SINGAPORE - The rate of job creation may be halved as Singapore moves to grow its economy through a more productive workforce, said labour chief Lim Swee Say yesterday.
In fact, the government wants to see jobs created at the rate of 2 per cent or less per year from 4 per cent yearly over the last decade, said Mr Lim, who is also Minister in the Prime Minister's Office. The cut in job creation is a "new reality" that companies must adapt to.
Said Mr Lim: "If we were to continue that rate of growth of 4 per cent a year, come 2020 we can expect to see a workforce of more than four million, and it could be as high as 4.5 million. It's very obvious that that rate of growth is not sustainable, both from the economic angle as well as the social angle."
In short, the days of strong job creation with over 100,000 jobs added a year "is not going to happen too often in the future", said Mr Lim.
Instead, Singapore must expect job growth to stabilise at between 65,000 and 75,000 a year over the next decade, which is a more "sustainable growth" rate.
"Keep driving our economic growth through workforce growth means eventually, we will become uncompetitive because you keep growing by having more workers and not by having higher productivity."
Mr Lim's comments come a day after the Ministry of Manpower released preliminary estimates that showed a slowdown in jobs created from July to September this year to 24,900 compared with 31,900 during the same period last year - which saw a total of 120,000 jobs added.
While part of the drop can be attributed to global economic conditions, a larger factor at play is the structural policy changes that Singapore is undertaking to raise productivity, said Mr Lim.
"Is this new reality a better one for the Singapore economy and the Singapore workforce? I think the answer is, it depends," acknowledged Mr Lim.
"If we get it wrong, this slower growth in the workforce will firstly translate into higher structural unemployment . . . and we will see a growing mismatch between job seekers and job supply."
There will also be two other downsides: lower economic growth rates and lower wage increases.
But these need not be the outcomes, said Mr Lim.
"We believe that if we get it right, then the set of outcomes will be even more positive than what we have today in Singapore. To minimise structural unemployment, the solution is skills upgrading.