One week after the Finance Minister announced the Budget, companies continue to retrench workers. Despite the newly-introduced Jobs Credit Scheme (JCS), which was touted as a job-saving initiative, even government-linked companies are laying off employees.
Is it too early to say whether the JCS will indeed help to save jobs? Or are employers, which include government-linked companies, more concerned about their bottomline?
In short, does the JCS really save jobs?
23 January 2009
30 January 2009
31 January 2009
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Job Credit Scheme (JCS) is merely CPF subsidy. You can tell by comparing the employer’s CPF contribution rate to the JCS rate.
Have you ever wonder why JCS was introduced after DBS retrenched some of its employees? Why not before?
Also, with JCS, shouldn’t DBS take back at least some of the retrenched staffs, especially those middle-aged with heavy family commitments?
I’ve always in compassion, and that is what being taught in schools too!
Of course to government bottomline is more important. Workers are just overdue assets during the current crisis. They can simple replace these workers easily.
I feel so funny: everytime the govt ask Singapore not to do something, it is the GLC not following: First we have the DBS retrenching people at start of FN crisis, now we have Chartered Semiconductor’s retrenchment immediately afte annoucement of job credits. So what does it say? Forget about what the Singapore govt is preaching, as the GLC is also not following what they say! If the GLC need to answer to shareholders by retrenching workers, the private companies also need to answer to its own balance sheet!
So much so for walking what it preaches.
If your HQ is in a foreign country, its not up to Spore office to decide whether to retrench or not. We should be seeing more foreign companies retrenching. As for local firms, its really up to their own conscience.
I read that Job credit is only equivalent to 9% CPF rebate. Employers still have to pay the salary plus 4% CPF.
Not surprising that it can’t save many jobs, especially those deemed to be redundant.
Companies have no obligation to save jobs. After all, the staff have no qualms in leaving when times are good.
It’s the government that should provide the safety net, especially in this volatile export-oriented economy.
This policy basically assumes that workers are homogenous and thus to a firm, she is indifferent between cutting cost by
a) cutting wages or
b) retrenching workers.
However, we know that in the real world, every firm has workers of varying quality. Often, the workers with the lowest productivity is paid the same “average wage” as the others.
Thus, an across the board wage cut would usually mean that the firm would find her best workers leaving the firm while the “worst workers” would remain.
Thus, this explains why firms generally would still prefer retrenching since with that weapon, the firm can easily get rid of the lowest productive workers.
SM Goh over the weekend stressed that there should be “no use of the reserves to support social assistance programmes. I am not saying there should be no social assistance programme. As a general principle, such programmes must be funded out of revenues raised in the current term of government, not past reserves”.
Past reserves are being used to fund specifically the Jobs Credit and the Bank Credit Lines Programs to benefit companies directly and hopely with some trickles down to save some jobs. So what he is saying on behalf of the government is that it is NOT OK to use past reserves, which belong to the PEOPLE, to help its citizens directly but it’s OK to use them to help companies financially, big and small, strong and weak, with no need for means testing or application for the Jobs Credit Program. Jobs Credit is obviously a welfare assistance program for companies. But that’s Ok, says the government.
who cares?
to simple.
you got it right.
They have no confidence at all.
They just take it as a universal rule that all welfare is bad.
But passing monies to companies is also a form of welfare to the companies.
The shit thing:
companies move out of companies and leave the jobless here.
And the leaders see these people…
stupid right?
Sometime one even suspect whether do we still have enough fund in the reserve after all these years where everythings been kept under cover with totally no transparency at all to whats been going on, except we know that $millions are still being paid out to all those crooks till today.
The saying goes : “no one owes u a living”
companies that are profit-oriented need to retrench then they should retrench.
I Support Retrenchment as long as companies can say they do it as last resort. I just hope their resort is not just 1 resort bcos if so, that will be their last resort. correct or not?
Retrenchment is good as it ensures bosses companies last longer. no guarantor that such companies could survive though. depends on how long can they endure and how long the recess.
If GLCs retrench? I do not feel anything. since that prolly would be their resort of some sort like last resort.
I hope more Singaporeans will retrench our elites at the next election too. Especially those that have lost their jobs in this turmoil and whose jobs have been taken by foreigners and PRs.
We don’t owe these elites a living too.
Kudos to TOC for this article:
“In short, does the JCS really save jobs?”
TOC, you hit the nail on the temple part of the head.
Having job credits do not guarantee retrenchment will go away.
Retrenchment is business need for survival.
