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Senior Minister of State for Manpower Mr Zaqy Mohamad at Committee of Supply October 2020

Introduction

 

  1. Mr. Speaker, Members of the House – the Ministry of Manpower understands that Singaporeans have been through much hardship over the past few months. 
    1. Many members have spoken on the challenges and concerns of our workers across all segments.

     

  2. Our infection rates have gone down, and we have been able to proceed with the slow and steady re-opening of our economy.

     

  3. Yet, it would be a mistake to think that we are going back to pre-COVID norms. 
    1. As other speakers in this House have observed, it is unlikely that things will be the same again. 
    2. Many industries will take time to recover, and when they do, they will look quite different compared to now. 
    3. The way we work has already changed, and will continue to change. For instance, companies and workers alike have had to adapt to telecommuting. 
    4. Not all of these changes are bad. On the contrary, the pandemic has spurred the pace of digitalisation, upskilling, improving the resilience of workforce and supply chains.

     

  4. The Government has put in place substantial effort and resources to help our businesses and workers deal with the impact of the pandemic. 
    1. For example, we have provided extensive support to businesses through the Jobs Support Scheme, with wage subsidies of up to 75%, to help businesses retain workers. 
    2. DPM has announced that this support will be extended until next March.

     

  5. Right now, our focus must be to help our businesses and our workers to emerge stronger from this crisis, and to seize new opportunities ahead. We should work on the basis that short-term relief measures will continually eventually taper off. This is why economic agencies under MTI as well as agencies that lead the ITM sectors, such as MAS and IMDA, are intensifying efforts on job creation. 
    1. MOM and WSG will work with these agencies to support employment. 
    2. Well before the JSS phases out, we have introduced the Jobs Growth Incentive (JGI).
      1. The JGI will provide salary support for businesses who bring forward their hiring plans and hire more locals.
      2. Eligible employers will receive up to 25% of the first $5,000 of gross monthly wages, or $15,000 for up to 12 months for new local hires aged below 40.
      3. For each new mature local hire aged 40 and above, for all persons with disabilities, Government support is doubled to 50%.
      4. Thus far, we have committed $1bn to support this initiative, and we encourage more firms to make use of the JGI to expand hiring.

     

    SGUnited Jobs and Skills

     

  6. The SGUnited Jobs and Skills Package is our key push to help our workers to enter new jobs. Where this is not yet possible, we are helping jobseekers acquire the skills that will put them in a stronger position when the economy begins to recover. 
    1. It pulls together jobs and training opportunities for Singaporeans across the public and private sectors. 
    2. Under this Package, we have curated 117,500 jobs as at end-August, including jobs, company-hosted traineeship, attachments and training opportunities, and training places. 
    3. With the exception of the SGUnited Traineeships which are designed for fresh and recent graduates, these opportunities are all open to mid-career individuals. 
    4. More than 33,000 jobseekers have been placed into SGUnited Jobs and Skills opportunities.

     

  7. Mr Saktiandi Supaat asked about how the Government determines the number of job opportunities available under the SGUnited Jobs and Skills Package and the job roles created by the top hiring sectors. 
    1. We have been putting out the number of committed opportunities available under the SGUnited Jobs and Skills Package in our weekly Job Situation Reports. 
    2. The number of committed opportunities is based on:
      1. Approved places under the various SGUnited Jobs and Skills programmes such as career conversion programmes, traineeships, company attachments and training courses;
      2. Public sector and other Government-funded jobs; and
      3. Private sector jobs that are advertised on the national MyCareersFuture.sg jobs portal.

     

  8. There are opportunities in almost every sector. Not surprisingly, the key contributors are growth sectors such as Information and Communications, Healthcare, Professional Services, Finance & Insurance, and Manufacturing. 
    1. Examples of jobs in the top five sectors include:
      1. Software,
      2. Web and Multimedia Developers, Nursing Professionals,
      3. Management and Business Consultants,
      4. Financial Analysts, and
      5. Engineering Professionals. 
    2. But I should also point out that even in sectors badly-hit by COVID-19, there is hiring.
      1. In tourism and retail, for example, business models are changing fast.
      2. Employers see a need to reskill existing staff as well as bring in fresh talent. It is therefore important not to write them off.

