The growth in the local labour force is slowing, due to factors such as ageing, lower fertility, and an existing high labour force participation rate and low unemployment rate, said Manpower Minister Lim Swee Say in Parliament on Monday (Oct 10).
He explained why, even with the numbers of exits and entries in the local workforce fluctuating from year to year, overall, there will be a "continued slowdown of local labour force growth, towards negligible levels, or even stagnation in the next decade".
"For those aged 25 to 64, our labour force participation rate of 83.1 per cent is high and showing signs of plateauing. For the younger ones aged 15 to 24, the size of the cohort entering the labour force had already peaked in 2013 and started to decline since then," said Mr Lim.
"More importantly, the number of people retiring is also on the rise, doubling over the last two years. This will continue as more baby boomers enter retirement." According to the Manpower Minister, there are three major implications of these developments.
SINGAPORE "CAN NEVER SLOW DOWN IN EFFORTS TO CREATE JOBS"
First, even as the local workforce growth slows, Mr Lim said Singapore cannot afford to go slower in its efforts to create jobs.
One reason for this, he said, is that many jobseekers are not looking for the same jobs which have been vacated by those who have left employment. These jobseekers have better education and skills profiles, and want better jobs to meet their higher expectations and aspirations, he said.
"This is also why we can never slow down," said Mr Lim. "To move faster, we have mobilised industry leaders, unions and economic agencies to create and re-create many more quality jobs in more than 20 major sectors. We have to make sure that the innovative growth of our economy will also be an inclusive growth for all our people."
Mr Lim added that Singapore has to ensure that short-term pain it is currently undergoing - brought on by a slowing global economy and domestic restructuring - must be transitional, and not a new normal.
"We must make sure that the current low growth of 1 to 2 per cent is only transitional. Our future norm should be 2 to 3 per cent of quality growth, not 1 to 2 per cent of low growth," he said.
"This is because our ultimate objective in pursuing growth is not growth itself, but to create jobs in sufficient quantity, and of good enough quality for our people to have better jobs, wages and careers."
FOREIGN MANPOWER POLICY MUST BE "WELL-BALANCED"
Second, Mr Lim said that Singapore has to balance between the extreme of taking in too many foreign workers to make up for the drop in local labour growth, and the extreme of reducing the growth of foreign manpower to zero.
In the former scenario, Singapore "will become overly reliant on foreign manpower, and wages will also stagnate without sustained productivity growth", while the latter scenario will cause the economy to eventually stagnate, he said.
"This is why we are transforming industries for higher productivity gains, and are adopting a balanced approach in managing the inflow of foreign manpower," added Mr Lim.
"This balanced approach will enable our combined workforce of locals and foreigners to complement each other better and compete aggressively for good investments globally, such as the opening of Micron's expanded facility here last month."
He also noted that the annual increase in foreign manpower has dropped by more than two-thirds from the last peak of 80,000 in 2011 to about 24,000 in the past two years.
MINIMISING JOB-SKILL MISMATCHES
Referring to questions raised by Members of Parliament, Mr Lim said that he shares their concern that Singapore could see a higher number of layoffs than before, especially in sectors facing weak demand.
"We must stand by our people and do more together to support them in this period of economic transition - training support, wage support, job search and career conversion," he said, adding that the Government has stepped up job matching and career services with the introduction of the Adapt and Grow initiative.
In first eight months of 2016, Mr Lim said Workforce Singapore and e2i has assisted 20,000 active jobseekers, with more than 13,000 finding jobs. According to Mr Lim, this number of successful job placements were much more than the same period last year.
"The number of PMETs who managed to secure jobs with our employment support went up by 45 per cent. For the rank-and-file workers, (this) went up by 12 per cent," he said.
Mr Lim also acknowledged that there is a "higher share" of PMETs among residents made redundant. He told Parliament that of the 5,700 locals retrenched in the first half of this year, about 70 per cent, or 4,000 of them were PMETs.
Therefore, the Manpower Ministry extended the Career Support Programme in May this year to two additional groups of PMETs: All PMETs made redundant who are aged 40 and above, even if they have been unemployed for less than six months; and all PMETs made redundant and unable to find jobs after six months, even if they are below 40.
In conclusion, Mr Lim said that jobs provide "the best welfare", and full employment is the best protection for Singaporean workers.
"As we enter the next stage towards 2 to 3 per cent of quality growth, I assure our fellow Singaporeans that the tripartite partners are doing our best for them, at the national level, and the sectoral level. We need our businesses to do their part, to transform and grow. And we need our people to do their part too, to adapt and grow," he added.
"Last time round. during the global financial crisis, we cut costs together, we saved jobs together, and upturned the downturn together. This time round, our challenge is: Transform together, adapt together, and grow together. Working together, we can succeed once again."
Source: Government of Singapore