“Redundancy Insurance will not Restore the Dignity of Singapore’s Labour”

Work is fundamental to the dignity of the person.

Yet, in today’s economic climate, ravaged by COVID-19, workers are finding it harder to keep their jobs than ever before. In Singapore, COVID-19 has led to 6,700 workers being laid off in the second quarter of 2020, up from 3,220 in the first quarter [1].

It is no surprise then, that the Workers Party (WP) has renewed calls to its proposed redundancy insurance [2]. It’s purpose is clear: it is an unemployment insurance scheme that provides protection against the risks of involuntary unemployment.

However, can WP’s redundancy insurance be the panacea for Singapore’s labour woes? I think not, for it fails to preserve the dignity of work.

An Expansion of Social Security

Firstly, it is important to situate WP’s redundancy insurance alongside other current social support measures. Four come to mind: Workfare Income Supplement (WIS), Progressive Wage Model (PWM), CPF LIFE, and Medishield.

WIS and PWM target wage stagnation among low income earners through tiered government top ups; CPF LIFE introduces social annuity insurance into a system relying mainly on individualised savings; Medishield addresses catastrophic illnesses. Redundancy insurance targets a shortfall of the current system: the risk of involuntary unemployment [3].

Involuntary unemployment causes several problems. Given the concerning statistic that 70% of working Singaporeans don’t have more than 6 months of individualised savings [4], the immediate loss of income from retrenchment could result in an inability to service a mortgage or pay for dependents’ children and material needs, the cutting back primary healthcare, and the adoption of a low-cost but unhealthy diet.

Consequently, retrenched workers choose to focus on maximising short term monetary compensation to resolve the immediate financial pressure, instead of taking a long-term view toward their career development by developing skills to adapt to industry disruptions. This limits the development of workers’ career choices.

Given this lacuna, the WP’s proposed redundancy insurance relieves the financial pressure and insecurity while the worker undergoes skills upgrading or their job search, by allowing a worker to receive a payout of 40% of their last drawn salary or of the median national income — whichever is lower — for up to six months. This is financed by a 0.1% monthly contribution of their salary, with claims automatically triggered when an employer files for the termination of an employee with the CPF board [5].

Such an idea is hardly radical. Singaporean academic Donald Low, in Hard Choices’ “New Options in Social Security”, echoes the imperative for such a proposal. Low contends that such an unemployment insurance programme can help workers transit between sectors, given greater global talent and wage competition, as well as rapid technological change [6].

American political philosopher Ronald Dworkin gives a more theoretical and market-driven justification for unemployment insurance in Sovereign Virtue. In it, he argues that unemployment insurance is sensible because it protects one not just from having less wealth than they might otherwise have, but against a dire situation that they could avoid had they contributed only a small sum to insurance each month, however unlikely the odds of unemployment [7]. Such a scheme works because it socialises the grave consequences of unemployment across society.

The Dignity of Work

Such proposals are laudable, and should be given proper consideration. However, redundancy insurance situates its concerns around economic anxieties, and not social ones. Consequently, as I shall show, redundancy insurance cannot preserve the dignity of work and denigrates one as inferior to those holding present employment, lowering their status to non-equals in society.

By preserving the dignity of work, I mean preserving the ability to contribute to society for the moral and civic good, so as to live life as an equal in civil society.

The present concern is as American philosopher Michael Sandel puts in his latest book, The Tyranny of Merit.  In it, he contends that “economic concerns like unemployment are not only about money […] they are also about how one’s role in the economy affects one’s standing in society” (206) [8].

In other words, unemployment is not merely an economic issue. It is also a social one. Alongside workers’ unemployment in the face of global talent competition and rapid technological change, is also the fear of a growing obsolescence. That is, they are afraid that their work and skills are no longer needed in society. Consequently, they cannot contribute to society as a dignified equal.

Even a well-intentioned redundancy insurance risks the reduction of retrenched workers in Singapore into mere economic digits, while missing the social implications of obsolescence. After all, the mechanism which decides the amount of payout in the redundancy insurance is a calculation of a person’s economic worth to society, should they have been gainfully employed. Unrecognised is the loss of dignity of no longer being able to provide both for family, and also to engage in work alongside others as equal citizens.

Singaporean Minister of Manpower, Josephine Teo may have recognised this imperative in 2017, when she stated that “even in tough times, Singaporeans want to feel the sense of dignity and pride that comes from standing on one’s own feet” [9].

Yet, the current solutions for involuntarily unemployed workers fall short of being dignifying.

Instead, they are encouraged to “upskill” by taking courses with government SkillsFuture mid-career grants. To qualify for higher subsidies, workers must display evidence of unemployment and joblessness for a certain period of time. Other COVID-19 specific welfare schemes include a support grant of $800 if its recipient can display either a loss of job or a 30% pay cut, and a workfare special payment of $3000 is dispensed to “low-wage” Singaporeans aged 35 and above if they apply for it [1o].

However, as American philosopher Elizabeth Anderson puts, by conditionalizing aid and other support schemes (including redundancy insurance) on a perceived obsolescence to society, workers are made to display evidence of personal inferiority for aid, reducing these workers to grovelling for support from the state [11]. Meanwhile, these able workers are deprived of the dignity of a real job, they engage in “upskilling” to qualify for support payments hope that these skills lead them into another job.

An Alternative

How then can all work be dignified?

I contend that the expansion of the Jobs Support Scheme (JSS), beyond just pandemic support, can restore and affirm the importance and value of jobs.

