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Workfare to help low wage workers in six key areas

Source: www.mom.gov.sg

WORKFARE: REWARDING WORK Ministerial Committee on Low Wage Workers in Singapore

Our Strong Work Ethic Has Enabled Economic Progress
Singapore prospered over the past 40 years because we made ourselves relevant and competitive in the global economy.
We have achieved a high standard of living with per capita income reaching US$26,8001 in 2004, comparable to countries such as France and Italy.
We succeeded because our policies supported values of personal responsibility, self-reliance, thrift, education, and hard work. We prospered because our people had a strong work ethic and continually upgraded their skills to improve their productivity.
Low Income Singaporeans Have Benefited from Economic Progress ¡­
Economic growth has benefited all Singaporeans. Even the lowest 20% in household income has accumulated substantial assets.

Ownership of Consumer Goods amongst the bottom 20% of households

Durables

1998

2003

Television

97

98

Audio / Video Compact Disc Player

41

69

Cable TV Subscription

8.1

20

Refrigerator

98

98

Microwave Oven

24

38

Air-conditioner

37

50

Handphone

29

72

Personal Computer

25

48

Internet Subscription / Access

7.1

31

Source: Household Expenditure Survey 02/03

Some 87% of these households own homes, well above the 46% and 52% of such households in the United States and the United Kingdom respectively. The equity in their homes, defined as the estimated resale value of their HDB flat less the outstanding mortgage, is $138,000 on average.
These households have also enjoyed rising standards of living. Virtually all lower income households own a television and 69% own a compact disc player; 72% own mobile phones compared to just 29% five years ago. Half of them own an air conditioner.
¡­ But They Face New Challenges
However, lower income households face new challenges today. The economic and employment landscape has changed dramatically in recent years.
Hundreds of millions of lower-cost skilled workers from China, India, Eastern Europe and Latin America have entered into the global workforce. Competition from these workers and economic restructuring are exerting downward pressure on the wages of less skilled workers in all countries.
The widening income gap between the top and bottom 20% of our households is not unique to Singapore. In a globalised economy, jobs would be lost if wages are too high, and talent will move if wages are not high enough.
If we raise wages for low skilled jobs without improving productivity, companies in Singapore will lose their competitiveness and relocate. More jobs will be lost.
We will need holistic strategies to help lower income Singaporeans adjust to these challenges. Ultimately, all Singaporeans must continue to share in the fruits of our progress, as they have done in the past. Our social compact of working and progressing together must carry through to the next generation.
Those who are capable of work must be able to find good jobs, earn adequate wages to support themselves and their families, own homes, educate their children, and put aside enough for their medical and retirement needs. These are simple goals, but very few countries, now or in the past, have achieved them.
Singapore¡¯s Response: Workfare not Welfare
Our response to this challenge will shape the values of Singaporeans and, as a consequence, the nature of our society itself. If we choose wrongly, it will set us on the wrong trajectory and undermine what we have achieved over the last 40 years.
Our response cannot be centred on Welfare. Welfare should be restricted only to those who really cannot work and do not have family support.
The majority who can work, must not become dependent on the state, on handouts, grants and subsidies. Welfare will weaken their ability to fend for themselves and their families. It will erode the work ethic which has underpinned our success as a nation.
It is unfair to those who strive to work. It will undermine self-reliance and self-responsibility. Misdirected welfare is ultimately unsustainable because we will have to raise taxes very high to support growing needs. Eventually, we will all be worse off.
Singapore¡¯s response must be Workfare. Workfare is based on the idea that promoting the work ethic is the best way to help people. It is the same spirit that has inspired our growth and prosperity from Independence.
From the time of our nation¡¯s birth, we had to make a living by being relevant to the global economy. To meet the demands of industrialisation, our workers trained and upgraded their skills.
To compete effectively in the emerging knowledge-based economy, our students worked hard in our world-class ITEs, polytechnics and Universities. To help low skilled workers upgrade, the Government tailored programmes like BEST, WISE and MOST. We prospered because we were always willing to strive, seek, and never yield.
Thus, Workfare is not new. But we must ensure that Workfare remains relevant in this new global environment where downward wage pressures as well as expanding social and economic needs, can strengthen the temptation to ask for handouts. We should never take our work ethic for granted.
Workfare is based not on helping people to meet an ever-expanding list of needs, but to help them to work so that they can help themselves and their families. It reaffirms the work ethic and makes it tangible by extending benefits to low wage workers when they demonstrate efforts to upgrade, to find jobs, and to stay employed.
More.....
Key Data on Bottom 20% of Households

Source: www.mom.gov.sg Press Release 30 Aug 2005 Brief On Workfare

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Tuesday

6 September 2005