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Singaporeans must adapt and seize opportunities created: PM Lee


Excerpted From


Responding To Challenges
.....In my May Day Message, I mentioned three long term challenges
 a. Staying head in a New Asia
 b. Managing an ageing population
 c. Tackling structural unemployment
Today, I will like to outline our strategies to deal with these challenges
Restructure to Grow the Economy and Create Jobs
China, India, and our Southeast Asian neighbours will continue to grow and compete with us.
 a. We cannot stand still; we have to restructure, upgrade, and adapt to the new landscape
This strategy is working
 a. e.g. PSA has successfully restructured and is doing well. It overtook Hong Kong as number one port in the world in first quarter of 2005
 b. CAAS and SIA too are making good progress
 c. Many investments coming in for both manufacturing and services. The IRs will be another big plus for our economy
 d. As a result

i.  Unemployment has fallen below 4%

ii.  Retrenchment in 2004 was 10,000, the lowest since the Asian Financial Crisis

iii. Overall, we have net creation of 71,000 jobs in 2004, of which 70% went to locals

Hence in May Day message I said that overall the outlook is positive
 a. Straits Times headline: “Don't worry, the outlook is good, says PM Lee”
 b. But we must always worry!
 c. Better headline would have been: “Outlook good, but be careful and work hard, says PM Lee”
I know that workers are still worried about job security
 a. They know how strong the competition is
 b. They see that despite growth, there will continue to be retrenchments – e.g. Maxtor
It is tough to go through retrenchment, and have to re-skill and get re-employed. But it is unavoidable. To grow our economy and create more jobs, we have to become leaner, more efficient and competitive, i.e. we have to allow restructuring to take place.
This means turnover and sometimes retrenchment. If we try to delay the restructuring in order to protect existing jobs, the result will be worse.....
Helping the Troubled Segments
Restructuring has to continue. It is better for us to endure some short term pain, so that in the long term, we stay competitive, and can continue to create more jobs.
But we must pay special attention to workers who have the biggest problem adjusting. There are three groups
Older workers
 a. More difficult to adapt to changes in economy
 b. More concerned about old age expenses, and medical expenses, especially given that Singaporeans are living longer
 c. Best solution is for Singaporeans to work longer, and retire later.
 d. Then they can continue to support their families, and save more for their old age
 e. But this is not easy to do. We have to tackle the problem on many fronts

i. Make sure that our labour market is flexible

 (1) Particularly, seniority wage system is not sustainable and has to be changed

 (2) For many workers, prime of career is in the 40’s or early 50’s. Therefore, wages and benefits systems will need to be adjusted so that it is still attractive to hire older workers.

ii. Employers have to restructure or redesign operations to prepare themselves for more older workers

 (1) Reallocate responsibilities so that older workers can do something less physically demanding, and which they are good at. For example, older workers are more reliable, more punctual, more patient, and friendlier. Companies should make full use of this

iii. We also need to change the negative mindsets against older workers

 (1) Workers to continue to believe in themselves, that they can learn and pick up new skills

 (2) Customers be more understanding, and do not always expect everything to done in the quickest time

 (3) Employers to keep their doors open to older workers – do not reject a job applicant just because he is above 40

 f. The current situation will become increasingly untenable. Older workers still have much to contribute. We need to get companies to be more ready to employ older workers without undermining their commercial viability
 g. A Tripartite Committee is currently studying these issues in depth, and will submit its recommendations to the Government in the coming months.
Lower-skilled workers
 a. Face considerable difficulties. They cannot keep up with the rapid changes, and risk being left behind as the economy progresses.
 b. Continue to emphasise life long learning, training and upgrading, to provide Singaporeans with new and relevant skills.

i. Fit them into industries which still require workers, e.g.

 (1) In services – healthcare, education, security, public transport, childcare, retail and hotels

 (2) In manufacturing – shipbuilding, construction, electronics and textiles.

ii. But they must make an effort to adjust and not shun these jobs, which will otherwise go to foreigners

iii. Mindset is changing

 (1) Singaporeans used to shun jobs such as healthcare assistants in hospitals. Now they queue up for the jobs, and retention rate is high

 (2) Singaporeans used to shy about becoming waiters. They asked ‘What if I have to serve a relative or a friend that comes into the restaurant?’ But they are gradually accepting the idea.

 c. At the same time, will ‘recreate’ some existing jobs to make them more suitable and attractive for local workers

i. In sectors such as cleaning, construction, landscaping, electronics, precision engineering and shipbuilding, factors such as low pay and challenging working environment may have deterred Singaporeans from taking up these jobs.

ii. We can redesign these jobs, raise productivity, increase pay, and make working conditions more pleasant

iii. Targeting for 10,000 vulnerable workers to take up meaningful employment over the next 12 to 18 months through the Job Recreation Programme

 d. Mr Lim Swee Say is personally overseeing this
PMETs (Professionals, Managers, Executives, Technicians)
 a. Because of outsourcing and company restructuring, organisation structures are flattening
 b. Many middle level jobs which they used to do no longer exist
 c. They are not qualified to get the new jobs that remain at the top, and do not want to take up the jobs at the bottom (sometimes the employers do not want over qualified workers either)
 d. Have to find ways to help them

i. Many of them have the skills which companies can make use of, especially the SMEs who need professional expertise. We can match them to these jobs.

ii. Retrain them and fit them into new industries and activities that can use their expertise – in healthcare as technical operators and nurses, in schools as teacher and library assistants, in the security industry as specialists and supervisors, in the hospitality industries, or even financial services.

iii. Or have them start their own small businesses to provide personalised services, such as tour guides, personal chefs, butlers that help people get their lives organised
We will do our utmost to help workers cope with restructuring. But one solution we must avoid is welfarism
 a. Government welfare is not the answer to our problems. Many countries have tried welfare

i. Unemployment benefits

ii. Grants and subsidies

iii. Government as employer of last resort
 b. Ultimately, these do not work

i. Experience in France, Germany, Scandinavia, UK, US

ii. In the end someone i.e. the people themselves, has to pay for benefits through higher taxes

iii. Worse, in the long term welfarism will kill the drive to work and achieve, chase away talent and investments, and do us great harm

iv. Burden ultimately goes back to the people, except now its many times heavier

We should not flinch from our approach, because we are on the right track
 a. Tackling problems squarely
 b. Adapting rather than resisting inevitable changes
 c. At the same time, will help people in a way that does not discourage them to work

i. For those who need extra help – ComCare Fund, pay as you use electric meters,

ii. For general public – ERS, U-Save Scheme, CPF and Medisave top-ups

Our approach is working
 a. Economy is growing
 b. We are equipping Singaporeans with relevant skills

i. BERI has again rated Singa­porean workers No 1 in the world

c. We are creating opportunities for more jobs.

i. Creating new jobs, re-creating old jobs

ii. Nurturing new industry clusters, upgrading old clusters

iii. Pursuing new service standards

This is the Government’s responsibility. But workers too must do your part.
 a. We will give you the best chance to be employed and to improve their lives.
 b. But Singaporeans must adapt and seize the opportunities we create.
Our tripartite relationship is Uniquely Singapore – built up over many years, not easy for others to copy, a tremendous plus for us in dealing with this challenge.
So let’s continue to strengthen it, tackle our challenges together, and make Singapore a small but special country for many more years.

Full Text of Speech

Source: Singapore Government Media Release 1 May 2005



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1 May 2005