Dear Comrades,
1 The report of what we have done in the past two years is presented to you for your scrutiny and comments. I believe we have done well. Union membership is at an all-time high; we have 150,000 members below the age of 35 years. Our finances are sound.
2 Our priority focus has been on jobs for Singaporeans. Global trends have forced companies to restructure. It is tough to maintain full employment because there is constant churn: old jobs are lost, and new ones created. The public sector is not spared. As a result, there is some structural unemployment. Our annual average resident long-term unemployment has increased from 0.4% in 1996 to 1.3% in 2004, with more than 23, 000 residents being unemployed for more than 25 weeks.
3 Our approach is to bring in new investments to create more jobs to replace the ones that are lost. Indeed, more jobs have been created. There has been a significant increase in the first 9 months of 2005. As DPM Mr Wong Kan Seng mentioned earlier, there was in increase of 78,200 jobs. All major sectors registered employment growth. Even the construction sector continued to add workers (2,300) for the third consecutive quarter, indicating a turnaround, though a slow one.
4 Unemployment has dropped from 3.4% to 3.3%. Let’s bring it further down.
5 However, the job demand is increasingly for skilled workers, with the proportion of jobs for less skilled workers shrinking. What does this mean? It means we have to acquire higher skills in order to take advantage of the new jobs created. Our efforts in retraining have been successful so far, thanks to the efforts of our unions. 28% of workers sent for training under the Skills Redevelopment Programme or SRP have upgraded or deepened their skills level since 2003, with the rest expanding the range of their skills set.
6 The latest MOM report shows that the majority of the jobs created are going to locals. But we cannot be complacent. This challenge is never ending and we have to press on with skills upgrading.
7 It can be tempting to try to protect our jobs, resist business restructuring and prevent retrenchment. However, as the experience in many European countries show, this approach can only harm workers’ interests in the long run. By forcing companies down this path, we would accelerate the rate at which they move out of the country for more conducive business environments, and the attractiveness of the country as an investment destination will suffer. Ultimately, there will be fewer jobs to go around, and the ones who would suffer most would be the workers left jobless.
8 Hence our approach is not to resist such inevitable changes, but to help our workers cope with change. We do this by making sure that our workers remain employable, and maintaining the competitiveness of our workforce. And we have been successful so far.
9 One example of a company coping with change is PSA. Faced with competition, PSA restructured. It was a painful and emotional exercise. It has worked. Last year, PSA employees got good bonuses. They are optimistically looking forward to the bonus on this year’s earnings. I believe the relations between the unions and management have become stronger as a result.
10 I visited PSA’s port operations in Antwerp, Belgium recently. They have transferred Singapore’s management methods to port operations there, and productivity has risen. The Port of Antwerp is now challenging Rotterdam as the premier container port. Some major ports in Europe will become feeder ports as a result.
11 The lesson for us here is that we cannot keep still. Otherwise we would be overtaken one day. While our workforce has been ranked number one for many years, how can we be sure that we continue to be so? What we have done so far, others can learn. We have to constantly find new ways to stay ahead.
12 We should never shy away from picking a difficult path, if that is the correct path forward, in the best interests of workers. Over the last few years, we have initiated numerous new programmes to assist our vulnerable workers: the lower-income and older workers. This group of society are most affected by globalisation and restructuring. I would not have time to cover all these programmes, but I would cover what I deem to be the critical focus of the labour movement for the next few years.
Jobs for Singaporeans: Helping Older Workers
13 Our top priority for the next few years would remain looking at Jobs for Singaporeans, in particular for vulnerable workers. This is consistent with the central philosophy of our labour movement – that the best way to secure the well being of workers and their families, is for them to be employable and gainfully employed.
14 The context is changing.
15 Singapore is fast becoming an ageing society. The proportion of older workers aged 40 years and above has risen steadily. People are living longer. On the other hand, the employment rate of older workers did not increase significantly in the same period. 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%.
16 What does this mean? We have an aging workforce, but a substantial proportion of older workers are either economically inactive, or unable to find gainful employment. As people are also living longer, if workers continue to stop work at the age that they do today, their retirement funds would need to support them for a longer period of time. Let’s say that a typical person starts work at 20 and stops at 60, then lives to 80. This means that with every two years of their working life, they must accumulate enough savings to support them for a year in retirement. How many people can achieve this? What happens when they are unemployed for long periods of their working life? What about women who are home makers?