The Jobs Support Scheme (JSS) was launched earlier this year to help stem job losses during the pandemic by partially covering the gross monthly wages through government payouts to companies. The coverage ranges from 25% to 75% of gross monthly wages paid to each local employee as long as they have not retrenched any worker [12].

This too has been the approach in Denmark and the Netherlands.

In effect, the JSS works like a wage subsidy for workers from the government. Rather than deduct from a worker’s earnings, the government contributes a certain amount to enable workers to make their own living by keeping their jobs. Crucially, the implementation of JSS meant that some workers kept their jobs and thus, maintained their dignity.

Currently, the JSS is paid out of Singapore’s reserves as a special pandemic support scheme.

However, I contend that a more ambitious proposal could introduce the use of JSS as a permanent social security fixture that is funded by tax revenues, just as WIS currently is. I imagine a regulatory framework or committee will determine which sectors are most at risk of obsolescence and provide a tiered amount of payments to companies if they keep their workers.

In this way, workers are not deprived of the dignity that comes with work, and are also fairly recompensed. Only with such dignity and the ability to earn a decent living restored, can mandated upskilling and professional conversion programmes to fit a changing economy be done in good faith.

To be clear, this is not to encourage protectionism of all obsolete jobs. Ultimately, obsolete industries will be decimated by the market regardless of state support. But, if planned correctly, the ideal is such that when the job finally turns obsolete, the worker will have already moved to a newer job sector, due to the skills upgrading already completed while working at a previous job

Even so, we must not lose sight of the fact that seemingly obsolete jobs are sometimes still currently valuable, and that we should not write them off so hastily. Supposedly repetitive tasks done by supermarket staff or cleaners can be automated and would ordinarily be considered obsolete. Yet, such workers were the very bedrock of resilience during COVID-19. This is evidence that such workers play an invaluable role to the common good and that immediate retrenching and upskilling is not always the most ideal option.

Admittedly, this solution will require a mindset shift — from one that focuses on maximising GDP and the economic productivity of workers, to one that tries to create a labour market that is conducive to work and social cohesion.

However, I argue that the imperative for this shift has never been greater. As we transition into a post-pandemic world, where employment is unstable and the dignity of work at risk, our mindset should no longer be growth-at-all-costs, but growth that makes sure no one’s dignity gets left behind.

An expanded JSS, and not a redundancy insurance, will be one of these ways to truly affirm that work is indeed fundamental to the dignity of the person, and of Singapore’s labour.

(1527 words)

References:
[1] Ministry of Manpower, “Summary Table: Employment” https://stats.mom.gov.sg/Pages/Employment-Summary-Table.aspx Accessed 10 November 2020.

[2] Rei Kurohi, “Singapore GE2020: Key proposals in Workers’ Party manifesto” https://www.straitstimes.com/politics/key-proposals-in-workers-party-manifesto. Accessed 10 November 2020.

[3]The Workers’ Party, Singapore, “Redundancy Insurance: The Workers’ Party’s proposal for a resilient 21st century workforce”. https://wpsg.s3-ap-southeast-1.amazonaws.com/perspectives/WP-Redundancy-Insurance-FINAL-30112016.pdf Accessed 10 November 2020.

[4]Aw Cheng Wei, “2 in 3 working Singaporeans do not have savings to last them beyond 6 months: OCBCsurvey”https://www.straitstimes.com/business/banking/2-in-3-working-singaporeans-do-not-have-savings-to-last-them-beyond-6-months-ocbc. Accessed 9 November 2020.

[5]The Workers Party, Singapore, “Redundancy Insurance: The Workers’ Party’s proposal for a resilient 21st century workforce”. https://wpsg.s3-ap-southeast-1.amazonaws.com/perspectives/WP-Redundancy-Insurance-FINAL-30112016.pdf Accessed 10 November 2020.

[6]Low, Donald. Hard Choices: Challenging the Singapore Consensus, by Donald Low et al., NUS Press, 2014, pp.122–123

[7] “Justice, Insurance, and Luck.” Sovereign Virtue: the Theory and Practice of Equality, by Ronald M. Dworkin, Harvard University Press, 2002, pp. 320–350. p331

[8] Sandel, Michael J. The Tyranny of Merit: What’s Become of the Common Good? Allen Lane, 2020. pp. 214–215

[9] Ministry of Manpower, “Speech in Response to Motion for Adjournment on Redundancy Insurance in Parliament at Parliament”. https://www.mom.gov.sg/newsroom/speeches/2017/0508-speech-by-2nd-minister-mrs-josephine-teo-in-response-to-motion-for-adjournment-on-redundancy-insurance-in-parliament. Accessed 11 November 2020

[10]Ministry of Social and Family Development, “Support For Singaporeans Affected By COVID-19”. https://www.msf.gov.sg/assistance/Pages/covid19relief.aspx#CSG. Accessed 11 November 2020

[11] Anderson, Elizabeth S. “What Is the Point of Equality?” Ethics, vol. 109, no. 2, 1999, pp. 287–337., doi:10.1086/233897. p.305

[12] Inland Revenue Authority of Singapore, “Job Support Scheme”. https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Support-Scheme–JSS-/. Accessed 11 November 2020

 

 

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At Yale-NUS College, we are thinking about ideals of equality and democracy, and how they relate to practice, in Singapore and in the wider world.

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Articles were originally submitted as course papers for Professor Sandra Field’s classes Contemporary Egalitarianism and Democratic Theory.

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