The little J credits is insufficient to retain an employee whose salary is way beyond the credits received. they say 12% of salary of each employee with key words ‘capped at’ something like $2500?. that to me is a mere mortally $300 per head. I wonder if that is per month or per 3 months (even worse)?
why would an employer keep a person say earning $1000 if there is no business justification to retain him? why would anyone receive $300 in order to retain a overhead of $1000? These are my understoodings. Let me know if any wrong understooding has happened.
I am thankful that there is jobfairs being organised. However, the impression I have is not very excellent. Last week, I went down to a ‘jobfair’. Its gallery showed close to 70 vacancies for a particular kind of job. the potential salary is about 1500 -2000 range. the requirement is diploma, any.
From this gallery, I applied for a few jobs. I submitted to the employment coach.
She told me , in a discreet manner, these jobs ‘would take a while, if u know what i mean’ and instead suggested me to send cv to her friend’s job portal that is not part of the fair. *wink* wink * Very resourceful person. I am impressed.
I wondered why in the gallery the number of vacancies shown is about 70 but ‘it would take a while’, which sounds frightening.
he also suggested I take some of the courses, which I need to fork some money, from the job assist program.
he referred me to apply for a course somewhere and as i found out that would cost me some money. I wonder why the requirement is stated as any diploma and yet still require to take course? then I realise that is how the program works. You need to get trained by paying some money from your pocket and some of these courses are subsidised as far as i know.
Conclusion : if you are degree holder, good luck! the current jobfairs I went to usually offer jobs with requirements of less than degree. Very few types of jobs need a degree. Nevertheless better than none. This can be seen as degree holders can also apply for non-degree jobs. good right? I saw 1 job for degree holders that require 18-20months and some 3 years of training as part of the program. the potential salary is about $2000 or thereabouts. As to how much to pay and pay for these courses, I no idea yet. So, it seems like career switch even for degree holder will take a while and need to spend time to study for some time. hopefully got subsidy.
I wonder from last year 2008 3rd or last quarter to now, how many batches of degree holders, private, distance-learning or local university grads, are sitting on the bench?
there is hope. I was asked if i keen to take up a telemarketeer job. So, being a degree holder myself, I think there is hope left for our fresh grads, which are churned out every few months or so.
the queue is getting longer .
Thong Chua Kar
reporting ‘live’ from the angsana
At least the GLCs are reacting like private companies, they are taking the sensible action in this crisis. It just go to tell the Govt that more help is needed. Facing stagnant demand, 12% wage credit is not suffcient. The Govt may have to decide how much more help is needed and who to help.
As an analogy:
“There was an earthquake. 1000 people fell into a hole in the ground. Our rescue team saved 950 of them. This is an outrage. Why couldn’t a good team save all 1000?”
Or…
“My uncle was admitted to hospital after a major traffic accident where a bus ran over him. The surgical team is supposed to be world-class. He lived, but he only went home after 2 weeks! Why didn’t the surgical team do better?”
We shouldn’t compare what has happened, to the situation before the worldwide economic crisis.
We should compare it against how much worse it could be, without the current measures.
No way This Jobs Credit Scheme can save Jobs..It’s one big show.
I wonder who’s stupid idea was it. How can they sleep with a smile and take 100K a month. No brainer.. Spurs also no Brainer will fail
I don’t beleive this crap.. If they continue to come up with stupid ideas.. The party will be losing a lot of support in the next election. Mark my words..
How is the unemployed going to get by this crisis with no financial means to live month to month !!!! I don’t understand our ruling party at all. They not the same old guards of the 70′s
Look at the daily number of people retrenched by the best companies that are nornally recession proof industries all over the world,
You think our stupid job credit scheme and spurs can save jobs.
http://www.channelnewsasia.com/sgbudget09/videoarchives.htm
I propose that all watch Mr Low’s performance on Budget peech – Day 1, and realise how badly we need more opposition in Parliament. While Mr Chiam is probably still recuperating, I hate to see how everyone else is ganging up on Mr Low.
We need more opposition, and it amazes me that no one stood up to support his view in general. And Mr Lim Swee Say can have a final final word and the house allows the incessant knocking on Mr Low.
Is everyone else blind to what Mr Low has to say about Job Credit Scheme? Are only bloggers seeing eye to eye with Mr Low and thus, all PAP MPs are blind to the views of bloggers?
This cannot be!