17 We used to have three-generation households, with the elderly being supported by their children. Today nuclear households are the norm, though children still support their aged parents. But there are fewer children to support the old, and the old are living longer than before. The financial strain on their families will grow.
18 In many other countries, their social security systems are already in trouble. With an ageing population that is living longer, their social security systems are in desperate need of a revamp or they would have no money to pay for the pensions of future generations of retirees. Most of these countries realize that the only way out is to keep workers working longer. We have to do the same here. It is critical that older workers are able to support themselves for as long as possible, so that they can enjoy a good quality of life. Moreover, working will also enhance an individual’s sense of dignity and self-worth.
19 Much needs to be done, and we need to press on quickly. Today our life expectancies are equal to the best of the developed countries, but our employment rate for older people is not as high.
20 We need to expand job opportunities for older workers. We need to help more women rejoin the workforce through creating more opportunities for part time work or other forms of informal work. We need to redesign jobs to make them more suitable for older workers, and enhance and modify training efforts for older workers. We want to work with willing employers to understand their problems in depth, help them revamp their wage structures, jobs, and career development paths to employ more or retain their older workers.
21 But there will also be adjustments on the part of workers. We have a seniority based wage system. We have been pushing wage restructuring in the unionised sectors for many years, and much work has indeed been achieved. However, how much of the wage structures are truly performance based and how much are they still based on seniority? Do we expect to do the same job, for the same pay, if we continue to work for the same employer?
22 We have to do some fundamental rethinking. Japan has a seniority-based wage system, with life-cycle components. When a certain age is reached, some components are no longer payable. So there is a dip in earnings of older workers, and the cost to employers drop. But the Japanese employers found that this was not competitive enough. They decided to switch to performance-based wage systems. Some of the leading companies in Japan have restructured their wage system such that wages peak soon after the age of 30 for doing the same job. Jobs are classified into broad bands. Within each band, it is rate for the job. An employee deployed to a job in a higher wage band will receive higher wages. On the other hand, an employee deployed to a job in a lower wage band will receive lower pay and this is in Japan where seniority based wages have been firmly entrenched for a long time! Implementation has not been easy in Japan. Only the leading companies have succeeded.
23 The Japanese are also raising the retirement age. People will only be able to draw on state pensions at the age of 63, and not 60. The Re-Employment Law will require employers to offer re-employment to workers when they reach 60 years, not necessarily in the same jobs or at the same pay.
24 What should we do? This is a challenging task, but we, as a labour movement has always shown that we could do the right thing for workers’ long term benefit.
25 I am happy to note that the industrial unions are engaging the companies to provide avenues for employees to work beyond 62. Many unions would agree to a reasonable and proportionate reduction in salary for the workers who want to work beyond 62. This is to ensure the older workers are not priced out of the market. For example, out of SMEEU’s 32 branches, 10 already have re-employment beyond 62 written into their Collective Agreements. The general experience from industrial unions is that, so long as the employees are medically fit and do not have an adverse performance record, companies are receptive to the idea of keeping the older workers gainfully employed on mutually agreeable terms. This is a good start.
Jobs for Singaporeans: Job Re-creation
26 Another key programme to find more jobs for Singaporeans is the Job Re-creation Programme or JRP. We need to turn some of the unattractive jobs with low pay into meaningful jobs with decent pay. This expands the pool of jobs that Singaporeans could go into.
27 Job redesign is not the natural order of things. Left on their own, companies are not likely to redesign their lower-end jobs fast and aggressive enough to attract Singaporeans. We recognised the need to intervene and stepped in, despite it being a difficult task. We aggressively targeted jobs in cleaning, education (teaching assistant), libraries (library assistant), healthcare (healthcare assistant), retail outlets, landscaping, construction (crane operator), security services, public transport (bus and taxis) and so on. I am glad to report that since its launch in March this year, we have managed to secure over 6,400 job openings for re-design, and place over 3,500 workers in redesigned jobs through the JRP.
28 The Government has recognised our efforts and are now a Tripartite effort is underway to further enhance the JRP. We are now expanding the JRP to go one step further, from helping low-skilled vulnerable workers, to also helping workers that are more skilled but also affected by retrenchments and finding it difficult to find jobs. Plans are under way to target higher value-added jobs in the $2,500 wage band under the JRP.
