Face up to slower growth and productivity push: Lim Swee Say

By Cheong Suk-Wai, Senior Writer, The Straits Times, 27 Feb 2016

Singapore's "golden era" of galloping economic growth in the past 50 years is over, and everyone working here will have to accept slower growth while continuing to boost productivity, Manpower Minister Lim Swee Say said yesterday.

But it is not all doom and gloom, though, he stressed at a forum on tripartism, or the uniquely harmonious ties among the Government, employers and workers here.

The other stalwarts of tripartism present were economist Lim Chong Yah, founding chairman of the National Wages Council; and Singapore Airlines chairman Stephen Lee, who was president of the Singapore National Employers Federation for more than 26 years.

Mr Lim said the Government, businesses and the labour movement were in the midst of identifying skills and jobs of the future in 25 sectors of industry, so they could design better careers for most.

He also said that rapid and disruptive improvements in technology and higher automation would not necessarily lead to loss of jobs, but create even more jobs to complement newfangled machines. The aim was to shape every Singaporean as "precious human capital".

Mr Lim said that if everyone kept pursuing the sort of growth that took per capita income here from US$516 in 1965 to US$56,742 in 2014, "even if the operation is successful, the patient may be dead".

He pointed out that a country's gross domestic product has two parts - growth in the national pool of workers and the rate of productivity - and noted that the size of the Singaporean workforce would decline from now on, given the ageing population and ever-fewer births.

So, the way forward is to boost productivity, he said during a lively discussion moderated by The Straits Times' editor-at-large Han Fook Kwang.

Mr Lim commended, in particular, the hospitality industry, which he said could cope with a likely 20 per cent increase in hotel rooms in 2020 without hiring more workers.

During the question-and-answer session, hotel veteran Albert Teo agreed, recalling that Mr Lim had "been pushing us like hell" to raise productivity so that only 0.62 of a person was needed to clean a hotel room, compared to three persons per room in China.

Mr Lee, who likened productivity improvements to shifting a boulder, said SIA was also working with aircraft manufacturers to boost productivity by, say, servicing planes on the tarmac instead of in hangars, to reduce their downtime.

To Professor Lim's plea that Singapore continue welcoming highly skilled foreign workers, Mr Lim said the country could no longer pursue a liberal foreign worker policy. As it was, the Government shrank the inflow of foreign workers from a high of 100,000 a year to 24,000 in 2014, and 22,000 last year.

Today, two-thirds of all workers here are Singaporean and permanent residents, and the rest foreigners. Mr Lim said the Government will keep it like so in future.

In all this, Mr Lim noted, Singapore's "secret weapon" was tripartism because thanks to it, all stakeholders in the labour force here cooperated well, unlike in other countries.

Prof Lim recalled, however, that in the 1970s, there were lots of differences in views and even table-thumping during negotiations. But they always kept all discussions confidential and agreed to a united stand in the end.

Labour chief Chan Chun Sing, who was in the audience, said Singapore's dilemma was that it was a city and a state. So, while slower growth would not be a problem if Singapore were competing with other countries, it was a huge setback because the real competitors were other dynamic global cities which did not lack talent and other resources.

He said that to ensure Singapore was not relegated "to the dustbin of history", employers and employees had to change "the mindset and method" of working.

But any change in the labour landscape would not include a mandatory minimum wage.

Mr Lim said the Government had done "a serious study" and decided against it because first, cash- strapped employers might use it as an excuse to sack workers; second, "minimum wage might become maximum wage" if employers let wages stagnate at the minimum rate; and third, it would become a "sticky wage" if workers would not allow their employers to revise their pay downwards during a downturn.

Instead, the Government now has a ladder for the poorest paid workers - cleaners, security guards and gardeners among them - with the introduction of a progressive wage system for them.

STRENGTHENING SINGAPOREAN CORE

We are not talking about Singaporeans being 100 per cent of the core, but the core not being Singaporeans as a sideshow.

- MANPOWER MINISTER LIM SWEE SAY



GROWTH AND EQUITY

When I was chairman of the National Wages Council, I said we had to have growth with equity. Later on, the emphasis was more on growth and less on equity. The result was that equity measured by GDP deteriorated tremendously, frighteningly.

- PROFESSOR LIM CHONG YAH, founding chairman of the NWC



WHY NWC REMAINS RELEVANT

NWC is handy in a crisis because it is an established institution, it has got credibility and it is a useful safety net.

- SINGAPORE AIRLINES CHAIRMAN STEPHEN LEE