I wonder if such scheme to allow bosses the flexibility to cut costs will help workers retain their jobs.  Already, employers have access to Jobs Credit which is itself a financial scheme to prop up businesses to stay afloat in this tough time. Nevertheless, Jobs Credit can only go so far in  helping an ailing company’s bottomline. Once the company is down and broke, there is nothing much that can be done to salvage it. By putting good money to bad businesses, I wonder if our government is doing the wise  thing here.

 

Employers may now, with the latest legislature,  have the legal means to reduce wages or ask stuff to go on no-pay leave thus effectively reducing a worker’s wages down the road. The remaining workers are  left to slough it out in the office with double sometimes treble workload share. What measures are taken to ensure that no wayward employers will seize the opportunity to victimise workers now left with less bargaining power due to this down period?

 

I also wonder why the government does not consider a short term unemployment benefit for those who are retrenched. Much of the schemes available now such as Jobs Credit   are all gear towards putting money into employers in the hope that the firms will survive and retain workers. Spurs programme is also one scheme which allow firms to send their redundant workers in this down time to be retrained and also the government will absorb part of the workers’ wages through training allowances.

 

Unemployment benefit, on the other hand,   is effectively putting good money into a jobless worker and enabling him and his family to live on with dignity instead of scraping at the bottom. The economy will also be boosted by   domestic comsumption as the retrenched will now have real money to spend instead of hoarding whatever reserves they have right now for further rainy days. This also hasten the onset of deflation – which most economists are fearful of.

 

It is timely  that our government takes a serious look at a concrete plan  to implement unemployment insurance. Many developed countries deducted a small percentage of their salaries that go into funding unemployment insurance payout. It is like a CPF deduction but much reduced in scale.A one-percentage point taken from our monthly CPF deduction could be used to fund such a payout so that there  is no  real additional expense incurred.

 

As the global economy turns uncertain and every economic recovery cycle gets shorter,  our government may be wise to look at how the retrenched and unemployed workers can be effectively assisted during down time.

 

Gilbert Goh