PM Lee Hsien Loong at May Day Rally 2017

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Sister Mary Liew, President of NTUC; Brother Chun Sing, Secretary-General, brothers and sisters, a very Happy May Day to all of you!

This year, we celebrate May Day in Our Tampines Hub – a new place, a good place, and a place where we can feel optimistic. Cautiously optimistic, but in a better mood than last year.

Things are looking up in the world economy. The IMF is feeling optimistic. It expects global growth for the whole world this year to be higher, maybe 3.5 per cent. In America, confidence in the economy has picked up with President Trump. China and Japan are also looking up. World trade is growing again.

Things are looking better, but there are also some risks which we should be aware of. The US is talking tough on trade. Previously, they took a multilateral, open, and win-win attitude. They believed that if the world prospered, the US will do well too. Now, the US is focussing on bilateral trade balances – targeting countries one by one, not cooperating in a big group multilaterally, but dealing one on one. Viewing trade as win-lose – if you win, that means I must have lost something. If the US has a trade surplus with another country, that is as things should be. But if the US has a trade deficit with another country, then that other country must be playing unfair.  With China, America has a huge deficit. The Americans say, “We must deal with this problem. But we want to deal with this problem by selling more to China, not by buying less from China.” President Trump has raised this personally with President Xi Jinping.

You are unionists, and you will know what this is about. It is a negotiation. In a negotiation, you strike a pose, and bargain for the best outcome. If you talk tough and win a better deal, that is good. But if you talk too tough and as a result, you sour the trust, relationship and cooperation, then that is a lose-lose outcome. 

For now, other countries want to stay open to trade. World leaders are saying the right things, whether the Chinese, whether it is Mr Abe in Japan, whether it is Angela Merkel in Germany, they are saying the right things – they continue to support free trade, open economies, and so on. But if this harder American line leads to a tit-for-tat fight, then things can turn sour very quickly.

Between the US and Singapore, the US has a big trade surplus with Singapore. Therefore, our relations with the US are fine. Because we do not look at it as win-lose, we look at it as win-win. Our ties with the US have remained very friendly. In fact, I just had a good phone call with President Trump last night. He invited me to go to Washington. I have agreed, and I hope to do it sometime this year. We continue to be very good friends with the US. But because our economy is so dependent on trade, if a trade war breaks out, even if we are not directly involved, it is going to hurt our economy, and we have to be prepared for this.

But meanwhile, with global growth looking up, I am cautiously optimistic about the Singapore economy this year. Last year, we grew 2 per cent, better than expected. What is even more encouraging is that our productivity was improving. Last year, we got 1 per cent productivity growth, much better than 2013, 2014, 2015 when productivity was almost zero. What does that mean? That means that with productivity, the economy can continue to grow, even though our workforce is not expanding, even though we do not have more workers. We can produce more, we can be more prosperous, and our workers can earn more. The challenge is to keep this up – to continue innovating and raising productivity not just one year at a time but for many more years to come. Some sectors are already doing that; other sectors not yet.

For this year, officially, the growth forecast is between 1 and 3 per cent. I think there is a good chance that the growth this year will exceed last year’s 2 per cent. It is uneven still; not every sector is doing well. Some sectors, like retail, are still struggling a bit. But overall, we are improving.

Restructuring is a continuing process – and it is a not painless one. Last year, redundancies went up. This year, even with better growth, we expect a steady trickle of redundancies. It is inevitable because companies have to continue to restructure, and as they do so, some workers will be displaced. That is why our unemployment rate has crept up a little bit, and reached 2.3 per cent. 2.3 per cent is a bit high for us, but it is much lower than unemployment rate in all the other developed countries. In the other developed countries, typically, unemployment rate is between 5 to 10 per cent, much higher. If you look forward and ask me what I expect, I would say, honestly, our unemployment rate will gradually tend to creep up. We are feeling the same pressures as the other developed countries. The industries have to continue restructuring, our workforce is getting older, and older workers who lose jobs tend to take longer to find new jobs and to get back into the workforce. If you put all these together, the tendency will be that our unemployment rate will gradually go up. We have got to understand this trend, but at the same time we have to work hard to resist it, to keep our workers in jobs. 

But how are workers actually feeling on the ground? Every year, before May Day, I invite union leaders and U Associates to have lunch, to get a sense of how things are going in the different parts of the economy. This year, after talking to them, I decided that what they said deserved to be heard by more people. So I interviewed some of them and posted the video on Facebook. For a change, instead of answering questions, I could sit there and ask people questions. Most of the unionists were quite upbeat, although they were not sure how long this momentum would last.

Last year, the mood was gloomier. I still remember last year, Sister Jessie Yeo from the Port Workers Union, telling me that there was one working day when two out of three shifts, there were no ships at all at Tanjong Pagar terminal! All the giraffes, the quay cranes, their necks were up, almost the whole day! So this year, when I met Jessie and Brother Arasu, I asked them how things were doing in the port. Jessie said things were looking a lot brighter, the port is handling more volume and she expects things to be busy for the rest of this year. 

