Economist Yeoh Lam Keong said that the portrayal of countries with unemployment insurance (UI) inaccurate having persistently high unemployment is inaccurate at best and misleading at worst”.
This was one of the three points that Mr Yeoh had outlined in response to the parliament exchange between Minister of Manpower Josephine Teo and Worker’s Party (WP) MP Sylvia Lim who had proposed that UI be implemented for older workers who have been retrenched.
In his Facebook post on 27 February — the former GIC Chief Economist, explained that 25 out of 27 Organisation for Economic Co-operation and Development (OECD) developed countries operated an unemployment insurance system including countries with low unemployment. The examples he listed include Germany, Japan, Switzerland, Korea and Taiwan—some of which are more competitive expert economies and have lower unemployment when compared to Singapore.
Next, Mr Yeoh pointed out that there is “little evidence of an inefficient reduction in incentive to work in properly designed UI systems” as claimed by Ms Teo.
“In fact, the labour market evidence shows that UI for about 3 months enables optimum job search that prevents workers from jumping at the first job that may not be such a good match for their skills or experience,” said the veteran economist.
Finally, he said, “Minister Teo seems oblivious to the trend that artificial intelligence is already increasingly replacing both unskilled and skilled workers and consigning them to a gig economy of much more frequent job shifts, often with lesser paying work.”
Mr Yeoh elaborated that there are en estimated 25,000 to 30,000 households that fall into poverty at any one time due to involuntary unemployment, adding that the lack of an automatic unemployment protection system will cause many to “fall through the cracks” of the country’s Commcare and skills retraining systems.
He concluded, “Not putting in place an intelligent unemployment protection system is thus short sighted, inhumane and just poor manpower policy, [in my honest opinion].”
However, Mr Yeoh also credited Ms Teo for her promise to “keep an open mind” on the issue.
“Let’s hope it is open enough to see the above arguments and the big picture that Singapore still lags the developed world in many areas of much needed social protection,” he said.
Apology for “mis-reporting” Ms Teo
Mr Yeoh apologised yesterday (1 March) on Facebook for “mis-reporting” Ms Teo and “confusing The Independent and perhaps the public”.
Mr Yeoh was referring to his post on 27 February which was then reported on by online local news site The Independent the next day, which the economist said used a “sensationalistic and inaccurate headline quote” from him which was “lifted entirely out of context”. The economist said that he strongly objects to and disagrees with that headline.
He explained further down,
“The full quote should be :
“ Unfortunately Manpower Minister Josephine Teo does not seem to have sufficient understanding of labour market economics to understand the important need for unemployment insurance in Singapore for at least three reasons” which has quite a different, specific and qualified meaning.
Mr Yeoh added, “For the record, I did not mean to say that Minister Teo’s overall understanding of labour market economics was insufficient per se.”
Regarding his own mistake in the earlier post, Mr Yeoh quoted the erroneous sentence which was: “Minister Teo’s portrayal that companies with UI “usually have persistently high unemployment “ is inaccurate at best and misleading at worst.”
He explained that he meant to say ‘countries’, not ‘companies’.
He went on to clarify, “Hopefully the very next paragraph conveyed that my intended meaning was clearly “countries” and not “companies”.
Mr Yeoh said he has corrected his original post accordingly and hopes that The Independent would make note of the correction and made the necessary amendments to their article.