Debated in Parliament on 2 Mar 2021.
Head S, Ministry of Manpower, Mr Desmond Choo.
Chairman, I beg to move, "That the total sum to be allocated for Head S of the Estimates be reduced by $100".
Since the start of the pandemic, the MOM has been charged with protecting the workforce from escalating unemployment and the threat of COVID as workers returned to work.
The results are clear. One hundred and fifty-five thousand jobs were saved or created. Nearly 2% shaved off the potential increase in unemployment rate.
To further judge the Ministry’s progress, it is perhaps instructive to examine much of our post-recovery Budget debate thus far. We had the chance to look at many longer term plans. But this would not likely have happened if our unemployment rates have tanked and not recovered. This stands in stark contrast to many overseas countries which are still deeply mired in COVID-19 cases and in the deepest of recession. Hong Kong's unemployment is at 7%, the US at 6.3% while Singapore is around 3%.
I would like to thank our MOM officers who sacrificed and work day and night to stabilise the threat of COVID-19 in dormitories so that work could proceed safely and services could resume and they also kept our workers employed and the workplaces safe. So many thanks to Minister Josephine Teo and her team of MOM officers. Thank you very much. [Applause.]
Even so, we know that we are not out of the woods and recovery is far from certain. We are always a big cluster or two away from falling off the recessionary cliff. In fact, the aviation, aerospace, hospitality and retail sectors still have years before they can recover. How would the Ministry support workers from these hard-hit sectors, especially if the Jobs Support Scheme is slated to end in September this year?
Much time, and rightly so, were spent debating supporting our lower wage workers in the Budget debate. A key trend in many other countries has been the disproportionate number of lower income workers losing their jobs. How many low-wage workers did we manage to protect during this COVID-19 crisis? If these jobs are lost, then uplifting lower wage workers will only be doubly difficult.
That we are able to moderate unemployment rates and maintain industrial peace even during very difficult times is not a matter of good fortune. The secret weapon we have is our special model of tripartism. Workers and companies are united with the Government to implement difficult cost-cutting measures. This has allowed us to manage costs and save jobs.
I remembered representing the unions in the many prolonged and tense National Wage Council discussions last year. While understandably tense and sometimes heated, we were united in trust. That we would do our best to ensure the Singapore economy will survive and as many workers as possible remain in their jobs.
I hope that while we look at refining manpower policies, we do not forget tripartism, Singapore's bulwark against debilitating economic forces. It has worked during every one of our crises. It has worked during the deepest of the COVID pandemic. We need to continue to safeguard and invest in it.
COVID-19 has surfaced the highly disruptive forces of digitalisation and remote working. These are causing structural employment issues. It goes just beyond workers in Singapore being dislocated but also losing jobs permanently because of the ease of working online.
Our decades-long investment in our training and placement system has allowed us to re-deploy workers quickly. In the Labour Movement, we know the difficulty of retraining and finding worker another job. According to a New York Times article on 27 February 2021, unemployment is traumatic, affecting mental and physical health, and also erodes skillsets. We see that with our very own retrenched workers. A robust placement system is critical not only during this crisis but also to tackle structural dislocations. How would the Ministry continue to evolve our job placement system to deal with structural changes, especially for our PMEs?
The structural forces also beg the question on how shall we evolve our foreign manpower system so that it serves both current and future needs? It has served companies well over the years as they could expand beyond our small local workforce size would allow.
The question going ahead is how to help businesses to operate effectively while at the same time, allowing for the Singaporean Core to grow. These challenges can be difficult to balance. It can be difficult to tighten manpower quota without causing disruption to many companies.
Industries are more complex now and so are their needs for manpower and talent. Many companies are involved in multiple industries and do not neatly fall into the five major sectors in the current system. Companies also need multi-skilled workers doing multiple roles. While we have critical shortages of local workers in some industries, our local workforce might have supply in many other places. And this can happen within the same sector amongst different job roles. This is not surprising considering how our educational and workforce profiles have changed rapidly over recent years. How can the Ministry balance such needs going forward?
