Prime Minister Lee Hsien Loong said on Monday that unemployment is expected to creep up further in 2017, as Singapore's workforce ages and older workers who lose their jobs would take longer to find new ones.
Speaking at the annual May Day Rally at Our Tampines Hub, Lee said he is "cautiously optimistic" about Singapore's economy and sees growth likely to pick up from last year. He added that he expects a "steady trickle" of redundancies as some workers will be displaced while the restructuring of companies.
Last year, Singapore's economy expanded by 2 per cent, slightly up from 2015's 1.9 per cent, which was the country's weakest annual growth rate since 2009. The unemployment rate climbed to 2.3 per cent in the first quarter of this year.
Lee said that Singapore's unemployment rate is still low in comparison to other developed countries. There are countries where they are typically much higher – at least 5 per cent, and sometimes, 10 per cent.
"We have to understand this trend, but at the same time we have to work hard to resist it, and to keep our workers in jobs," Lee told Channel NewsAsia.
The prime minister gave an example of PSA that retained its workers when the port shifted to Pasir Panjang and used better technology. The workers were retrained, and quite a few took on new roles.
Lee said the government will bring in new businesses and investments, and upgrade existing companies, a "winning formula for 50 years" in order to create new employment opportunities.
"If we don't have the new companies, if we don't have a business-friendly environment where people want to come, there will be no new jobs," he said, adding that the Economic Development Board has been working hard to get MNCs to invest in Singapore.
The government will also help local small- and medium-size enterprises (SMEs), both traditional and high-tech, to upgrade themselves, go overseas, expand and build new capabilities.
He added that the government is also helping those people, who have lost their jobs to find alternative jobs, especially professionals, managers, executives and technicians (PMETs).
According to reports, the Singapore Industrial and Services Employees' Union, Institute of Engineers in Singapore and the Shipbuilding and Marine Engineering Employees' Union are working together to improve the situation. They are trying to organise job fairs to help offshore and marine workers find new jobs in aerospace and transport engineering.
"It is a bold move for workers to go and do that. You have to go outside your comfort zone, but if you make the effort, you train, you can do it. Some have already done it," Lee said.
