Singapore's economy is picking up and may do better than it did last year, Prime Minister Lee Hsien Loong said yesterday.
Total employment - the number of workers in jobs - is expanding, he noted in his annual May Day message to workers.
However, there are more retrenchments and unemployment is also creeping up, he said.
This mixed picture shows an economy in transition, and workers, businesses and the Government have to do their part and work together to ensure jobs for all, he said, as he gave an overview of global conditions.
Singapore's economy grew 2 per cent last year, and the United States, Europe, Japan and emerging economies are seeing an upswing.
But Mr Lee said prospects for international trade remain uncertain as the US' attitude has changed. He cited how when Group of Twenty finance ministers met recently, they could not renew their standard pledge to keep global trade free and open as the US objected.
"We will have to watch how other countries react to this US stance. If they, too, adopt win-lose approaches to trade, the result will be more protectionism, which will hurt everybody," he added.
Mr Lee's message comes as the Ministry of Manpower said last Friday that unemployment rose to 2.3 per cent in March, up from 2.2 per cent in December.
"As the economy matures, I expect that to creep up," Mr Lee said of the unemployment rate, noting that other developed countries have unemployment rates of 5 per cent or higher.
Manpower Minister Lim Swee Say warned in a May Day message last Friday that unemployment here has risen and could rise further.
This is because some sectors in the economy are still struggling with structural changes, a concern that union leaders shared with PM Lee when they met last month.
Mr Lee said businesses are restructuring to adapt to changing conditions. "Some existing jobs are being lost even while we are creating more new jobs," he said, as he outlined steps that need to be taken.
"Our response should be to work hard to keep up our growth. Our economy can no longer grow at 5 to 7 per cent, but we can still achieve 2 to 3 per cent growth by improving our productivity," he said. "Two to 3 per cent is a good growth rate for our current stage of development. It will mean we can continue creating new jobs and improving our lives."
He added: "We must also work harder to help workers stay employed and find replacement jobs if they become unemployed."
This task of helping workers cope with an economy in transition and find jobs is a tripartite effort, he said, referring to the three-way partnership between unions, employers and the Government.
Mr Lee said businesses must be willing to change, adopt new technologies, expand overseas and seize opportunities out there.
"Our workers must be adaptable, keen to upgrade and reskill themselves, when necessary, changing careers to secure good jobs," he added.
The Government will take the lead and give full support to employers and workers, Mr Lee pledged.
He cited schemes such as SkillsFuture, job-matching and professional conversion programmes for workers and those retrenched.
The Government is also paying close attention to PMEs - professionals, managers and executives - worried about losing jobs, he said. PMEs have borne the brunt of recent retrenchments.
"The Government is always on the side of workers, but we make sure we are business-friendly and support our businesses to grow so that we have jobs for all," he said, wishing all a happy May Day.
Mr Lee will deliver his annual May Day Rally speech today.
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