COVID-19 has also brought to the spotlight an important part of our workforce – which is the Self-Employed Persons (SEPs). SIRS was instrumental in helping our SEPs tide through a very difficult period. I had shared during the Budget debate on the need to level the playing field between the SEPs and the big platform companies and organisations.
I would like to ask what are the Ministry's plans to strengthen retirement adequacy. This is a tricky trade-off to manage between their take-home income and preparing for the future. How would the Ministry also involve the companies to provide for these SEPs?
Furthermore, many SEPs are not given training and are likely to be stagnant and lose productivity over time. How can we continue to develop and provide training for SEPs so that we can grow this segment of the workforce?
Next, I would like to touch on our foreign domestic workers (FDWs) and how we can care for them. Over the last few weeks, we have heard unfortunate stories of FDWs being abused. NTUC's Centre for Domestic Workers or CDE was set up to help our FDWs. It has disbursed nearly $200,000 to 1,630 of them between 2016 and 2020. It has sheltered and supported more than 1,500 of them. It has a network of 1,000 volunteers and ambassadors who engage with them to identify those who require assistance, educate them about their rights, and about resources.
What are the Ministry's future plans to further care for FDWs to prevent unfortunate abuse cases from happening again? How can organisations such as CDE complement the Ministry’s work? I hope that employment agencies can play greater roles in safeguarding the welfare of our FDWs even after a successful placement.
Sir, in conclusion, as much as our MOM officers have worked extremely hard, I am afraid even more hard work awaits them. Singapore needs MOM to keep its eye focused on implementing our workplace safe management measures right, to implement our employment and workplace safety policies right so that our workers will continue jobs and work safely until Singapore has successfully tackled the COVID-19 pandemic. Sir, I beg to move.
*Question proposed.*
Mr Patrick Tay.
Sir, with your permission, I will take both cuts.
First cut on underemployment. I recently filed a Parliamentary Question and MOM replied that there are at present about 36,000 Professionals, Managers and Executives, or PMEs, earning less than $3,000 per month.
[Deputy Speaker (Mr Christopher de Souza) in the Chair]
If you lower it to $2,600, there are still about 20,000 earning less than $2,600 per month. This figure is worrying as these are supposed to be workers in executive and managerial positions. There is, therefore, a need to examine closer to see if these are actually disguised PMEs, that is, given inflated titles but the job is not, effectively, a PME job.
By the same token, we may have to embark on the Progressive Wage Model for such PMEs to help them in their skill, wage and career progression. Similarly, we may need to, again, review the salary limit of $2,600 in Part IV of the Employment Act, and for MOM to closely monitor non time-based underemployment in Singapore despite its subjectivity.
Second cut, review of the Industrial Relations Act. The Industrial Relations Act was amended in 2015 to permit rank-and-file unions to collectively represent executive employees. To avoid conflicts of interest and undermining management effectiveness, executives with senior management functions were excluded from collective representation. These functions are set out in section 17(3) of the Industrial Relations Act.
In the years that have followed, unions which have sought to extend their scope of representation to include executives have met with some difficulties because the exclusions set out in section 17(3) are too broadly worded, thereby giving employers the opportunity to claim that even low- and mid-level executive employees fall within them, whereas the intent behind the law was only to exclude those who are at senior management levels and carrying out functions which genuinely give rise to a conflict of interest if they are represented by a union.
Besides this, there are several other procedural and technical areas which are ambiguous or need greater clarity. I would like to suggest that a tripartite work group be formed to look at reviewing the Industrial Relations Act and addressing these concerns.
Sir, in reply to my Parliamentary Question last week on the employment market situation, Manpower Minister shared that the overall employment in 2020 declined by 172,000, reflecting the significant impact of COVID-19 on the labour market.
However, it is noteworthy that this sharp reduction in employment is mostly borne by foreign workers. In fact, non-resident employment fell sharply in 2020; contracted by 181,500 or 16% year-on-year decrease. This is more than the drop in total employment.
On the other hand, resident employment, mostly locals, actually grew; albeit just a modest increase of 9,300, as the various Government support measures helped push local hiring.
