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Why is the govt making it easier for employers to reduce workers' salaries? Gilbert Goh.

More flexibility for bosses but what is there for employees?

I refer to the article "More flexibility for bosses to cut costs and save jobs" (ST 18 May).

I wonder if such schemes to allow bosses the flexibility to cut costs will help workers retain their jobs.  Already, employers have access to the Jobs Credit Scheme (JCS) which is itself a financial scheme to prop up businesses to stay afloat in this tough time. Nevertheless, the JCS 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 recommendations, have the legal means to reduce wages or ask staff to go on no-pay leave which will effectively reducing a worker's wages down the road. The remaining workers are left to struggle it out in the office with double, sometimes treble, workload share. What measures are being 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. Many of the schemes available now, such as the JCS are all geared towards putting money into employers’ pockets in the hope that the firms will survive and retain workers. Spurs programme is also one scheme which allows firms to send their redundant workers to be retrained and 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 the bottom. The economy will also be boosted by domestic consumption 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 hastens 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 deduct a small percentage of workers’ salaries to fund unemployment insurance. 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

President

Transitioning - Unemployment Support Services

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