Singapore must stay the course on its restructuring journey, even though it may not be a painless or instant one, labour chief Lim Swee Say said yesterday.
"I firmly believe that we are heading in the right direction," he said.
Even though there is still much work to be done in some sectors, such as construction and retail, the move towards productivity improvement and innovation is gaining momentum, added Mr Lim, who is secretary-general of the National Trades Union Congress.
To improve, the jobs that are created must be above the national average in terms of productivity and the value they add.
At the first of the labour movement's National Day observance ceremonies, held at The Promontory @ Marina Bay, he told reporters: "Our business cost and wage cost are going up, so we are becoming a higher-cost location for doing business. But being a higher-cost location does not mean being a high-cost location."
Speaking to an audience of 7,000 comprising workers and their family members who had gathered for a picnic, Mr Lim also said that Singapore needs to keep one step ahead of the competition by doing things other people cannot do, so that the profitability for businesses and the wages of workers can continue to improve.
Separately, in his written National Day message to unionists, Mr Lim said that a higher re-employment age for older workers and a more progressive wage ladder for low-wage workers will make Singapore's labour situation even better.
Under the Retirement and Re-employment Act, which kicked in in 2012, bosses must offer healthy workers who have performed satisfactorily re-employment from the ages of 62 to 65, or a one-off payment. But calls have been made to raise the ceiling to 67, and a tripartite committee is discussing when and how to do so.
Mr Lim also said separately that progressive wages are applicable to workers at all levels. "For us to succeed at restructuring, we have to find ways to make better use of every worker because of the tight labour market."
The progressive wage model sets out career ladders with benchmark wages for resident workers - Singaporeans and permanent residents - in various sectors.
Adopting the scheme is mandatory for licensed cleaning companies, and this will soon apply to the security sector as well. Discussions are under way about the need for a progressive wage model for the landscaping industry.
Mr Lim, who is Minister in the Prime Minister's Office, shared in his message that he told international union leaders in June about Singapore's low unemployment rate, its growing employment rates for women and mature workers, and how wages were rising faster than inflation.
"I hope the next time when we share our Singapore Story with tripartite leaders of other countries, it will be an even better story," he added.
Only a minority of countries will succeed in creating enough jobs, both in number and quality, said Mr Lim. "I believe Singapore will be one of them."
While employers agree with the need to improve productivity, many are at a level where, without additional manpower, they feel unable to grow their capacity, said Association of Small and Medium Enterprises president Kurt Wee.
He added that although the association tries to help members make use of available government assistance programmes, it still comes across some who are unable to take on additional orders.
"It still feels like productivity doesn't happen overnight and sometimes, businesses wonder if it will happen at all," he said.
This article was first published on August 3, 2014.
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