In a way, having a foreign workforce served as a buffer and helped cushion our resident workers during an economic downturn. In better times, the foreign workforce helps businesses grow so that companies can find the workers to do the jobs that Singaporeans would not want to do. But in a downturn, non-resident employment tends to bear the brunt as companies release their foreign workers and/or the foreign manpower restrictions start to tighten.
This has been a similar experience in previous economic downturns, such as during the Global Financial Crisis. As a result, it has kept our unemployment rate low, even during recessionary years.
The various schemes under the Jobs Growth Incentive, or JGI, have helped to stave off massive local unemployment and also created new job openings and placements. A novel scheme that I particularly like is the SGUnited Jobs and Skills Package, which was intended to tackle the anticipated fallout from the pandemic. With the support from the tripartite partners, 76,000 Singaporeans have been placed into various jobs and skills opportunities under the scheme.
In Budget 2021, Deputy Prime Minister Heng listed three key enablers for our economy to emerge stronger, one of which is to develop our people and enabling Singaporeans to have good jobs and job opportunities.
He also referred to SGUnited Jobs and Skills Package as a key pillar to enable Singaporeans to learn and thrive and to seize opportunities in the new growth areas. The Government will commit another $5.2 billion to fund this effort.
With the package now expanded to support emerging stronger initiatives,
Under the earlier phase of the JGI, 100,000 local jobseekers and 76,000 traineeships were placed. Some of these are short-term in nature. How can JGI and MOM agencies help these Singaporeans transit and access new opportunities, as envisaged in the Emerging Stronger Together plans?
Chairman, currently, WSG offers a Professional Conversion Programme, or PCP, that seeks to enable mid-career PMETs to undergo skills conversion into new occupations or sectors; as well as SkillsFuture credits for all Singaporeans to prepare themselves for potential career transitions. SkillsFuture and the PCP received a further boost under the Jobs Growth Incentive announced in August 2020 where the Government committed to co-pay a quarter – half for those aged over 40 – of the salaries.
In a world where changing technology, continued globalisation and environmental considerations mean that job displacement and structural unemployment are liable to become more pervasive, co-funded PCPs of this nature will take on an increasing importance in helping our economy evolve into the competitive landscape of the future.
Yet, while we have some anecdotal evidence of the programmes' benefits – a resident employer I know shares, for example, of a number of successful placements. We have less systematic evidence that there is proactive re-employment of recentlydisplaced workers. Currently, the JGI is applicable for up to one year for hires commencing in September 2020 onwards.
This sort of certainty for both employer and employee is critical. From the employer's perspective, it is effectively co-insurance for a risky hire since the potential employee's ability to adapt and perform in a new role is largely unknown.
From the employee's perspective, it is insurance of a different kind. The promise of a job, even if it is only guaranteed for a year, is a solid incentive to be willing to undergo uncertain and often painful re-training.
Given the inherent complementarities between the PCP and JGI, I wonder whether co-funding support can be made more permanent. I would even go as far as to venture that the PCP be had not just with co-funding but to suggest that the programme become a natural extension of a more holistic unemployment insurance programme, which commences from the point of redundancy.
The Workers' Party had previously suggested the contours of such a redundancy insurance system, which I will not repeat here. However, I am making the case to further incorporate unemployment insurance, given how it is a natural complement to the PCP and JGI programme.
Such an extended programme is not unprecedented elsewhere. Sweden's Job Security Councils, for instance, receive not just standard unemployment benefits, but also financial compensation to assist in the job transition. The system seeks to provide security for a job, just not necessarily the job that you are originally trained for. Denmark's Flexisecurity encourages low-cost, flexible hiring and firing, but displaced workers receive unemployment support alongside re-training and re-education programmes. And Germany recently re-fashioned its National Unemployment Agency to become more of a job matching entity that issues not only career advice but also vouchers to finance re-training costs.
The underlying principle behind these efforts is clear. There is a natural end-to-end complementarity between unemployment insurance on one hand, and retraining and reintegration into the workforce on another. Of course, they are perennial concerns that have to do with cost, but redundancy insurance can be made a self-financing system heavily supported by workers' own contributions and, perhaps, by some Government top-up with a recurring revenue.