29 JRP will also lead the way to a nation-wide upgrading of service standards, professional standing and social status of a wide variety of jobs. JRP will be a mainstay for many years to come. We need the continued support of the entire labour movement for it to be successful in helping more workers find and keep jobs with decent pay and career prospects.
Growing and Sustaining the Labour Movement
Membership Development
30 One of the key strengths of our labour movement is the strength of our membership. Union membership has grown steadily over the last 2 years, and today, our total membership stands at more than 450,000, representing 20% of the workforce.
31 Union membership around the world is in fact declining and we are one of the few unions that are still seeing a growth in union membership. How did we do this? We reinvent ourselves, adapt to the changing profile of labour force and maintain our relevance. We could not have achieved this without the united efforts of the NTUC and our affiliates.
32 However, while we congratulate ourselves on this achievement, there are new challenges on the road ahead. Despite the growth in total membership, Ordinary Branch (OB) membership grew slowly to about 240,000. General Branch (GB) membership on the other hand, grew by over 25% to more than 200,000. If this trend continues, GB membership may even overtake OB membership.
33 What does this imply? We introduced GB membership in 1992 to allow those who are working in non-unionised companies or those who have left unionised companies to stay on as a union member. Where we can, we will organise them into conventional branches. But the needs of GB members may not always be best served by organising them into conventional branches. So we need to step up efforts to reach out to these GB members and think of new ways to service them, so as to bring more of the core benefit of representation to them. Indeed, there has been a steady increase in the numbers of GB members seeking assistance in labour-management problems. We have to organise ourselves to serve them better. And we should not be shy about publicising what we do for GB members.
34 We also want to grow membership further, and are looking at doubling union membership in the long term.
35 To do this, we need to go beyond just recruiting more members in the existing sectors. We need to target workers in new growth sectors, understand their needs and concerns, and devise ways to support and service them. For example, there is a fast growing digital media sector, with workers specialising in digital animation. In the financial sector, new financial and investment companies are joining the marketplace, in addition to the traditional banks and insurance companies. We must do more in these areas.
36 The strength of union membership does not just lie in numbers, but also in the extent of representing the entire breadth of the workforce. In this vein, another key focus for membership development is to reach out to the young. This was the very reason why we set up Young NTUC earlier this year.
37 The formation of Young NTUC was the easy part. Our focus at this stage of Young NTUC’s development, is to involve and energise the 150,000 young members that are already union members. Together with the youth chapters in the unions, we want to raise awareness and visibility of Young NTUC, and how young members can pursue their dreams and interests with the support of the union. If each of the 150,000 is able to convince a friend to join the union, we will have 300,000 young union members.
38 We need new ideas on how we can drive Young NTUC forward in reaching out to the young, and I look forward to your contributions at the workshops later.
Leadership Development
39 Another key strength of the labour movement is the quality and passion of our union leaders. Through the years, we have been able to provide support for workers and stay relevant to the changing needs of our members through the quality of union leadership and their guidance.
40 However, to support a large and fast growing labour movement, leadership cannot be left to chance.
41 Learning and development opportunities are the key in ensuring the quality of union leadership. To broaden our union leaders’ skill sets and deepen their understanding of business trends, we have set up Ong Teng Cheong Institute of Labour Studies for leadership training. We have supplemented training courses with organised learning exploration trips to China and India to raise their awareness of India and China’s development potential and its implications for Singapore business and workers.
42 To maintain the quality of leadership, we need to continuously develop and nurture the next cadre of leaders. Leadership renewal should be carried out systematically so that younger unionists with leadership potential can be groomed to take up more important roles. We need fresh leaders to build on what we have achieved, and bring the labour movement to the next level.
43 Nevertheless, the older generation of leaders shall continue to serve in the labour movement by being the mentors to the younger generations and share their experiences and imbue the same fighting spirit in them. In this way, we will have a good balance of fresh and experienced union leadership in our labour movement. In the end, the legacy of a leader should not be defined by what he has achieved during his watch, but how well he has facilitated a seamless transition to the next generation of leaders and ensure their subsequent success as well. I am glad to know that all the industrial unions have set their leadership renewal targets to recruit new leaders at both the branch as well as the Exco level. I encourage other unions to follow suit.
Well Being of Workers and Members
44 Beyond representation at the workplace on employment issues, we also acknowledge that workers would inevitably have other concerns. Through our representation to Government on workers’ rights to a safe workplace, we are glad that the Ministry of Manpower introduced a new holistic Occupational Safety and Health framework earlier this year, and will be enacting the Workplace Safety and Health Act next year.