Mr Low, thank you!
you’ve got it wrong
the jobs credit scheme wasn’t intended to save jobs per se
it was intended to encourage r e c o n s i d e r a t i o n of retrenchment by companies who are toying with the idea
without this jcs, there would not even be a second thought by these companies
I have always doubted the job credit scheme.
HAving read the report last Saturday about this group of 5 from MOF who designed the package, I felt that this is perhaps easier to implement than the unemployment benefit as they don’t have proper records.
Though employers get 12%, they still have to fork out 88% to keep their workers and most I heard have nothing much to do.
A friend working ain a plant told me that they literally can sit down and chat the whole day as there is nothing to be done. Many fear that the axe will fall anytime in this bad situation.
There is simply no order coming in and it is surprising if employers retain workers just for them to come in and chat the whole day.
I hope that some form of welfare be provided for the r trenched workers. Many will need soem form of releif for them to tide by or else we may see a very tough situation in the next few months.
I do not believe any other country have citizens like singapore.
Without these so extraordinary people who NEVER fail to cooperate ,
this is why tripart can ‘succeed’.
I have not seen any citizen from other than sg that is so cooperative.
So, its the people.
It may be time for the government of Singapore to implement Unemployment Insurance who become unemployed due to no fault of their own. Join the facebook group: http://www.facebook.com/group.php?gid=64680475154 to show your support and advocate this initiative.
Hi LTK and SKH,
no need argue too much.
help is indeed being given.
what is important is how many are helped out of the help given?
For example, I can help a friend look for a hello kitty toy. But in the end I may or may not actually find that toy for her. But I helped.
Just ask for :
1. how many applied for job help. Black and white must be auditable.
2. of these, how many got a job matching their qualifications. thus success rate.
3. of these, how many got a job lower than their qualifications. also a form of success.
4. how many companies received JCredits and then still retrench within this year.
5. Why chartered retrench when there is JCredit announced?
6. Is it true that the max J credit per head is $300 per month or per quarter?
And then, is it true that an average employee earns more than $300 a month?
And would it make any sense to a businessman if it no longer makes business sense to retain x number of staff, to continue retaining them and receive the j credits?
7. After spending all these j credits, and if retrenchment still goes on, how is the ROI? How about issuing Consumer Vouchers initiated by Taiwan for all of its citizens regardless of age or job status to boost domestic spending and economy and give many a little de-stressing or assurance?
I believe our leaders are very capable and can clarify all our doubts and impress us. once again.
After watching LTK in parliament, I now have even more disgust for our elites, especially those who are supposed to represent the unions and workers. Since when did LTK suggest to cut CPF by 9% as an alternative to JCS? Has he counted his own CPF so happily till he has gone bonkers?
Those who have been retrenced will not benefit from JCS. Yet our elites choose to ignore this important issue. JCS is like a form of welfare for companies to keep Singaporean workers. But there is no evidence that significant jobs will be created through JCS and even if so will it be created for foreigners rather than retrenched Singaporeans?
And none of the elites could justify why the past reserves needed to be unlocked to fund JCS when the govt has not even utilised its current reserves. Our dear finance minister just sits there sheepishly showing his discomfort on the issues raised and doesn’t even bother to rebut.
And the amount of groupthink that has been displayed in Parliament is simply frightening. These people are so self delusional about JCS that none of them can see its demerits.
I really hope Singaporeans will wake up at the next election and see if these elites will be helped by JCS when they are booted out.
19) familyman on February 3rd, 2009 9.12 pm
Like Volunteers for TKL, I feel that there should also be Volunteers for LTK to tell the LTK story. what he has voiced up for the commoner to know in more detail.
hey, majority are Apathetic right? if you agree to this, u know there is a problem.
one guy told me, when I asked him for his views on a social issue, even on a sunday afternoon in a coffee shop, he told me, because of his work , he is not at liberty to comment.
I wonder who is such a big provider of rice bowls.
best
brinjor, the bigger the better.
The Pack Behaviours, displayed since the First Live Telecast of the Parliament Debate, has became more ferocious. The way they set upon opposition member made one felt liked viewing a Kalahari(in Africa where wild species roam and hunt in the wild) Documentary.
Wonder they are parliamentarians or just debaters out to score a point instead of meeting to seek solutions to problems the people and the country are facing?
patriot
It’s a crying shame that “Jobs Credit Scheme” is a misnomer. It’s nothing but “Employers’ Credit Scheme”!
