We can see that due to the rapidly developing industries, technology often overtake workers and replace them at work. Hence, we can see that there is structural unemployment and many people are retrenched.
Structural Unemployment
Introduction
Structural unemployment occurs when skills of a workers are no longer needed in the workforce due to the rapidly restructuring economy and/or the replacement of workers through machinery. In a rapidly changing economy, if workers do not consistently upgrade and renew their skills, it will become obsolete.
Detailed Analysis
One of the reasons why cyclical unemployment (unemployment resulting from economic recessions that causes a decrease in demand hence retrenchment - where this reverts back and occurs again when there is a recession) can degenerate to structural unemployment, is due to the fact that salaries do not decrease. This is like an "insider-outsider" mechanism.
The employed are not willing to decrease their salaries in order to re-absorb the unemployed. Hence, the unemployed, who lost their jobs due to the recession, are unable to be re-employed. Hence, the unemployment rate remain high for a longer period of time. However, this is not very evident in Singapore due to the fact that there were wages and CPF cuts in the last two recessions. Enabling us to remain our competitive edge.
Another factor is labour mismatch. This is because the rapidly restructuring economy keeps on increasing the skills required for jobs. Hence, when workers do not renew and upgrade themselves, they cannot accept the new jobs and there is labour mismatch. EDB estimates that two-thirds of the new jobs that will be created from manufacturing investments will require skill labour, but only about 35% of Singapore's existing workforce has post-secondary and above qualifications.
Lower-educated workers will have problems finding new jobs in the rapidly developing economy. This is due to the fact that the economy is shifting towards a more knowledge-based one. Therefore, lower-educated workers will lose their competitive edge as compared to their professional counterparts. (Chart 4 - http://app-stg.mti.gov.sg/data/article/21/doc/NWS_ACF18.pdf)
Therefore, we can see that in order to reduce the effect of structural unemployment, workers have to constantly renew and upgrade their skills in order to keep up with technology and job skills demand. Hence, Singapore's government is far-sighted and introduces retraining programmes for retrenched workers in order to keep Singapore's workforce competitive.
Upgrade and renew
In order to facilitate re-training. The ministry of manpower has introduced the "Continuing Education and Training (CET) Masterplan". This plan aims to expand existing training institutes and quadruple training capacaity from 22,000 to 80,000 workers by 2010. The expansion of training centres and Institutes will cater to more workers and it will allow for more re-training of a greater proportion of the workforce. Hence, this will ensure that Singapore's workforce remains competitive.
Press release:
We can see that with re-training programmes constantly being renewed and increasingly catering to a wider spectrum of people, Singapore's workforce will be able to remain competitive.
Finally, the government has also raised the retirement age to 62. This means that experienced workers will be able to be mobilized and they will also be able to better use their knowledge through re-training programmes. Hence, with all these polices in place. Singapore's workforce will be able to remain competitive!
-------------------------------------------END---------------------------------------------------------------
Here is a short video that reminds people to be adaptable and flexible. Change is necessary:
Structural unemployment occurs when skills of a workers are no longer needed in the workforce due to the rapidly restructuring economy and/or the replacement of workers through machinery. In a rapidly changing economy, if workers do not consistently upgrade and renew their skills, it will become obsolete.
Detailed Analysis
One of the reasons why cyclical unemployment (unemployment resulting from economic recessions that causes a decrease in demand hence retrenchment - where this reverts back and occurs again when there is a recession) can degenerate to structural unemployment, is due to the fact that salaries do not decrease. This is like an "insider-outsider" mechanism.
The employed are not willing to decrease their salaries in order to re-absorb the unemployed. Hence, the unemployed, who lost their jobs due to the recession, are unable to be re-employed. Hence, the unemployment rate remain high for a longer period of time. However, this is not very evident in Singapore due to the fact that there were wages and CPF cuts in the last two recessions. Enabling us to remain our competitive edge.
Another factor is labour mismatch. This is because the rapidly restructuring economy keeps on increasing the skills required for jobs. Hence, when workers do not renew and upgrade themselves, they cannot accept the new jobs and there is labour mismatch. EDB estimates that two-thirds of the new jobs that will be created from manufacturing investments will require skill labour, but only about 35% of Singapore's existing workforce has post-secondary and above qualifications.
Lower-educated workers will have problems finding new jobs in the rapidly developing economy. This is due to the fact that the economy is shifting towards a more knowledge-based one. Therefore, lower-educated workers will lose their competitive edge as compared to their professional counterparts. (Chart 4 - http://app-stg.mti.gov.sg/data/article/21/doc/NWS_ACF18.pdf)
Therefore, we can see that in order to reduce the effect of structural unemployment, workers have to constantly renew and upgrade their skills in order to keep up with technology and job skills demand. Hence, Singapore's government is far-sighted and introduces retraining programmes for retrenched workers in order to keep Singapore's workforce competitive.
Upgrade and renew
In order to facilitate re-training. The ministry of manpower has introduced the "Continuing Education and Training (CET) Masterplan". This plan aims to expand existing training institutes and quadruple training capacaity from 22,000 to 80,000 workers by 2010. The expansion of training centres and Institutes will cater to more workers and it will allow for more re-training of a greater proportion of the workforce. Hence, this will ensure that Singapore's workforce remains competitive.
Press release:
We can see that with re-training programmes constantly being renewed and increasingly catering to a wider spectrum of people, Singapore's workforce will be able to remain competitive.
Finally, the government has also raised the retirement age to 62. This means that experienced workers will be able to be mobilized and they will also be able to better use their knowledge through re-training programmes. Hence, with all these polices in place. Singapore's workforce will be able to remain competitive!
-------------------------------------------END---------------------------------------------------------------
Here is a short video that reminds people to be adaptable and flexible. Change is necessary:
