Brother Chen Hao, Vice-Chairman and First Secretary of the All-China Federation of Trade Unions; and Brother Jiang Guanping, Vice-Chairman and National Secretary of the All-China Federation of Trade Unions, thank you for inviting the Singapore National Trades Union Congress to participate in this international forum.
Fellow trade union leaders from the international fraternity,
In its latest World of Work Report 2014 – Developing with Jobs, the International Labor Organization (ILO) noted that countries that invested the most in quality jobs from the early 2000s grew nearly one percentage point faster every year since 2007 than other developing and emerging economies. This helped cushion the impact of the global financial crisis which erupted in 2008. The report also noted that investment in high quality jobs tended to be associated with lower income inequalities.
However, the report noted huge challenges persist. Rising youth unemployment, including among new graduates, stubbornly high informal employment and significant income inequalities require urgent policy attention.
The ILO also reported that global unemployment stood at just under 200 million in 2013, and is expected to rise by 3.2 million in 2014. By 2019, given current trends and policies, global unemployment is projected to reach 213 million. Global joblessness is projected to remain broadly at the current level of 6% until 2017.
Economic Restructuring through Productivity Improvement and Sharing of Gains
Given this global context, Singapore has done relatively well post-2008/09. Unemployment hit a high of 3% in 2009 and has averaged about 2% from 2010 – 2013. The median gross monthly income has also increased steadily from S$2,600 in 2009 to about S$3,200 by 2013. If we included employers’ contributions to the individual workers’ Central Provident Fund, the median gross monthly income increased from about S$2,900 in 2009 to about S$3,700. Real wages have also been rising, hitting a high of 4% in 2013, after taking into account employers’ CPF contributions.
Moving forward, the tripartite partners, i.e. the government, the unions, and the employers, recognized the need for our economy to restructure to meet new challenges, both global and domestic. Globally, the advanced economies are becoming more cost-competitive while developing economies are moving up the value-chain. Domestically, our economy is maturing and we have to slow down the pace of adding more migrant manpower to a more sustainable pace. To enable our GDP to grow on average by 3% to 5% per year over the next decade (2010 – 2020), Singapore would need to achieve higher productivity growth of 2% to 3% per year. Increased productivity is not achieved merely through increased efficiency, but restructuring our economy to provide more room for rapidly growing and innovative enterprises.
To support the economic restructuring, the Singapore labor movement launched the government funded S$30 million-Inclusive Growth Program to drive productivity improvements in 2010. Administered by the SNTUC’s Employment and Employability Institute, the key target was to benefit low wage workers across 12 sectors over 2 years, by uplifting their skills, pay and lives.
Under IGP, participating companies would receive various grants to support deployment of productivity-enhancing technology and equipment, and training directly relevant to productivity improvement. Participating companies also have to undertake to share the productivity gains with their workers.
By end-2012, some 33,000 low wage workers have benefited under IGP, enjoying, on average, a basic pay increase of 10% through sharing of productivity gains.
Encouraged by this success, the government provided an additional S$70 million budget in 2012 for e2i to help an additional 70,000 workers over a 3-year period.