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Singapore's labor market to further tighten in recent years

Xinhua, March 9, 2015 Adjust font size:

Singapore's labor market will be tightened significantly due to lower workforce growth as well as continued curb on foreign workers, the Strait Times reported, citing Manpower Minister Tan Chuan-Jin in Parliament on Monday.

Tan said local employment rate will drop sharply from 95,000 in 2014 to just 20,000 per year in the last part of the decade, mainly because of the declining birth rate of younger generation and the boby-boomer generation gradually quitting the labor market.

Despite the demand for workforce, Tan stressed that there will be no plan to absorb more foreign workers from the government.

"Taken together with the slowdown on local workforce growth, companies must note that we will experience a significant tightening of the labor market going forward," said Tan.

In response, the government will roll out plans to expand re- employment age from 65 to 67 in "two to three year's time".

Amy Khor, Senior Minister of State for Manpower made such remarks on Monday. He said the employment rate of Singaporeans aged 55 to 64 hit a record high of 66 percent in 2014, adding that a preliminary data has shown that 99 percent of local employees from private sectors were re-employed after they retired at the age of 62.

The government therefore has included a new Special Employment Credit (SEC) to encourage companies to hire workers aged above 65. The SEC was first introduced in 2011 to provide employers with further support to hire older Singaporeans. It allows employers who hire Singapore citizens aged above 50 years to receive an offset of 8.5 percent of those employees' monthly wages. Under the new SEC this year, companies who hire Singaporeans aged above 65 will receive an additional SEC of up to 3 percent of wages, which is 11.5 percent combined with the current offer.

"We hope that this will encourage more employers to retain their older workers even after they reach 65 years and continue to benefit from their experience and expertise," Khor said. Endi