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SINGAPORE must persist with its restructuring efforts to sustain the real income growth experienced by the middle and lower-income groups in recent years, said Deputy Prime Minister Tharman Shanmugaratnam.
For their part, firms will need to continue to work to boost productivity, as well as invest in their workers - especially middle-aged Singaporeans - via skills upgrading and creating good career prospects for their employees. This is against the backdrop of a tight labour market.
Mr Tharman, who is leading a five- member team to contest in Jurong group representation constituency (GRC), was speaking to the media on Sunday night at Taman Jurong food centre.
Mr Tharman highlighted that Singapore has performed "unusually" well since the global financial crisis by international standards, with median households experiencing 18 per cent growth in real income over 2010-2014. Lower-income households have also seen significant real income growth, he said.
On the other hand, developed countries such as the US and Singapore's peers in the region such as Taiwan and Hong Kong have seen negative or flat real income growth.
But he warned that sustaining real income growth will be a challenge, given the uncertain and sluggish economic environment, with China slowing faster than expected and investment growth in the US remaining weak.
Still, investors and businesses remain confident in Singapore despite the uncertain environment, thanks to Singapore's policies as well as its track record of tackling crises successfully and finding new opportunities, he underlined.
"We start from a position of strength. But we have to start off recognising the realities. It's a highly uncertain world. We have to work harder to create opportunities for all," he said.
Singapore has been working towards becoming a more inclusive society and creating opportunities for all Singaporeans. "We have to find the right balance in our economic strategies, making sure that our businesses are able to survive, or at least a large segment of our businesses can survive, do well and upgrade."
He also noted that over-tightening foreign labour policies would "wipe out" Singapore's businesses - especially in the SME sector. Meanwhile, maintaining the status quo of SMEs being mired in low productivity is not an option either.
Mr Tharman went on to point out that Singapore is already starting to see results on its path towards restructuring. Productivity growth, measured by value-added per hour of work, for the five years since 2010 was 3 per cent per year, although much of it was created in 2010 itself. Sustaining productivity improvements will require programmes and schemes to encourage investments for greater efficiency and better jobs, as well as working with business associations, unions, individual entrepreneurs and the employees themselves.
"We've got to be patient about this. We always knew it would be a 10, 15-year game. We're making progress but we have to see this through," said Mr Tharman, adding that Singapore cannot sustain the "unusual income growth" if it doesn't push ahead with restructuring.
He added: "We want to pay particular attention not just to the young ... but our middle-aged Singaporeans, including the PMEs because they're the ones who find it really tough when they lose their jobs."
The government will do more to help this segment, but employers also have to do their part in a permanently tight labour market, he stressed, adding there cannot be discrimination against older Singaporeans in the workforce.
"There's going to be no U-turn in our labour policies," he said. "Employers have to recognise the value in every middle-aged Singaporean. Recognise their value, train them up, give them good jobs and give them good career prospects."