Singapore already has most of the elements of an end-to-end job safety net in place, including the functional equivalent of unemployment insurance, which was widely deployed over the course of the COVID-19 crisis via a number of relief schemes and support grants. All that is lacking is a willingness to institutionalise this approach and ensure that the system is cohesive so that Singaporeans unfortunate enough to be displaced from the jobs that they are previously prepared for, also receive the support and guidance they need in a tough labour market.
Mr Yip Hon Weng, if you would like to take your two cuts together.
Chairman, I will take my two cuts together. Recent statistics indicate that fewer graduates have found permanent full-time jobs in 2020. There was also a spike in part-time employment during the COVID-19. This is to be expected, given the economic situation, and it is encouraging that graduates are able to find some form of employment to stay productive and earn an income.
However, long-term underemployment would make it challenging for them to move on to better prospects, even when the economy improves. This is especially so if the part-time work they have taken on does not develop skills that are transferrable.
Graduates from the lower income families and those who take loans to finance their studies are harder hit. They may have to settle for any source of income that comes their way. This includes informal jobs, like ride-hailing and food delivery. This is unlike some of their peers who may have the privilege to be more particular with choosing their first job and spending their free time taking up courses to hone their skills.
Are there plans to expand the programme and create more vacancies across a wider variety of sectors and job roles? Is the Ministry reaching out to graduates who are working part-time jobs, especially in the informal sectors, to see how to provide targeted help to them? I notice that the focus of media reports seems to be on helping graduates from the local public Universities. What about graduates from the Polytechnics, ITEs and private Universities? What is their employment situation and how are they benefiting from the traineeships?
Next, on senior employability. Seniors are very important to our workforce. Mature workers have plenty to offer. They have knowledge, skills and experience accumulated from decades of practical experience in the workforce. Thanks to the Government's push for education and literacy in the earlier years, many mature workers are well-educated and possess the necessary prerequisites and qualifications to take up or transit to jobs that their younger peers qualify for. But with the labour market still tight, the challenge of landing a full-time job has been heightened. This is particularly so for the older workers, who are disadvantaged by unfair stereotypes that employers have of them.
There are various grants to support employers to re-design their workplace practices, processes and jobs for senior workers. Tripartite partners have also worked with Institutes of Higher Learning to develop a training programme specific to the management of older workers in Singapore. And Workforce Singapore, or WSG, introduced customised support for sectors with a higher concentration of older workers.
Some seniors prefer to work fewer hours because of health reasons, or to pursue other personal interests. They built up their retirement funds and they do not need a full pay-check. And there are also other individuals who could benefit from reduced work hours, such as care-givers and those who desire more time for other obligations. They could benefit from job-sharing. In this way, we can retain more talent, including mature workers, in the workforce.
Will the Ministry look into expanding the Job Sharing Initiative? Thank you.
Mr Chairman, Sir, as an ageing society, the Government has cast an aspiring vision for Singaporeans to age with purpose and grace. For most Singaporeans, this will, hopefully, be in the form of a good retirement with sufficient savings and restful time to enjoy the company of grandchildren and catching up on hobbies.
However, this is not necessarily the case for some segments of our lower skilled elderly who may need to continue to hold on to employment in order to sustain independent living. I believe that providing dignified employment for elderly who are able and need to continue working will be a growing challenge in our ageing society with high cost of living.
I am concerned that a segment of our elderly may be left behind because of our fast transforming economy, especially with the rapid digitalisation of work processes by employers to increase productivity.
I have a 70-year-old resident who came to seek employment assistance. The resident was an experienced former security officer who was asked to retire even though she desired to continue working. As her children were not doing well financially, she did not want to be a burden to them. She wanted an administrative or customer service role which she felt she would be adequately able to carry out. Nonetheless, she said that no employers would consider her, given her age. Throughout my conversation with her, I could feel her dejected emotions because of the multiple rejections that she has been receiving. Despite her goals to be independent and self-sufficient at her age, it did seem that she might have to end up seeking some form of financial assistance in the interim while continuing her uphill job search journey.
