During the 2024 Budget statement, Deputy Prime Minister and Finance Minister Lawrence Wong touched on the issue of the involuntarily unemployed, a euphemism for those laid off.

A weird sensation washed over me.

Was I seeing the introduction of 'welfare' with Singaporean characteristics?

The temporary financial support scheme for the "involuntarily unemployed, while they undergo training or look for better-fitting jobs" really looked like it.

A training allowance for the unemployed? Sounds a little bit like a safety net.

And an even stronger trampoline.

TrainingFare

Welfare refers to the welfare state in several European countries, where the state provides for the economic and social well-being of its citizens, when they are unemployed.

Several European countries provide unemployment allowances and benefits to its citizens.

Some other countries usually tie unemployment benefits almost entirely to job-seeking, like the UK, and Singapore also does so.

But Singapore would now add a training component to theirs.

“... we will introduce a temporary financial support scheme for the involuntarily unemployed, while they undergo training or look for better-fitting jobs.”

Wong has said this nascent support scheme (which I have dubbed TrainingFare, WorkFare’s long lost sibling), is part of the other changes to SkillsFuture that he also announced in his Budget speech.

It strikes me as the government attempting to square the circle of its objection to unemployment benefits.

As Wong said:

“... avoid the pitfalls that other countries experienced when they introduced unemployment benefits.”

Short-term long-term goals

In the 1990s, former United Kingdom prime minister Tony Blair introduced us to his pledge to be:

“Tough on crime, and tough on the causes of crime.”

It never worked out quite as well as he hoped when his party won government in a landslide, but the phrase spoke to the urgent need to balance short- and long-term issues in policy.

Crime is felt immediately by society, and one way politicians seek to solve it in the short-term is by increasing policing, both in numbers and in vigour, an obvious and potentially effective solution.

But it comes with tremendous cost. The spending is unsustainable in the long run.

To address crime in the long run, the government needed a more fundamental approach that looked at crime’s societal components, such as economic hardship or lack of opportunity.

Solving the societal component was more desirable and cost-effective in the long run, but also more difficult, and not a guaranteed solution.

Crime in the UK is now just as bad as before Blair became PM.

Money

Wong's announcement of "TrainingFare" (I’m going to make it a thing) sounded to me a little bit like: "Tough on unemployment, and tough on the causes of unemployment."

Being tough on unemployment (not the unemployed) deals with the short-term effects of being laid off, and therefore Wong's "temporary financial support scheme" must mean money.

Maybe cash, maybe vouchers, maybe something else, but it'll be money in some form.

It’s a blunt, short term solution, but it'll work, for a while.

Too often the term “short-term solution” is used as a slur against a policy. But it’s only really a problem if you don’t have a long-term solution to go with it.

The long-term solution is the same as it ever was, namely to help the unemployed find gainful employment, but it looks like it will be more expansive about how to get to that point.

Wong himself said:

"Ideally, they should consider ways to upgrade their skills, and to find a job that fits their aptitude and talent.

Displaced workers may not have the time to train or search for new jobs, especially when they are already straining to make ends meet."

Finding work that matches our aptitudes and talents speaks of a more holistic approach to seeking new employment, which is nice, but without the short-term measure of financial support, it would be impossible for those with pressing immediate concerns to reach for.

Churn

As was noted in Wong's speech, the modern, global economy is changing.

“We know that technological changes will bring about more churn in the economy.

Even when the economy as a whole is doing well, some businesses or even some industries may be suffering.”

New geopolitical pressures and technological developments like artificial intelligence are probably going to revolutionise the industrial space, especially in industries previously thought immune to automation.

Artificial intelligence will probably not destroy the need for employees, but will change the type of employees needed and the skills they will need to master.

The involuntarily unemployed will be thrown into the toughest situation of all.

It's one thing to try to convince your employer to give you weeks or months off to go learn a new skill that might benefit the company in the long term.

But try telling your bank the same thing when it comes to your mortgage.

When I say the government is trying to be tough on the causes of unemployment, what I mean is that the government wants solve unemployment, but wants to turn it into an opportunity by introducing the training component to financial support.

Involuntary unemployers

But it also appears to turn the issue of involuntary unemployment into a personal one, albeit with government support.

An individual needs support, and needs training, but what about the employers?

Wong spoke about the efforts the government is making to ensure good jobs continue to flow into Singapore, but left unsaid was the role of employers and how they chose to “involuntarily unemploy” workers.

Just last month, Lazada “involuntarily unemployed” a reported 30 per cent of its staff, but did not notify either the Ministry of Manpower or the NTUC.

Ultimately, in order to be "tough on the causes of unemployment" (which is Blair's phrase and not Wong's), the employers need to be included in the discussion, especially when they act unilaterally.

MOM stepped in after the fact and worked out a settlement to the benefit of those retrenched, but concerns remain.

Singaporean characteristics

Support schemes for the unemployed have been previously proposed, such as the Workers' Party’s advocacy for up to six months of redundancy insurance.

It includes a fleshed-out policy paper published in November 2016, detailing their proposals.

Now we are seeing the government’s response coalesce into a more tangible form, moving beyond its position of getting people back into work as quickly as possible

In 2020, then-Coordinating Minister for Social Policies Tharman Shanmugaratnam was quoted by Today, speaking about unemployment benefits being considered if there was “high structural unemployment over time”.

He also spoke of those who were unemployed experiencing a decay in their skills, which lead to “employers disfavouring” them, leading to a spiralling problem.

Back then he was speaking in the context of the pandemic, but one imagines it would apply to other causes.

Previously, industries such as big tech are now engaging in significant amounts of layoffs, which was previously considered unthinkable.

I don’t know if we're in the early stages of a high structural unemployment environment, but heading it off early would seem to be the best approach, provided that resources are available.

The government will make the case that Singapore requires a unique solution, unlike that of other countries.

The "TrainingFare" scheme being proposed is its attempt at that.

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