EMPLOYMENT SITUATION

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EMPLOYMENT SITUATION:

(Update): 11.

Mdm Halimah Yacob asked the Acting Minister for Manpower (a) whether he will provide an update on the employment situation in view of the recently downgraded GDP growth forecast of 4% to 5%; (b) which sectors will continue to see job growth; and (c) what is the projected unemployment rate for the year.

The Acting Minister for Manpower (Mr Gan Kim Yong): Sir, employment growth in the first half of 2008 has been healthy, with 143,800 jobs added. MTI's full year GDP growth forecast is now between 4% and 5%; this means that the economy is still expected to grow, albeit slower, in the second half of 2008. We, therefore, expect continued employment growth, but probably at a slower rate in the second half.

With the slowdown in major external economies and global concerns with inflation, some businesses have become more cautious in their hiring. This has contributed to an increase in the overall unemployment rate, from 2% in March 2008 to 2.3% in June 2008. This is at the same level as it was a year ago in June 2007. Unemployment might rise in the second half of the year. If the slowdown in export-dependent sectors such as electronics continues, retrenchments might also edge up above the record-low in 2007.

Nevertheless, with continued employment growth, there will be sufficient jobs created for Singaporeans. The bulk of the new jobs will be in the services sector, especially the tourism-related industries. Driven by big-scale events as well as the upcoming Integrated Resorts in 2009 and

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2010, we should see continued demand for workers in many types of jobs in these industries, ranging from restaurant managers, waiters and chefs to retail assistants and event organisers. We expect 50,000 jobs to be created in the tourism sector between 2008 and 2010.

We also expect job growth in other industries. For instance, the robust growth in the aerospace industry driven by new projects announced by industry giants such as GE Aviation and Rolls Royce will translate into continued demand for technicians and engineers. In the finance sector, various segments such as wealth management and consumer and corporate banking are expected to continue growing and over the next five years, an average of 7,000 new jobs are expected to be created annually, ranging from financial analysts and risk managers to private bankers.

As we continue to create good jobs, we will need to prepare our workers through the CET programmes to refresh and renew their skills, so that they can enhance their mobility and employability and take advantage of emerging opportunities in new growth areas.

Mdm Halimah Yacob: **** Two supplementary questions, Sir.

The Minister said that 143,000 jobs were created in the first half of this year. I would like to ask the Minister how many of these jobs have gone to Singaporeans and how many have gone to foreigners.

My second supplementary question, Sir, is this: in view of the slower economic growth and the projected higher unemployment rate, would the Ministry consider reviewing the current quotas on foreign workers, which have been liberalised over the last few years?

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Mr Gan Kim Yong: Sir, with regard to the employment statistics between Singaporeans and foreigner employees, this data is collected over a year and this data will be available on an annual basis. The next set of data will be available early next year.

With regard to the second question on whether we will review the foreign quota, as I mentioned yesterday, we monitor the employment landscape very carefully but we have to take into account the availability and the presence of foreign workers creates flexibility for our employment market. In fact, it is this flexibility that has allowed us to continue to create new jobs, and many of these new jobs do go to Singaporeans. So, it is important for us to continue to ensure sufficient flexibility in the labour market. At the same time, we also want to ensure that Singaporeans will continue to find good jobs and will continue to be able to upgrade themselves. To do this, it is more important for us to focus on giving them skills, providing them with training, so that we can enhance their mobility. I think as we create new jobs, if Singaporeans do not have the skills for these jobs, I think unemployment rate will go up. So, while we create new jobs, the strategy to manage unemployment is to ensure that Singaporeans who have been displaced by retrenchments or economic restructuring will be able to find new jobs quickly. And the way to that is to give them training, give them skills, give them capability and enhance their mobility and employability.

Mr Zaqy Mohamad (Hong Kah): The Minister mentioned some new jobs to be created in the new sectors. I want to ask the Minister what is his assessment of our programme so far, and its ability to gear our workers towards these new sectors that have been mentioned.

Mr Gan Kim Yong: I think we have put in quite a lot of effort. Earlier this year,

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we announced the Total plan, which is our strategy towards training manpower for tourism sector in view of the oncoming

major events as well as major projects, like the Integrated Resorts. These programmes have progressed quite well. Our target was to train 74,000 workers in the area of hospitality and tourism-related jobs. Until today, we have trained close to half of that number. So I think we are making good progress in many of these programmes. But I would agree that there is a lot more that we need to do and there is a lot more effort that we need to put in to reach out to the workers who need upgrading and training for this purpose.

Mr Gautam Banerjee: Can the Minister, perhaps, explain to this House that since our economy has changed quite a lot from some years back and the fact that the economic growth figure has come down in a particular month or quarter, does it not translate to loss of jobs in the same proportion? We are a much more capital intensive economy now and some particular sectors like pharmaceutical and electronics can be affected by exports to overseas countries. This would have a disproportionate impact on the GDP figures, but not on employment, and we have also developed the service sector. So I think some of the concerns that the MPs have may be a little bit misplaced on job creation. We must not take knee-jerk reactions on longer term employment policies that we have in place. I think you need to –

Mr Speaker: You are answering on behalf of MOM, Mr Banerjee?

Mr Gan Kim Yong: Sir, I must thank Mr Banerjee for the comments. In fact, that was a very important point. Many of the industries today are capital intensive. They have invested in infrastructure and these investments are huge. They themselves would not retrench workers just at the spur of the moment because orders

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have come down. In fact, many of them would hang on to their workers in anticipation of recovery of their business. Sometimes, you will find that the economic and employment cycles may not be totally in phase, so this is something that we have to bear in mind.

Mr Speaker: Mdm Halimah, last question.

Mdm Halimah Yacob: I would like to ask the Minister whether there is a mechanism in the Ministry of Manpower to monitor the situation when there are a lot of requests for foreign workers in a particular sector or company, to determine whether they have indeed made efforts to try and encourage more Singaporeans to go into that sector, including providing them with the skills to do the job, and whether they are amenable to employing older workers and women who want to go back to work. While we may be seeing a lot of employment generally, we also need to ensure that these two groups are not affected. So is there a mechanism in the Ministry of Manpower to monitor that?

Mr Gan Kim Yong: Sir, the Ministry of Manpower works very closely with our tripartite partners, both the employers' federation as well as the unions, and Mdm Halimah knows very well that we have very close cooperation with them. And every time, when there is a problem in the employment market, whether it is a request for foreign workers, the need for job redesign or the need to train our local workers, we will work together and reach out to them and we will monitor the situation very closely. We get feedback from the unions whether these employers are indeed putting in efforts to retrain their workers. We will also monitor very closely their actual need for foreign manpower.

For the tourism sector, for example, there is currently a working group formed

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among the tripartite partners as well as among Ministries to work together with the various players in the tourism and hospitality industry to make sure that with the increase in the demand for workers, given that a few new projects are coming onstream, how do we coordinate to make sure that there is a sufficient supply of workers, both local as well as foreign, not only the number that we can supply but the quality and the skills that they need. So I think these are things that the Ministry of Manpower will continue to do on a very regular basis, in consultation with our tripartite partners.