The way the Papies went after LTK was as good as expected! Logic and sense of responsibilities to their residents meant nothing. Did now what LTK said made any sense to the Papies? However, the replies from LTK was oxsome! When the Speaker of the House made a fool of the “guy who read his CPF statement every month” over the “final final clarification”, I thought there may be hope yet for Singapore!
The ‘wagging of the dog’ cannot lasts forever. When people get hungry, they get angry. When people are asked to buy cash cards to top up their meter to have light in their house, they get angry. When people can’t pay mortgages and become homeless, they get angry. When they cannot provide for their sons and daughters, they get angry.The sense of being useless and hopeless from being retrenched brings much agony.
When they are hungry and homeless, and the ministerial elites mock them with “Jobs Credit Scheme”, they can simply give up or fight back!
The ministerial elites may not care two hoots if the unfortunates jump down from highrise flats or jump into MRT tracks to feel the impact of oncoming train. However, they definitely do not want to end up torched like Mr Seng Han Tong or have Singapore demonstrations like in Malaysia or Thailand.
I sincerely hope that they know that talk is cheap.
Mintsters reap what they sow. Being pompous and bragging of the 1st world standard of living in S’pore, they must now pay the price of ensuring that 1st world standard of contented, gainfully employed and well-fed Singaporeans is still the way of life for Singaporeans!
Unfortunately, The cost of living has been going up while the standard of living is going to the dumps!
Yes, if they cannot do what they are paid millions to do, I fear for Singapore!
feedmetothefish
there will be a back lash.
Josephine, Heng etc etc. They will be out soon.
27) patriot on February 4th, 2009 12.19 am
But the FACT is the People in this country,
consistently, over a period of 40 odd years DENIED any opposition more MPs into Parl.
We have to accept the cause and effect.
What to do? He is outnumbered, extremely outnumbered.
Lets move on?
Bear in mind the huge majority are Apathetic and this would take 2 generations at least to change.
Why worry? our people in the parl all very unbiased wan. They serve the people 1st right? That is why huge majority do not vote for opposition right? thinking there is no need for opposition right?
very unique in this world, past present and future.
http://www.iht.com/articles/2009/02/03/business/peseta.4-421789.php
Spanish unemployment jumps 47% in a year.
February 3, 2009
“The number of registered unemployed people in Spain swelled by nearly 200,000 in January, the fastest monthly increase in more than a decade, as companies struggling with declining sales and liquidity problems laid off workers or declared bankruptcy.
The Labor Ministry said Tuesday that the number of people out of work rose to 3.33 million, a 6.4 percent increase over December and a jump of 47 percent since January 2008. The ministry does not publish the unemployment rate, but the National Statistics Office said last week that the rate had risen to 13.9 percent at the end of December.
Spain, once the motor of job creation in Europe, was hit by a kind of perfect storm last year when the global credit crunch coincided with the end of a decade-long property boom, economists said Tuesday.
Now, Spain is suffering more than other European countries because it had created millions of low-skilled jobs and failed to use the good times to retool its rigid labor market, they said….”
Talks are cheap but when it comes to action, tjhe current govt is well known for setting a bad example, as always, among others.
And you wonder what happened to ‘lead by example’…
20) Anonymous on February 3rd, 2009 9.18 pm you’ve got it wrong
the jobs credit scheme wasn’t intended to save jobs per se
it was intended to encourage r e c o n s i d e r a t i o n of retrenchment by companies who are toying with the idea
================================================
Whether JCS is intended to save jobs or not, you need clarify with the minister.
‘reconsideration of retrenchment’ : sounds fair. But on close scrutiny, these word does not make Business Sense. The idea is good but am afraid business is based on Quantitative measurements (like P&L) and not Qualitative like ‘save
the world’. in rosey times, companies can afford to paint a picture that they are caring by donating to needy kids. But when times are bad, even CEOs are struggling not to get retrenched.
Business sense: if LACK DEMAND = no need to keep employee , else loss making. result : retrench.
Retrenchment is bad but nothing wrong in itself. else matta would catch them liao. Like the labor movement, I support retrenchment where necessary.
No one wants retrenchment. But when no Demand, companies cannot play charity org. its cold hard and bitter truth. We need to learn to handle the truth.
Now, our leaders need to come up solution to create Demand, in my personal opinion. Alas, this will be difficult due to reliance on Exports. I hate to rely on others. sharks man!
Govt deal with a lack of demand with supply-side policies.
It is like prescribing panadol to a mental patient.
But I pity Tharman, he has to take all the shits for his predecessor’s policies. And since he is not the Chairman of MAS, he has little say. So much for being the finance minister.