Structural Unemployment A Worry For Government

29 Nov 2011

Labour chief Lim Swee Say has identified structural unemployment as an issue the government is concerned about, a problem he expects to get worse given the economic outlook.

Mr. Lim was speaking at a forum organised by the Young Sikh Association on Saturday.

The labour chief told some 200 participants at the forum that for real wages to keep growing, the economy must expand by three to five percent over the next decade.

But it won't be easy. A big concern is a mismatch between workers' skills and what's demanded by employers. Mr. Lim said low-wage workers are vulnerable to structural unemployment.

Another group is the Professionals, Managers and Executives (PMEs).

He said the last 15 years have seen a concerted effort to train workers better. And the current focus on achieving sustainable and inclusive growth is an extension of this goal.

Mr. Lim said: "Simply put, sustainable growth is to ensure there is enough opportunities. Inclusive growth is to minimise structural mismatch. In other words, if a growing number of Singaporeans are not able to take on these jobs that are being created in the economy, then they'll be excluded."

The labour chief said one way out for the PMEs is professional conversion to adapt to new jobs. As for low-wage workers, the emphasis is on upgrading skills and re-designing jobs.
Mr. Lim, who is also the Minister in the Prime Minister's Office, said the economy needs a mix of local and foreign enterprises to grow. And the government's aim is to ensure Singaporeans form the core of the workforce, even as it continues to accept foreign workers.

The ratio between foreign and local workers will be kept at 1:2.

Mr. Lim recalled his time in the Economic Development Board (EDB) when he was involved in persuading multi-national corporations to set up shop in Singapore. Faced with a lack of trained workers, the EDB offered these companies a "package deal", where the agency would fund the training of Singapore workers, who would go on to take up managerial positions in these companies.

But the process of "glocalisation" - where multi-nationals globalise their operations but localise their workforce - is more challenging in Singapore because of its relatively low unemployment rate.

"So we said, 'How about this? You don't have to localise your workforce to the extreme'," Mr Lim said.

Instead, foreign companies would be persuaded to allow Singaporeans to form the core of their operations here.

"If we do it in this way, over time the industry will sink roots in Singapore. So when the companies think about moving out of Singapore, they've got to think about the core of Singaporean workers. This core has taken them five years, 10 years, 20 years to invest. Why would they give it up?" said Mr Lim.