Ideas flow on continued help as Jobs Support Scheme nears expiry

Singapore

BETTER wage subsidies, tighter immigration rules, and even the return of a pre-Independence "Workers' Brigade": These are some ideas mooted to keep Singaporeans employed.

"The ideal solution is to ensure that those retrenched could get back on track to become self-reliant again as soon as possible," sociologist Tan Ern Ser told The Business Times.

On the other hand, economics associate professor Walter Theseira warned against fixating on headline numbers such as job placements.

"What's more important is that workers get useful skills, firms get valuable business tasks completed and build productive capacity, and the right workers find their way to the right firms," Prof Theseira remarked.

A key thrust in Singapore's policy approach to the virus-induced downturn is the Jobs Support Scheme (JSS), where the government dished out wage subsidies to save workers from being let go - especially during the circuit breaker in April and May.

The scheme, introduced at the Budget in February, is set to expire in August. It offers three tiers of support - ranging from 25 per cent to 75 per cent - based on how badly an industry has been affected by Covid-19.

But Mohamed Faiz Nagutha, Asean economist at Bank of America Securities, suggested an extension even into next year if the economy stays weak.

The JSS could be refined to keep subsidies in place only for sectors that are still lagging, or only for lower-wage employees, he said. The scheme provides cash support for up to 75 per cent of the first S$4,600 of each local's gross monthly wage.

"However, the gradual tapering of fiscal support to lower rates could be a challenge for certain firms," he added, referring to sectors such as manufacturing and trade-related industries, where wage co-funding was stepped down from 75 per cent during the circuit breaker, to 25 per cent. Some firms may not have been able to return to full operating capacity, and even if they did, they could still have an issue with "lacklustre demand", he noted.

DBS senior economist Irvin Seah also called for more targeted JSS and enterprise finance schemes, adding that "it requires additional policy intervention to smoothen the transition pain" for retrenched professionals.

He also proposed tightening immigration rules, such as benchmarking the minimum qualifying salary for an Employment Pass (EP) to the median resident income, which was nearly S$4,600 as at mid-2019.

That's even as Terence Ho, divisional director for manpower planning and policy at the Ministry of Manpower, told the public in late June that work pass policies "are regularly updated" to protect local workers. That included upping the EP threshold from S$3,600 to S$3,900.

As for more creative measures, Prof Tan called unemployment insurance, or letting members tap their Central Provident Fund accounts, "more straightforward" compared with a universal basic income (UBI), which he said entails higher taxes.

Prof Tan, an associate professor of sociology at the National University of Singapore, also suggested reviving the Work Brigade instituted in 1960.

Such an approach, which put young people to work in building roads and reclaiming swamps, "involves creating all kinds of jobs, in place of just dishing out cash", said Prof Tan. "It has a much lower barrier to entry as its intent is to absorb everyone who needs a job, instead of dishing out welfare support to the unemployed."

But Prof Theseira, who floated a UBI while a Nominated Member of Parliament in April, told BT: "The old joke is that the easiest way for government to boost employment is to hire half the population to dig holes and the other half to fill them in again.

"I don't think we intend to do that, but we must ensure we remember the goal is economic recovery, not just maintaining employment."

Senior Minister Tharman Shanmugaratnam also said recently that "some form of unemployment benefit", such as unemployment insurance, would be needed amid "high structural unemployment". But he added that Singapore is not in that boat.

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