     

  9. To help our local jobseekers access and get more information on the available jobs and skills opportunities, Workforce Singapore has organised various career workshops, seminars and walk-in interviews, reaching about 38,800 individuals between July and September 2020. 
    1. We have also brought career matching services closer to the heartlands.
      1. So we have launched the SGUnited Jobs and Skills Centres in phases since early July, and by end-August, one had been set up across all 24 HDB towns.
      2. Although all satellite career centres were only in operation from end-August, Career Ambassadors have advised around 4,200 jobseekers by now. 
    2. We are heartened to hear Mr Liang Eng Hwa’s sharing that his constituents have found this to be helpful, and that many were able to secure jobs after going to these centres.

       

    Helping Workers Adapt

     

  10. Now, that being said, when so many businesses are restructuring, mismatches in jobs and skills must be expected. 
    1. We recognise the tremendous adjustments needed by both jobseekers and employers, to give each other a chance even if they don’t look like perfect fits. 
    2. Many jobseekers have shown such courage and resilience. 
    3. Around 39% of workers retrenched in Q1 2020 had re-entered employment by June 2020. 
    4. Of these, 7 in 10 re-entered employment within a month of being retrenched, and 5 in 10 possessed transferrable skills that enabled them to switch to a different industry. 
    5. For jobseekers who are prepared to take the leap to change vocation or join a new sector, our career conversion programmes and company-hosted traineeships and attachments can help to make this switch easier.

     

  11. At the same time, we are also seeing businesses changing their mindsets. Instead of looking only for jobseekers who already have the experience and skills, businesses often find that when they widen their search, they find good candidates. 
    1. The government hasbeen working closely with such forward-thinking companies in the private sector. And in doing so, these companies have created new opportunities for Singaporeans while placing themselves in a good position for economic recovery.

     

  12. Mr Yip Hon Weng has highlighted that mature workers aged 40 and above are likely to face greater difficulties in making a career switch. We are aware of and recognise the challenges this group of jobseekers face. 
    1. I have already mentioned that the JGI will provide higher salary support for new mature local hires – double of that compared to non-mature hires. 
    2. Moreover, under the SkillsFuture Mid-Career Support Package introduced in the Unity Budget earlier this year, we have ramped up our career conversion programmes to more than 14,000 places this year.
      1. Now, this aims to support mid-career jobseekers in reskilling for new occupations in sectors with good long-term prospects.
      2. We have also boosted the salary support for all workers aged 40 and above who are enrolled in career conversion programmes, in particular for non-PMETs, from 70% to 90%.

     

  13. This year alone, our career conversion programmes have helped 6,100 mid-career jobseekers to acquire new skills and switch into new occupations. 
    1. These include close to 100 Professional Conversion Programmes covering across 30 sectors, and specialised career conversion programmes under the Tech Skills Accelerator (TeSA) for the ICT sector.

     

  14. For mid-career jobseekers who may not be able to secure a job straight away, the SGUnited Mid-Career Pathways Programme provides attachment opportunities hosted by companies. 
    1. These opportunities provide jobseekers with valuable industry-relevant experience and help them to build their skillsets and networks, while receiving an allowance. 
    2. The Government will co-fund 80% of the training allowances for trainees under these programmes, while the organisations fund the remaining 20%.

     

  15. The public sector has also introduced a Work and Skills Immersion Programme (WSIP) in capability areas such as ICT, food science and technology, social services, and healthcare sectors. 
    1. Open to fresh graduates and mid-career switchers, successful applicants are employed full-time, typically on a two-year basis, and will receive structured on-the-job training, preparing them to take up roles in the economy once we recover.

     

  16. Ms Cheryl Chan has also pointed out that our upskilling and reskilling strategies need to take into account certain vulnerable groups, such as special needs individuals. And we agree, fully.

