Yeoh Lam Keong, an Ex-GIC chief economist said that “Manpower Minister Josephine Teo does not seem to have a sufficient understanding of labour market economics required to see the important need for unemployment insurance (UI) in Singapore”.
His comments come after Workers’ Party (WP) MP Sylvia Lim proposed – at the Budget debate in Parliament on Wednesday (Feb 26) – the implementation of unemployment insurance for older workers who have been retrenched.
While Ms Teo said that the Government would “keep an open mind” to the suggestion, she called the present support given to such workers “more sustainable.”
Weighing in on the entire issue, Mr Yeoh, often vocal on social media, wrote in a post yesterday (Feb 27), that “Minister Teo’s portrayal that companies with UI “usually have persistently high unemployment “ is inaccurate at best and misleading at worst”.
UI, or unemployment insurance is targeted at protecting employees whose work may become redundant, which is why it is also called redundancy insurance. Under unemployment insurance, retrenched workers would receive a payout.
He also explained that contrary to Ms Teo’s belief, there is little evidence of an inefficient reduction in the incentive to work where there are properly designed UI systems in place. He added that giving people unemployment insurance for about three months enables optimum job search, which “prevents workers from jumping at the first job that may not be such a good match for their skills or experience”.
With artificial intelligence replacing both skilled and unskilled workers, “Not putting in place an intelligent unemployment protection system is thus short sighted, inhumane and just poor manpower policy, imho”, he said.
During the budget debate, Ms Teo said that providing unemployment insurance would lessen the motivation of workers to become employed again, and also reduce employers’ willingness to shell out retrenchment benefits. /TISG
Read related: Workers’ Party suggests unemployment insurance for older workers, but Josephine Teo says current approach is more sustainable
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