45 There will always be a portion of members who will go through periods of financial difficulty, despite efforts to upgrade their skills and find them jobs. We will continue to tide them over such periods of distress through our various assistance schemes such as SLF Hardship Grants, NTUC Education Grants and NTUC FairPrice vouchers. We will continue to come up with new initiatives such as the NTUC Back To School Day as and when the need arises, to help workers through financial hardship, with the ultimate aim to help them get back on their feet again.
46 On medical benefits for workers, we have always advocated for portable medical benefits. Again this is an area where we are trying to look after the long term interests of workers, and help them see beyond short term gains. I understand how it can be tempting for workers to hold on to many of their current benefits which pay from the first dollar, and grant them access to higher class wards. However, such medical benefits schemes can be costly, especially as workers age. The prevalence of such schemes means that older workers become less attractive as their healthcare bill rises. It also means that while workers enjoy attractive coverage while they are employed, they lose all their benefits once they are out of a job, or are unable to secure a new job that provides similar cover.
47 Portable medical benefits, on the other hand, allow for coverage of workers while they are in-between jobs. It also allows workers to save up a pool of funds for medical costs throughout their working life, and therefore helps to even up the costs of employing older workers versus younger ones. The revamp of the Medisave and Medishield schemes now provide us with an excellent opportunity to advance the adoption of portable medical benefits, using Medisave/Medishield as the core. I urge all unions to take this opportunity to do so for the long term interest of workers.
48 The prevalence of atypical work is increasing fast. As companies look for flexibility to cope with fluctuating business cycles, atypical work arrangements such as part-time, temporary work, contracts of service and contracts for service are fast gaining favour amongst employers. Most of our existing Collective Agreements do not cover such work arrangements. We need to think of new ways of looking after the interests of such workers, and I look forward to your inputs on this issue.
Tripartite Partnership
49 I have just outlined to you some of our key programmes going forward. These programmes also illustrate the NTUC ethos – that “We Dare, We Care and We Share”.
50 We have brought our workforce through big changes over the past decades, and maintained our position as the best workforce in the world for 25 years. We could not have done so without a large, strong and united NTUC, where leaders, members and workers can all align ourselves to the common cause. However, a key ingredient to this strong teamwork is trust. Trust has been established and nurtured through the generations of leaders. Workers trust that what the NTUC is advocating, though sometimes painful in the short term, is really to their benefit in the long run. Workers trust that our leaders will ensure that throughout all the sacrifices and changes, their rights and interests will be protected, and that they will receive their fair share of rewards when the economy recovers. This trust has been borne out through the actions of generations of leaders and thus reinforced and strengthened. We must continue to nurture this strong bond of trust.
51 Another key reason for Singapore’s success is a strong tripartite partnership. This is one of the unique strengths of Singapore, which has enabled us to ride out economic storms better than anyone else. The key ingredient to the success of this partnership is again, trust. This trust was first built up by Minister Mentor Lee Kuan Yew, and nurtured by subsequent leaders.
52 In my recent visit to Ireland, the importance of trust in tripartism was also emphasized by the Irish. In Ireland, what made the tripartite partnership work was trust, which was developed from the time Margaret Thatcher was curbing the power of unions in Great Britain. Not wanting similar curbs in Ireland, the Irish Congress of Trade Union approached government and employers to work out a partnership framework. The partnership agreement was one of the key factors attracting investments, in addition to attractive tax rates and proximity to market. However, Ireland was also facing problems of high costs and had to restructure their economy. This has started to pose a strain to the tripartite partnership.
53 Irish Ferries is a previously a state-owned enterprise running ferry services, but subsequently privatised. Due to competition from low-cost airline carriers, they too had to restructure their business and lower their fares to attract customers.
54 However, the management unilaterally decided to re-flag their ships under the Bahamas, employ foreign crew at one third the pay of Irish crew and offered retrenchment to all their local crew. They also refused to negotiate with the unions. This has strained the tripartite relationship as the trust was lost.
55 The lesson for us was how we could continue to maintain the positive spirit of tripartism in Singapore through the many trials ahead. We also need to continually nurture the trust between key players amongst the tripartite partners. Only then can the spirit of tripartism continue to thrive and remain a key competitive advantage for Singapore.
56 I hope that I have given you enough food for thought on some of the critical issues facing the labour movement. I look forward to your active participation at the workshop and plenary discussions later.