     

  17. The Open Door Programme helps persons with disabilities enter suitable jobs and integrate them into the workplace by providing support for job placement, training and cost of job redesign. 
    1. The Open Door Programme training grant was recently enhanced in July, with more course fee subsidies of up to 95% and training allowance of $6/hr, as well as a new training commitment award of $100 per completed eligible training course. 
    2. The training courses are curated to ensure that they equip our PwDs with industry-relevant skills. 
    3. This includes courses in software and technical design skills, and courses that help persons with disabilities work in emerging sectors like logistics, or in jobs that may involve automation. 
    4. There are also customised Train and Place Programmes for specialised jobs. 
    5. Looking ahead, SG Enable is also working to expand courses in sectors with long-term growth opportunities such as healthcare, education, banking and finance, and computing.

     

    Foreign Workforce Policy

     

  18. On our foreign workpass policies, there was already an intense debate last month. So I will just summarise some of the points brought up my Members.

     

  19. The Government will continue to make adjustments to calibrate the flow, keeping in mind Mr Liang Eng Hwa’s reminder to not over-rely on foreign manpower. To that end, we update our Foreign Worker policies on a regular basis. 
    1. At the Work Permit and S Pass level, we cut the Services quota from 40% to 38% and the S Pass quota from 15% to 13% in 2020, and will reduce them further to 35% and 10% respectively in 2021 next year. 
    2. We will also cut S Pass quotas for the Construction, Process and Marine Shipyard sectors from 20% to 15% from 2021 to 2023.

     

  20. At the EP level, MOM has also tightened the framework recently.

     

  21. This is why we raised the salary hurdle – to nudge employers towards better quality. This also means that applicants who do not meet the higher hurdles must come under the S Pass framework, where there are quota controls. 
    1. We have extended the job advertising duration from 14 to 28 days. 
    2. When assessing EP and S Pass applications, we will place additional emphasis on efforts made by employers to build up and retain a strong Singaporean core.

     

  22. We also regularly take employers to ask for pre-selecting foreign candidates and disregarding qualified local candidates. 
    1. This year alone, 90 employers have had their work pass privileges suspended because of infringements under the FCF. 
    2. We will also be engaging an expanded group of employers to review their hiring practices, including firms whose Singaporean core has been weakening, or whose EP and S Pass workforce are overly concentrated from one single foreign nationality source.

     

    Uplifting lower-wage workers

     

  23. Members such as (NTUC) Deputy Secretary-General Koh Poh Koon have spoken passionately on supporting our lower-wage workers. We all share the same aspirations in this House, as various members have spoken earlier in clarifications on SMS Koh’s speech. 
    1. We do not want any Singaporean to be left behind. We want to uplift and care for our fellow workers as best as we can. 
    2. This Government and our tripartite partners stand in solidarity with our lower-wage workers.

     

  24. Our approach has worked. It has worked. We are progressively narrowing the gap between the incomes of our lower-wage workers, and those in the middle. 
    1. In the three sectors where the PWM has been implemented, real incomes have increased by around 30% in recent years, outstripping the 21% of real income growth at the median across all sectors. 
    2. As for the overall workforce (that means, both those with PWM and those without PWM collectively), real incomes of our full-time employed resident workers at the 20th percentile have also increased cumulatively more than the median. 
    3. The incomes of our 10th percentile full-time resident workers today, currently stands at $1,517 per month.
      1. Now one decade ago, the incomes of this percentile of workers was at $1,000.
      2. So this amounts to a 50% increase over the last decade. So there has certainly been progress if you look at our measures and how the whole ecosystem works.
    4. More importantly, we have done so, while keeping unemployment low for years, up till COVID-19 broke out earlier this year.

       

  25. This risk of disemployment is a key factor that the Government is very sensitive to. And with regards to literature, the fact is that the jury is still out there — economists have not conclusively found that minimum wage will not create disemployment. So in fact, I’m told it’s a hotly contested area, and economists continue to debate this issue. 
    1. Recent studies have found that the range of estimates for the disemployment impact of a minimum wage is wide. Moreover, studies have shown that the disemployment effects could be stronger for certain groups of workers. 
      1. For example, Harasztosi and Lindner found that the disemployment effects due to increases in minimum wages in Hungary were considerably larger in the tradable and exporting sectors than in the non-tradable or service sector1.  
      2. Others, such as economists Meer and West, have shown in their research on the United States, that minimum wage may not cause immediate disemployment effects but still impact job growth2
  26. So some studies, that look at disemployment from the ‘averages’ perspective. But I think it’s important to see that the preponderance of evidence shows that low-skilled workers are actually most at risk of job loss. So we need to deal with the specifics, look at the profile of our workers in Singapore, and how this will affect them. We are not ideologically against minimum wage, PWM, or what have you. But what we want is the best of each system that will benefit us, fit Singapore and uplift our lower-wage workers. But at the same time, we avoid the downsides and the trade-offs. That is very important for us, and that is why we take a serious view on disemployment.

