Achieving Sustainable Growth
The Singapore economy grew by 4.9 percent in 2011. More than 120,000 jobs were created and the unemployment rate dipped to a 14-year low of 2.0 percent in December 2011. However, the strong demand for workers dampened productivity growth to 1.0 percent in 2011, below the target of 2 to 3 percent per annum for this decade.
The Ministry of Trade and Industry has projected that for 2012, the economy will grow by between 1 and 3 percent. Economic uncertainties persist, while the local labour market continues to be tight especially for the services sector. There are also concerns about rising business costs.
To address these challenges, employers must enhance efforts to raise productivity, tap the diverse segments of the labour market to meet their manpower needs as well as upgrade low wage service jobs.
In this way, we can work towards achieving sustainable inclusive growth.
Persevering with Productivity Efforts
We should not be discouraged by the dip in productivity growth in 2011. Raising productivity over the long term requires perseverance and sustained efforts. Productivity is key to countering rising business costs and manpower shortages as well as the upgrading of low wage jobs.
At the company level, labour-management cooperation is crucial to cultivating a culture and mindset for continuous productivity improvements. Management must demonstrate productivity leadership by engaging the unions and workers in initiatives and programmes to improve work processes and to cut down wastage to reduce costs.
Where a company embarks on mechanisation or automation, or where jobs are enlarged or redesigned, workers must be appropriately trained to work in the new environment and productivity gains should be fairly shared.
Building Inclusive Workforces
To sustain business growth, employers need to ensure that Singaporeans make up the core of their workforces, which should be inclusive and globally competitive.
To meet their manpower needs, employers can attract local workers from the latent pool of the economically inactive, which number around 338,000 from age 25 to 59. They should reemploy employees beyond 62 in light of the new Retirement and Re-employment Act. They can also provide employment opportunities to persons with disabilities, which number about 100,000.
The Government has provided support in the form of Special Employment Credits for some of these groups of potential workers. Other schemes such as the 4R programme, Flexi-Works! and the Open Door Fund are available to support employers who strive to make their workplace inclusive.
Sharing Growth with Low Wage Workers
The gross real income of workers at the 20th percentile declined by 2.4 percent annually from the period 2001- 2006 as the economy recovered from the 2001 recession and 2003 SARS crisis. However, their gross real income improved by 2.2 percent annually from the period 2006-2011 when the economy grew by 5.8 percent annually. Strong and sustained growth uplifted the wages of the low wage workers.
We are strengthening tripartite efforts to help low wage workers benefit from the economic growth and higher productivity.
For companies that out-source their services, they should adopt best sourcing instead of cheap sourcing. Service providers should ensure workers are well cared for with at least the statutory benefits and receive their pay on time.
More importantly, they should look at upgrading jobs and help their workers to upgrade their skills set to enable them to enhance their earning capacity.
Strengthening Tripartism as We Progress Together
We are entering more challenging times. We have to leverage on our strong tripartite cooperation to work out practical solutions to overcome every challenge that we face.
In this way, we will further strengthen our tripartite bonds and trust as we progress together as employers, workers and as a nation.
On behalf of our 2,200 employer members, I wish all workers a Happy May Day.
