bring?
There are some sobering realities we must come to accept.
Our projected GDP growth for 2013 is 1-3%. In part, we have been affected by the uncertain global economic outlook – with Europe in recession, Japan seeing very slow economic growth and all eyes on how the US will resolve its fiscal cliff.
At home, Singapore’s economy is also undergoing re-structuring. This economic and jobs transformation, though painful, is an essential process so that Singapore’s economic growth can be sustainable. To achieve our long-term productivity goals, we will continue to moderate the growth of the foreign workforce. So we must continue to find ways to grow our economy by adding fewer workers. On the tripartite front, the government, employers and unions will have to work even harder to strengthen industrial relations. The illegal strike by PRC bus drivers last month underscored this important lesson.
Overall, the labour market will continue to remain tight, if not become tighter, going into 2013. The pressure on businesses to expand through product innovation and making their workforce more productive will be more intense. Why does productivity matter?
While our strong growth in employment may at first glance sound good, what we need to look at is the quality and how that growth is generated. Our year-on-year rate of growth in employment level has exceeded the rate of GDP growth in the past four quarters. This has resulted in negative productivity growth. This means that with every additional worker employed, our economy became less productive on average. So businesses will need to create jobs that are higher-value and higher-skilled for our increasingly educated labour force. Over time, productivity improves and sectors move up the value chain. It is with more Singaporeans taking up skilled jobs, that their pay will rise faster than inflation. At the same time, we will need to keep unemployment low, and ensure inclusive growth for all.
We all have a part to play in creating sustainable inclusive growth for Singapore. As our country continues to reduce our reliance on labour through further moderation of our foreign manpower growth, companies need to embrace this reality and start focusing on improving work processes or innovating to be more productive. Workers too need to up-skill so that they are equipped to handle new work processes that will replace the old laborious and not so efficient ways.
The Government will continue to support the efforts of businesses here. For companies, there is substantial assistance to firms through various productivity initiatives, including iSPRINT, Productivity and Innovation Credit, and the Inclusive Growth Programme which is specially designed for companies to transfer productivity gains to their employees. Through WDA and business associations, the Government also supports efforts to match job seeks with jobs. We will look at doing more here in 2013.
For workers, we have the Continuing Education and Training (CET) Programmes, which we update regularly so that their skills remain relevant to industry needs. For our low-wage workers, up-skilling is all the more critical. Through the Workfare Training Support Scheme or WTS, we provide incentives for them to go for training, so that they can upgrade their skills, improve their employability and productivity and earn more.
To ensure that Workfare provides adequate encouragement for workers to upgrade and earn more, we are reviewing the amount of support that we give out through the Workfare. At the same time, we want to focus our attention on Singaporeans who most require our help – the bottom 20% of Singaporean workers, who are usually older as well. To do so, we will be reviewing the eligibility criteria for the two schemes. We will announce the Workfare review outcome in early 2013.
Amidst these challenges, we are looking forward to a full agenda in 2013. Besides the Workfare review, we are also reviewing our national labour legislation – the Employment Act. This is aimed at enhancing basic employment standards for our workers while giving employers sufficient flexibility to manage their manpower resources. We are still seeking feedback from the public and we look forward to announcing the first phase of the recommendations in the first quarter of 2013.
Even as local workers remain at the heart of what we do, we will also press on with the second phase of the EFMA review. We will strengthen the protection for migrant workers whilst at the same time ensure a fairer balance of rights and responsibilities between employers and workers. The weekly rest-day for Foreign Domestic Workers (FDWs) will also kick in for FDWs whose work permits are issued or renewed from 1 Jan. This is a major step in improving the employment conditions for our domestic helpers that ultimately benefit Singapore households that employ them.
Establishing the right environment cannot just depend on laws and regulations. Culture and attitude matter, and that is where the real fundamental changes occur. This applies as much to management as it does to our approach to safety as well as a better work-life balance. We will continue to work on these areas.
Our commitment to do the right things, remains. While we recognise the inevitable trade-offs and the need to be practical, it does not necessarily mean it is at odds with the values we hold. In fact, our policies and the culture we establish should reflect the kind of society we want to build. And if we all care enough to reach out and make the difference, things will change.
Have a safe, happy and meaningful 2013 ahead!
Acting Manpower Minister
P Preliminary figure. The finalised figure will be released at end Jan 2013.