1. Today, the employment rate of workers aged 55-59 years is only 55%. For those aged 60-64 years, it is even lower at 35%. On the other hand, life expectancies are rising and the workforce is ageing.
2. From the individual perspective, there is a need to continue working for as long as they can. This is necessary for their financial and emotional well-being. From the economic perspective, a higher proportion of our workforce will consist of older workers. Many of them still possess the physical and mental faculties to be highly productive.
3. At the NTUC’s Ordinary Delegates’ Conference last year, we have affirmed our commitment towards raising the employment rate of older workers. At Workplans Seminar earlier this year, we have committed to “Raising the Effective Retirement Age” as a key NTUC priority for 2006.
4. How should we go about doing this? What has been done in the past? In 1993 and 1997, we raised the legal retirement age. Only limited improvements in the employment rate of older workers, with increases coming largely from women. For men, it merely arrested a downward trend in the employment rate, with a small uptrend.
5. To achieve a significant improvement in employment rate of older workers, we do not believe raising the legal retirement wage is the way to go. It may even be detrimental to the employment prospects of older workers if issues are not resolved.
6. What are we doing now? We have worked with individual employers to find out their concerns, and helped them re-design their jobs to better suit older workers. Also ‘reclaimed’ low-paying jobs and transformed them into higher paying ones to meet expectations of workers.
7. Going further, we recognize that cost-competitiveness is a key concern for employers. Earlier this month we launched our efforts with 23 willing employers. I am happy to say that more have come on board, and we are now working with 56 willing companies. Together we will revamp the seniority-based pay systems into a performance-based one. The companies will offer re-employment to their retired employees. We want more to come on board.
8. Healthcare costs are a real concern to employers. In this regard, employers and workers alike should open their minds of the real benefits of moving on to a portable medical benefits scheme. This will help to ease healthcare costs to employers in the long run, with an ageing workforce. It also helps to address the cost-imbalance between a younger and older worker.
9. It is also important to change mindsets. Employers must realize the benefits of employing and maximizing the value of older workers, and the need to adapt to an ageing workforce.
10. More and more older workers now realize the need to work and are willing to do so. But it is also important for them to know that their best chances of continued employment lies in upgrading themselves, and accepting that performance rather than seniority based wages and compensation is the way to go, if they are to have a good chance of staying gainfully employed for as long as possible. It is also necessary to accept changing to a different job, not necessarily at the same pay. Unions have a big role to play to explain this to workers.
11. We also need to work on general public perception. Some people have told me that emphasizing on the need to help older workers remain in gainful employment sometimes sound like exploitation! Many people also react with sympathy rather than respect to older workers who keep on working. We have to look at the issue from a new perspective. Why shouldn’t a person in his 60s, if he is fit and able, continue to work? With longer life expectancies hitting the 80s, is a person in his 50s and 60s really considered old? How can it be exploitation when working longer helps to maintain their quality of life, both financially as well as their emotional and mental well-being?
12. Government has accepted the Tripartite Committee’s recommendations. It has pledged more support to job and wage restructuring efforts to benefit older workers, through ADVANTAGE! scheme. Recently, the Prime Minister also announced in his budget speech, more assistance for older, low-wage workers.
13. We have started the ball rolling, but the journey is a long one. The Tripartite Committee set concrete targets: to raise the employment rate of workers in the 55-59 age group by 5% in 5 years, and by 7% for the 60-64 age group. We need to pull together as a labour movement, and set this as top priority for all of us. We need each and every union to do its part. Only then will the targets be reached.
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For media queries, please contact:
Ms Chong Yan Cheng
Consultant
Corporate Communications Department
National Trades Union Congress
DID 6213 8190
HP 9797 8985
Email chongycheng@ntuc.org.sg