I know that the 2021 Budget has an increase in Senior Worker Early Adopter Grant and Part-Time Re-employment Grant. But both are applied directly to employers. Also, the SGUnited Skills Programme caters mainly for mid-career jobseekers impacted by the COVID-19 pandemic and the SGUnited Traineeship targets mainly fresh graduates from the Institutes of Higher Learning. My concern is how elderly like the resident I mentioned, will be able to navigate skills training, job matching and job support amidst these schemes.
I would like to ask what more can the Government do to partner employer with the enhanced grants to widen the job range for this segment of vulnerable elderly and how can community agencies be roped in to partner employers in facilitating job matching for those who want to keep dignified employment.
Chairman, CPF has been able to maintain its interest rates at 2.5% for Ordinary Accounts and 4% for Special MediSave and Retirement Accounts. The interest helps our CPF members to grow closer to their time and goals, which is to meet or exceed the minimum retirement sum. Now, even though 2.5% or 4% compounded over a long period of time can lead to significant interest income. I would like to ask if there can be a choice for CPF members, especially with a long-term time horizon.
For example, the 20- to 30-year-olds today with 30 or 40 more active working years to devote a portion of their CPF to earn higher returns. For example, MINDEF already has a Saver Premium Fund where investors have an option to choose between dynamic balance and stable according to the investment needs. Is there a possibility for CPF members to have similar options where they can opt a portion of their CPF savings for a dynamic portfolio, such as to co-invest with the Government's investment vehicles to enjoy the higher returns.
Up to 50% of the net returns from the reserve do flow back through the NIRC framework. Could there be a more direct means by which members will be able to earn high investment returns through co-investing in the Government's investment vehicles, especially given the long time horizon for CPF monies held for our members' retirement.
There is already a CPF Investment Scheme in place with a list of specified investment products included under the CPFIS. Should we look further when you really have the highest quality fund managers in the Government's investment vehicles and does it not make sense to allow Singaporeans to directly benefit from the Government's prudent and astute investment capabilities?
Chairman, this pandemic has seen many workers either had to take pay cuts or even lose their jobs, including the executives and management. For the fortunate ones, they were able to move from one job to a similar, if not better job, in a shorter time compared to others. This was made easier with the collective efforts of various agencies including NTUC's Job Security Council to help secure jobs for our fellow Singaporeans.
For some, who are unable to find employment opportunities, they had to take on alternative temporary jobs to tide them over such as driving private hire vehicles or working as food delivery persons. As such I would like to inquire the Ministry on the programmes such as Professional Conversion Programme (PCP) and Capability Transfer Programme have been effective in mitigating the employment challenges faced by Singaporeans during this pandemic?
How many of those who went through such programs have resulted in taking on higher value added jobs or new job areas?
In addition, how can such programmes be effectively marketed for better outreach so that we can entice self-employed workers such as private hire drivers or those working in a gig economy to join the permanent workforce for better job security?
What is the Ministry projection for such programmes and how we can create interest and encourage more local workforce to seize such opportunities at the earliest possible time?
Mr Chairman, the PMET jobs which we used to do from the comfort of our offices and now in our homes, are at risk of being outsourced. Even before this, companies around the world are delegating small-scale projects to cheaper labour in developing countries, such as design, coding and customer services. Amidst the pandemic, technology has made it more easy to do remote work. On the other hand, Singaporean talents would also have more opportunities to work remotely for foreign markets. How will the Ministry help Singaporeans to leverage on these opportunities? How will the Ministry minimise the outflow of jobs as a result of remote work?
Certain essential services usually carried out by foreign workers had to be suspended or reduced in frequency during the circuit breaker period. It is therefore prudent to push for skills development amongst the blue-collar sectors in Singapore. Some of these jobs in construction, landscaping and cleaning are considered skilled labour in other developed economies like Japan and Norway. It is heartening to observe that some young Singaporeans are embracing opportunities in the cleaning and waste management sectors. But such industries are still plagued with stigma and looked upon unfavourably.