     

  27. Our concept of solidarity with our lower-wage workers also goes beyond wages. We have taken a careful and practical approach to implement a holistic suite of measures: 
    1. Workfare that tops up the incomes of lower-wage workers by up to 30% and provides targeted training support that support better employment outcomes, I think it is important that we support them beyond their wages. 
    2. We also have Special Employment Credit to offset their wages and improve their employability. 
    3. Silver Support is also provided to support retirement adequacy, and we provide a slew of measures to support their incomes
    4. It is also important to inculcate care and respect for our lower-wage workers, and our measures go beyond wages. With Workcare, we will improve lower-wage workers’ working environments in appreciation for their work, such as through the provision of proper rest areas for outsourced workers.

     

  28. I think the question would be this: can we be a nation with a strong social compact but without minimum wage? 
    1. When we think of countries with high standards of living, strong social policies, and with good and advanced economies like us, we often think of Scandinavian countries like Norway, Denmark, and Sweden.
    2. Like Singapore, these countries do not have a single minimum wage, and yet still have vibrant, cohesive societies. In place of a single minimum wage, these countries have robust dialogues between stakeholders, resulting in collective agreements on wages at the sectoral level. 
    1. This is akin to our sectoral tripartite approach in our existing PWMs and future tripartite efforts.

     

  29. So the Tripartite Workgroup on Lower-Wage Workers will be studying this important issue with this in mind. They will work to refresh the consensus on what works best for our lower-wage workers, and to ensure that more lower-wage workers can benefit.

     

    Other Suggestions

     

  30. Mr Ang Wei Neng and Mr Dennis Tan have asked about the criteria for SIRS. In the first 2 tranches of SIRS, we have disbursed over $1.1 billion.

     

    1. With the third and final tranche, SIRS is expected to cost $2 billion in total, almost double the original $1.2 billion set aside – this is a significant expansion of an already sizeable programme. 
    2. Altogether, about 195,000 individuals have received support under SIRS.

     

  31. We have already been exercising flexibility in the qualifying criteria to support more self-employed persons, or SEPs.
    1. About two in three unique applications have been approved. 
    2. For the remaining one third, applicants may have been earning much higher incomes, they could have resided in high value properties, or own two or more properties with their spouses.

     

  32. As SIRS was intended to support SEPs, employees who lost their jobs or experienced income loss were redirected to the COVID-19 Support Grant. 
    1. Where there were other areas of need, we have referred unsuccessful applicants to the appropriate agencies for follow-up assistance. 
    2. On the suggestion by Mr Saktiandi Supaat to allow citizens in need to tap on their CPF balances early, as announced by DPM Heng in August, the Government is studying appropriate ways to provide support to working Singaporeans, including SEPs, in the event of prolonged loss of income, beyond existing schemes.

    Conclusion

     

  33. Mr Speaker, In this debate, Members have raised a broad range of suggestions to address the needs of almost every worker segment. 
    1. We take these ideas seriously and will study them closely. 
    2. Rest assured, the Ministry of Manpower will continue to make every effort to ensure that Singapore and Singaporeans are not just able to tide over the immediate challenge ahead of us, but are also set in good stead for the future beyond that.

     

  34. Thank you, Mr Speaker.

 

 

FOOTNOTE

  1. Harasztosi, Peter, and Attila, Lindner. 2019. “Who Pays for the Minimum Wage.” American Economic Review 109(8), 2693 - 2727.
  2. Meer, Jonathan, and West, Jeremy. 2016. “Effects of the Minimum Wage on Employment Dynamics.” Journal of Human Resources 51(2), 500-522