Plans to Support Workers in Economic Slowdown and Effectiveness of Past Plans

4 Mr Desmond Choo asked the Minister for Manpower (a) how effective have the previous downturn measures been in helping workers to stay in their jobs or find new opportunities; and (b) what are the plans that the Ministry has in place to support workers should the economy continue to slow down and jobs may be lost.

The Minister for Manpower (Mrs Josephine Teo): Mr Speaker, the most severe downturn in recent years was triggered by the Global Financial Crisis of 2008. Measures taken then helped companies to manage excess manpower and to invest in skills for the recovery. In an MOM survey carried out in 2009, three in four companies with earlier plans to retrench workers reported they would postpone or reduce the number of affected workers due to Government assistance schemes such as Jobs Credit and the Skills Programme for Upgrading and Resilience (SPUR). Helped by improving external conditions, resident unemployment rate rose but did not exceed 5% throughout the Global Financial Crisis.

Our current situation and outlook are different from that in 2008. For example, in the first half of 2009, retrenchments exceeded 19,000, when in a typical year, during that period, retrenchments would be about 15,000. But in the first half of 2009 alone, retrenchments were 19,000. Job losses estimated for the whole year, some analysts came in with numbers such as 100,000. That was the situation in the beginning of 2009.

If you look at the situation today, actually, retrenchments have not picked up. If we look at the second quarter of 2019, retrenchments remained fairly low at 2,300. Total employment growth slowed but it did not stall. Employment growth remained robust in sectors such as (a) Information and Communications, (b) Community, Social and Personal Services, (c) Professional Services, and (d) Financial Services. This suggests that while most employers are exercising greater caution in hiring, most are not laying off their existing workers.

MOM, together with MTI and other Government agencies, is monitoring the economy and the labour market closely. We are ready to step up support for companies and workers under the Adapt and Grow initiative. Workers can tap on employment assistance and programmes offered by WSG and NTUC's Employment and Employability Institute (e2i). These include the Career Support Programme, Career Trial and Professional Conversion Programmes (PCPs) that provide wage and training support to help workers access new jobs or reskill for new opportunities. Jobseekers can also consider taking up the Attach-and-Train PCPs which train the workers ahead of hiring demand and these are available in selected sectors with strong growth potential. In addition, WSG's Careers Connect and NTUC’s e2i career centres offer employment facilitation services, such as career coaching, employability workshops, job fairs and job matching.

The Taskforce for Responsible Retrenchment and Employment Facilitation, which was formed in 2016, proactively reaches out to retrenched workers and provides them with timely employment support, including job matching. The Taskforce will also continue to engage retrenching companies on responsible retrenchment practices.

Mr Desmond Choo (Tampines): I thank the Minister for her reply. I have two clarifications. One, in the event of a long and prolonged slowdown whereby jobs are lost, what are the levers that the Ministry is prepared to consider, including reducing the foreign manpower quota? Two, what are the supports given to the vulnerable workers, especially those who are older and might find it harder to transit to another growth industry?

Mrs Josephine Teo: Mr Speaker, it is premature to speculate what kinds of support measures should be introduced, the reason being that, as I have explained earlier, the current situation is a slowdown, very different from the kinds of downturns we most recently experienced in 2008/2009. The approach that we take is to make a correct assessment of the situation. We will have to ask, in any slowdown or a general downturn, what are the reasons that have caused the slowdown or the downturn. Is it due to cyclical factors or is it due to structural factors or a combination of both? This is because the strategies that we then adopt to bring about a recovery will be very different under the circumstances, depending on what they are.

Specifically, Mr Choo asked about foreign worker quotas. In fact, in the services sector, the dependency ratio ceiling will be reduced downwards. We said in the Budget Debate during the Committee of Supply earlier this year that there was a need to bring us on a more sustainable path when it comes to the growth of foreign employment in the services sector. We actually had quite a lively debate about whether those measures were appropriate. We agreed that we would go ahead with two moves – one beginning in January 2020 and then another step coming in January 2021. Both are still on the cards. At the present time, the assessment that led to that set of recommendations has not changed. It is still important for us to press on with restructuring. So, that quota reduction is going ahead.

Mr Choo also asked about older workers. There have been a lot of support measures put in place for older workers, including the Special Employment Credit as well as many programmes, such as job redesign, that help companies to retain their older workers, help them to stay productive and able to contribute. I recognise where Mr Choo is coming from. He is concerned that, if there are job losses, will older workers bear the brunt of it. We are equally concerned and we will watch very closely. But in the meantime, that should not detract us from putting in place measures that will support senior employment for the medium to longer term because of the demographic transition that we can expect to observe in the next decade. That set of recommendations has been considered by a tripartite work group and I think it would not be too long before that set of recommendations is presented.