How do we transform these sectors, along with mindsets, to ensure we always have a reliable pool of local talents to count on for these essential services?
A feature of the COVID-19 economic health shock is that it is uneven across sectors. While firms in a contact-intensive sectors suffers a contraction in output and will lay off workers in the absence of policy measures like the Job Support Scheme (JSS), some other firms such as those offering products via an electronic platform do well.
The issue to be raised here concerns the nature of help that might be offered to facilitate reallocation of workers out of the contact-intensive sector such as aviation/aerospace and tourism related activity into other sectors should restrictions on international travel make it unlikely for normal business to resume soon. More broadly, how do we prepare workers to minimise the scarring effects of a prolonged slump? It is useful to think about three groups of workers. Those currently employed in the contact-intensive sector, those employed in the rest of the economy and new graduates who are entering the workforce.
First, workers who are currently employed in the contact-intensive sector. The JSS keeps these workers on the firms' payroll because the ultimate recovery of the affected sector avoids the need to incur investment costs to retrain a new group of workers with the necessary industry specific skills. Workers in the aviation/aerospace industry will no doubt use the lull period to undergo training to deepen their skills. Perhaps new developments in artificial intelligence and the technology embodied in Industry 4.0 can be mastered to position the industry to ride the wave of opportunities when more normal international travel resumes.
Firms employing workers in the tourism related industry working in tandem with their trade association and chambers can potentially take advantage of a home market effect to cater to demand from residents who are unable to travel overseas for their family holidays due to the pandemic. They can also encourage their workers to build upon common digital platforms to reach overseas customers.
Second, workers were employed in the rest of the economy. The JSS provides support to achieve the stabilisation function of the Government, avoiding a cyclical rise in unemployment, while the Jobs Growth Incentive, the JGI package, seeks to create new hires in the potential growth sectors through a hiring subsidy. The JGI is a very important policy measure as it helps to create a good supply of new job vacancies in growing sectors of the economy. In the aftermath of the Global Financial Crisis (GFC), it has been observed that even though the measured rate of unemployment in the advanced economies decline, the employment to working-age population ratio had actually fallen below pre-GFC levels. So the unemployment rate was low, but the employment to working age population was actually low as well. What is the explanation?
That is because even after several years subsequent to the Global Financial Crisis, there was an inadequate supply of good jobs offering good pay so that discouraged workers withdrew from the labour force. Pursuing structural transformation as a major pillar of Budget 2021, even while help is extended to save jobs in the contact-intensive sector has a virtue of enabling the Singapore economy to create a good supply of new job vacancies when the economy returns to its potential trend growth path.
Third, new graduates entering the workforce during COVID-19. Holding a job confers benefits that go beyond the pay. It provides also non-monetary rewards, non-pecuniary benefits of a job. In contrast, being unemployed produces not only personal costs, but also has important social costs. Family members are also badly affected when a breadwinner loses a job.
The JGI could go some way towards encouraging firms in the growing sectors to hire recent graduates. The SGUnited Traineeship programme is also valuable in helping to link graduates from the Institutes of Higher Learning to potential employers. During a buoyant market, a graduate holding an undergraduate degree might defer post graduate training. Let me declare here that I am an academic at one of the Autonomous Universities. In the current labour market conditions, the opportunity cost of doing a full-time postgraduate degree is lower, lower than during the pre-pandemic era. The Government might consider sharing in the cost of postgraduate education with firms in the potential growth sectors who might be willing to make contractual arrangements to partially fund the workers to acquire advanced skills. After obtaining the postgraduate degree, the worker is then employed by the sponsoring firm.
To sum up, the COVID-19 shock might turn out to be prolonged in this climate. It is vital to minimise the scarring effect on a resident Workforce.
Deputy leader, would you like to move a Motion for exempted business for the Committee of Supply?
Sir, may I seek your consent to move that the Chairman do leave the Chair? This is to enable me to move a Motion to take the proceedings on the business of Supply today beyond 7.30 pm.
I give my consent.
Resolved, That the Chairman do leave the Chair. – [Mr Zaqy Mohamad].
Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.
PAPERCUTS