Minister Tan: Glad to see increase in local employment

What are our objectives? To re-cap: We need to ensure we have quality and good growth so that jobs and opportunities can continue to be generated for our people. But at the same time, we are aware that we need to moderate our labour growth numbers to keep things sustainable.

We just released the Q2 labour market report, and the Statement on Labour Market Developments which sets out the trends in the labour market for the first half of the year. It also provides a glimpse of what we think is to come for the rest of the year: http://bit.ly/17uDVwU

There are a few key observations we noted:

• There is significant increase in local employment of 34,100 in the first half of 2013, up from 22,800 in the same period last year – Employers are hiring more locals to meet their manpower needs.

• Over the same period, foreign manpower growth (excluding Foreign Domestic Workers or FDWs) slowed down from 34,100 to 27,000. This was the smallest growth since the first half of 2010.

• Growth in foreign workers was largely driven by the construction sector due to infrastructure (such as transport and healthcare) and housing developments. These are necessary to better provide for our people’s needs. Excluding the construction sector and FDWs, foreign employment grew by just 11,700 in the first half of 2013, compared to the gains of 18,600 in the same period last year. This was only about one-third of the local employment growth in the first half of 2013.

I am particularly glad to see the increase in local employment. We have been encouraging Singaporeans of various profiles to return to the job market and incentivising businesses to hire them. I hope to see this continue.

The tightening of foreign labour growth is being felt in many quarters and the pain is not insignificant for some of the smaller SMEs. While the reduction in inflow is welcomed from a macro perspective, we have to see how best to support our companies as they go through this period of change. Schemes and grants are available to help and we hope that they will make that transition. We are mindful that as we restructure, there will be companies who do not make it and would close, shedding jobs and affecting the livelihoods of some Singaporeans.

As I mentioned at the start, we have to ensure we remain competitive and attractive because there still is a need to draw in the good jobs and opportunities for our people. But as we moderate our labour growth, which we must, it will also have side effects.

It is a delicate balancing act to moderate labour growth while encouraging quality economic growth that is productivity-driven.