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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published July 7, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Best bet is productivity, not more foreign labour
Minister sketches out response to a tight labour market
By CHUANG PECK MING
(SINGAPORE) WHEN the property market heated up recently, the government took steps to cool it.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Gan: He's also keen to entice more women and older people who left the work place to get back to work </TD></TR></TBODY></TABLE>But don't expect the authorities to let in more foreign workers to ease the tight labour market and rising wages - symptoms of a recovering economy that are hurting companies big and small.
If anything, the government is inclined to go the other way. It has tweaked the foreign worker levy so the more imported labour companies hire, the bigger the levy they pay.
The first of three phases of this levy increase took effect last Thursday.
At the same time, the government has just made the last payment to companies under the Jobs Credit Scheme, ending one-and-a-half-years of support for wages to save jobs.
Manpower Minister Gan Kim Yong - the man with his hand on the foreign worker tap - says he understands the bind companies are in, but that the only way out of it is to boost productivity.
With higher productivity - a 2-3 per cent annual increase is the national target - companies will get more out of fewer workers and can afford to pay higher wages.
What's more, companies will get all the help they want to take their productivity to the next level.
'The government has put in place quite a lot of measures for productivity (increases),' Mr Gan told BT in an hour-long interview. 'Productivity is the way to go.'
And companies should act fast. Despite the dark clouds still hanging over the US and Europe, there's a good chance that Singapore's tight labour market will stay tight at least until the end of the year.
'Our employment situation remains quite healthy,' Mr Gan said. 'If we can maintain this momentum for the rest of the year we will see healthy job creation.'
The minister would not venture to predict another record year for employment because of the uncertainty in the US and Europe - and Singapore is still bouncing back from a slump.
But he notes that the overall jobless rate had fallen to 2.2 per cent at end-March. 'And this is low considering that we're coming out of a recession.'
Despite the low unemployment rate - in many countries, 2.2 per cent is considered full-employment - Mr Gan hopes to see it fall further.
'There's still room,' he said, pointing out that Singapore's lowest unemployment rate on record is 1.4 per cent, attained in 1997.
But if the jobless rate falls further, the labour market will become tighter. Mr Gan is well aware of this, which is why he is keen to entice more women and older people who left the work place to get back there.
'We're encouraging older people and women to return to the job market,' he says. 'They will help us enlarge our labour force.'
But even so, the number will still fall short - and the minister recognises this.
'There's a limit to how many actual people we have who can enter the work force, given our population,' he said.
And this constraint should drive home how critical productivity improvement is for Singapore to sustain economic growth, Mr Gan says.
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Best bet is productivity, not more foreign labour
Minister sketches out response to a tight labour market
By CHUANG PECK MING
(SINGAPORE) WHEN the property market heated up recently, the government took steps to cool it.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Gan: He's also keen to entice more women and older people who left the work place to get back to work </TD></TR></TBODY></TABLE>But don't expect the authorities to let in more foreign workers to ease the tight labour market and rising wages - symptoms of a recovering economy that are hurting companies big and small.If anything, the government is inclined to go the other way. It has tweaked the foreign worker levy so the more imported labour companies hire, the bigger the levy they pay.
The first of three phases of this levy increase took effect last Thursday.
At the same time, the government has just made the last payment to companies under the Jobs Credit Scheme, ending one-and-a-half-years of support for wages to save jobs.
Manpower Minister Gan Kim Yong - the man with his hand on the foreign worker tap - says he understands the bind companies are in, but that the only way out of it is to boost productivity.
With higher productivity - a 2-3 per cent annual increase is the national target - companies will get more out of fewer workers and can afford to pay higher wages.
What's more, companies will get all the help they want to take their productivity to the next level.
'The government has put in place quite a lot of measures for productivity (increases),' Mr Gan told BT in an hour-long interview. 'Productivity is the way to go.'
And companies should act fast. Despite the dark clouds still hanging over the US and Europe, there's a good chance that Singapore's tight labour market will stay tight at least until the end of the year.
'Our employment situation remains quite healthy,' Mr Gan said. 'If we can maintain this momentum for the rest of the year we will see healthy job creation.'
The minister would not venture to predict another record year for employment because of the uncertainty in the US and Europe - and Singapore is still bouncing back from a slump.
But he notes that the overall jobless rate had fallen to 2.2 per cent at end-March. 'And this is low considering that we're coming out of a recession.'
Despite the low unemployment rate - in many countries, 2.2 per cent is considered full-employment - Mr Gan hopes to see it fall further.
'There's still room,' he said, pointing out that Singapore's lowest unemployment rate on record is 1.4 per cent, attained in 1997.
But if the jobless rate falls further, the labour market will become tighter. Mr Gan is well aware of this, which is why he is keen to entice more women and older people who left the work place to get back there.
'We're encouraging older people and women to return to the job market,' he says. 'They will help us enlarge our labour force.'
But even so, the number will still fall short - and the minister recognises this.
'There's a limit to how many actual people we have who can enter the work force, given our population,' he said.
And this constraint should drive home how critical productivity improvement is for Singapore to sustain economic growth, Mr Gan says.
</TD></TR></TBODY></TABLE>
