Policy shifts will halve figure to 2%; emphasis on lifting productivity, skills
By Walter Sim, The Straits Times, 2 Nov 2012
SINGAPORE should brace itself for slower job growth over the next decade as this becomes a "new reality", said labour chief Lim Swee Say yesterday.
Job growth, which has averaged about 4 per cent each year over the past decade, will level off at 2 per cent or below due to structural policy shifts, he added.
"The days of strong job growth of 80,000, 100,000, 120,000 a year are not going to happen too often in the future," he said, adding that the figure is likely to be 65,000 to 75,000 in future.
Instead of expanding the workforce, the emphasis will shift towards boosting productivity and upgrading the skills of the existing workforce to ensure that the economy continues to be competitive, said Mr Lim, who is also Minister in the Prime Minister's Office.
The comments came a day after the Manpower Ministry released preliminary estimates for third-quarter job growth, which showed that 24,900 jobs were created from July to September, down from 31,900 in the same period last year.
Mr Lim was speaking to service industry professionals at an information-sharing session organised by Jumbo Group of Restaurants and Spring Singapore to showcase its productivity initiatives.
He said it is "very obvious" that a 4 per cent annual rate of job creation is "not sustainable".
"If we keep growing by having more workers and not by having higher productivity, eventually we will lose our competitiveness."
Mr Lim added that persisting with a job growth rate of 4 per cent a year would yield a workforce of more than four million people by 2020, most of whom will be supplemented by foreign workers as the local workforce has not been growing fast enough to meet the demand.
"The Government, in consultation with the unions and employers' federation - the collective tripartite partners - have come to a conclusion that we need to switch gears," he said.
He acknowledged that it is going to be difficult, but the Government will continue to engage businesses and offer help.
"All of us are going to come under tremendous pressure. So instead of hoping that one day, the Government will have a U-turn in our policy - which is not going to happen - what we should do is to apply our minds to repositioning our workforce."
Economists said it is natural for job growth to continue to taper down.
Barclays Capital economist Leong Wai Ho said: "A 2 per cent clip over the next 10 years actually means the country continues to grow at a fairly decent pace. It is a reflection that we are coming to the end of a period of capacity addition in the economy... as Singapore faces an ageing demographic and slowing trend growth."
The unemployment rate for residents and Singapore citizens is likely to remain low due to manpower demands and the curbs on foreign workers, said OCBC economist Selena Ling.
"The projection strikes a balance between a tighter manpower policy and not choking off growth altogether."
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