Budget debate: No drop in pay for over 60% hired under jobs incentive scheme

About three in 10 of the Jobs Growth Incentive hires were previously unemployed.
About three in 10 of the Jobs Growth Incentive hires were previously unemployed.PHOTO: ST FILE

SINGAPORE - More than six out of 10 workers hired under the Jobs Growth Incentive (JGI), which encourages employers to bring forward the hiring of locals through wage subsidies, did not experience a drop in pay.

In addition, about three in 10 of the JGI hires were previously unemployed, said Manpower Minister Josephine Teo on Wednesday (March 3).

"Majority had been out of work for more than six months," she added.

Giving this update during the debate on the Ministry of Manpower's (MOM) budget, Mrs Teo stressed that the JGI - which will be extended by seven months to the end of September - is one strategy taken by the Government to ensure locals remain employable.

"To reduce scarring, we must be ready to deal with further displacements," she noted. "Without JGI lubricating the process, the movement of workers into growing firms and industries will likely be slower."

The JGI extension falls under MOM's priority to shore up the hiring of locals in the short term.

Mrs Teo also laid out two other priorities of her ministry this year, namely to help every segment of the workforce emerge stronger and support business transformation.

"Beyond immediate concerns, we must not lose sight of the medium and longer term. Digitalisation, remote work, widening income gaps and an ageing workforce will continue to challenge us," said Mrs Teo, adding that the ability of employers to innovate is critical to improving job quality over time.

Within two months of the JGI's implementation last September, it had supported more than 110,000 new local hires, or about 5 per cent of the workforce.

"In two short months, such a movement into growing companies is not insignificant, especially when we consider the hiring weakness," said Mrs Teo, adding that about half of the new hires were aged 40 and above.

The extended JGI will give firms hiring eligible locals up to 12 months of wage support from the month of hire. Those taking on mature workers aged 40 and above, people with disabilities and former offenders will be given up to 18 months of enhanced wage support.

The JGI comes under the SGUnited Jobs and Skills Package launched last year to tackle the anticipated labour market fallout from the Covid-19 pandemic.

Noting that the job market may take a while to recover, Mrs Teo said the Government aims to shore up hiring demand for employers and help workers seize better opportunities.

The SGUnited Jobs and Skills Package is being revved up with an additional $5.4 billion allocated to it. This will go towards supporting the hiring of 200,000 locals through the JGI, and provide 35,000 traineeships, attachments and training opportunities this year.

Other components of the package - such as the SGUnited Mid-Career Pathways and the SGUnited Traineeships - will be extended till the end of March next year.

Said Mrs Teo: "For all unemployed job seekers, until a suitable job materialises, these traineeships and attachments are the best way to be supported."

The SGUnited Mid-Career Pathways allows mid-career job seekers to gain in-demand skills and widen their professional networks while waiting for permanent jobs. Mid-career individuals on attachments to host organisations may even be considered for permanent employment when business conditions improve.

From April 1, mature workers under this programme can receive a higher monthly training allowance of up to $3,800, compared with $3,000 previously.

The government co-funding of the training allowance of these mature workers will also be raised from 80 per cent to 90 per cent for host organisations.

For fresh graduates, the SGUnited Traineeships programme will be extended. It provides recent graduates or those who will soon graduate with opportunities to gain industry-relevant work experience amid weaker hiring sentiments. Host organisations can also gain access to a pool of fresh talent through this programme.

Starting from April 1, the training allowances for Institute of Technical Education (ITE) and polytechnic graduates under the traineeships will be raised, said Minister of State for Manpower Gan Siow Huang.

"This is to give an extra boost to our ITE and polytechnic graduates, who are facing more difficulty in finding jobs," she said.

The allowance for ITE graduates will increase by about 30 per cent, up to a maximum of $1,800, while that for polytechnic graduates will go up by around 20 per cent, up to a maximum of $2,100. The allowance for university graduates will remain unchanged, with a maximum monthly allowance of $2,500 for degree holders.

The maximum duration of each traineeship will also be shortened from nine to six months, but firms will not be allowed to take on the same trainee for a second traineeship.

Mrs Teo said these initiatives come on top of longstanding schemes like the Workforce Singapore's professional conversion programmes (PCP), which have seen good outcomes.

About 90 per cent of PCP participants remained employed after 18 months, she added. Around seven in 10 earned more than their last-drawn salaries.

Responding to the call of Workers' Party MP Jamus Lim (Sengkang GRC) for unemployment insurance, Mrs Teo said this can provide useful income relief, but "cannot replace efforts to help people get back to work".

Insurance payouts may also not match the allowances provided by the Government, she added. "Many unemployed persons will not qualify for any redundancy insurance payout. They include new graduates just entering the workforce, workers who were dismissed, (and) whose contracts ended and were not renewed."

Mrs Teo concluded her speech by emphasising the importance of tripartism, particularly during the Covid-19 pandemic when the labour movement has helped workers stay employed while employers that had to downsize sought to preserve a strong Singaporean core.

"The Covid-19 pandemic did not just test the resilience of our workforce. Tripartism was also tested, and we are emerging stronger," she added.