Minister for Manpower Josephine Teo, in Parliament said that there are serious downsides to having unemployment insurance.
Responding to a suggestion raised by Worker’s Party’s Sylvia Lim, Mrs Teo said that having such a plan would reduce workers’ motivation to find work and decrease the willingness of employers to pay retrenchment benefits.
Ms Lim and the Worker’s Party had raised the idea of unemployment insurance since 2016, which claims to better protect workers. They proposed for workers and employers to contribute a small percentage of the salaries of employees to a fund to finance the unemployment insurance payouts.
Mrs Teo then shared that countries that provide employment insurance usually have persistently high unemployment – unlike Singapore. Singapore also has government programmes that help workers retrain and pick up new skills or upskill themselves such as SkillsFuture and also the Adapt and Grow programme.
“Our current approach of focussing on employment support has shown encouraging results and is more sustainable. As long as jobs are still being created, a focus on employment support helps both the individuals and businesses,” said Mrs Teo.
Mrs Teo also highlighted that the Government helps mid-career workers who lose their jobs through:
- Helping businesses sustain the momentum of job creation
- Maintaining the sense of motivation among workers to keep upskilling
- Promoting fair employment practices to employers