I said, “But when I drive past the Tanjong Pagar terminals, it looks like this, all the cranes are up.” She says, “Yes, that is true but do not worry. This is because we are moving from Tanjong Pagar terminal, consolidating and shifting to Pasir Panjang”. Pasir Panjang has more capacity, it is more efficient, it is high tech and they can do more things in Pasir Panjang. For example, they are testing AGVs, Automated Guided Vehicles, which move around in the container yard by themselves.There is no driver’s cabin, no driver, and it collect containers. They get into place, the crane picks up the container from the ship, lowers it carefully onto the AGV and off it goes. And again, faster and faster and faster. Not quite so fast yet but one day, we will get there.  

Most importantly for the workers, when they shifted to Pasir Panjang, all jobs were kept, no jobs were lost. Workers were retrained, quite a few had to take on new roles in Pasir Panjang, but they trained, they took on the new roles, and they did it. So I asked, “How are the workers feeling?” 

She said, “Last year, workers were worried there was nothing to do. This year, workers worried that there is too much to do.” But what about beyond this year? They said realistically, they are not quite certain because there is competition. There is Tanjung Pelapas, there is Port Klang, Malacca is building a new port, and you also have to worry about competition from further away, like Yangshan in Shanghai.  The other ports are also automating, so PSA and their workers have to continue to raise their productivity. But they have a plan and the long-term plan is to build a mega port in Tuas and consolidate everything in Tuas, starting 2021 which is just four years from now. Tuas will be even more advanced, even more efficient, and even more competitive. 

But moving there is going to be a complicated business. The workers will have to adjust. So Sister Jessie and Brother Arasu asked me, “Can the government help us, for example, build an MRT line to get there faster?” I said I will try my best but we will make sure we solve the problems and make sure that Tuas Port is a success because that is critical, not just for PSA but for Singapore. 

The PSA workers, unions and the management have the right attitude. Never take things for granted, be alive to the competition, prepare well in advance and stay ahead. They have been through many ups and downs together, the management and the unions in PSA over the decades. Because they have stayed together, we still keep our position as the top maritime capital in the world. We stay there but we know that we are not automatically floating down there, you have to work hard to be there. There are always competitors looming, somebody is always trying to steal your lunch and we have to guard our lunch, and if there is any other lunch out there which nobody is “chope-ing”, there is an opportunity for us. 

So long as our unions and management maintain this drive, and work closely with one another and with the government, Singapore can stay in the game. I talked about the port because you know about it and because the port is important to us, but also because what the port is doing, all the other industries in Singapore also can do and should do. 

Today, I would like to explain some of what we are doing to continue to prosper. It comes down to three things – jobs, jobs and jobs. Three different ways of thinking about jobs. One, creating new jobs by bringing in new businesses and investments, and expanding existing businesses. Two, finding replacement jobs for workers who have lost their jobs or are out of work, and need work. Thirdly, jobs for future workers. Training students andtraining workers to grow in their jobs. To do something different, bigger, and more productive in the future.

First of all, we are helping businesses to create new jobs, which means new companies, new investments, upgrading and expansion of existing companies. That has been our winning formula for 50 years because if we do not have the new companies, if we do not have a business friendly environment where people want to come, there will be no new jobs.

EDB has been working hard at this, to get MNCs to come in to Singapore. I just give you a sample of the projects this last year. In Electronics, Micron invested more than $5 billion to expand its fab in Woodlands, creating 500 jobs.

In IT, Google opened a campus in Mapletree Business City. 1,000 Googlers there – 1,000 people working, and important for our IT sector. But Google is also training 1,000 SME business leaders on how SMEs can go digital, so helping to transform the economy.

In chemicals, it is a mixed picture. Some plants consolidating but others expanding, investing and we are still getting new projects.

For example, Evonik broke ground for a second plant in Jurong Island. They produce raw material for animal feed. $800 million investment, 150 jobs. Every job we create, it is a few million dollars of investments, people must put the capital in, build the machinery, the equipment, provide the training, then only we can be productive, then only we can have good jobs. That is what EDB and the government have been doing.

At the same time, we have been helping SMEs upgrade themselves, go overseas, expand and get new capabilities. Not just high tech companies, but also the traditional ones who can reinvent themselves and do new things. One National Day Rally a few years ago, I talked about Bak Kwa in Ginza and how we helped the Singapore Bak Kwa makers navigate the Japanese bureaucracy and their rules, so that we can import the materials, make the Bak Kwa in Japan and sell Bak Kwa in Ginza, which turned out to be very popular with the Japanese.

Today, let me tell you about another Singapore company, it is called Grandluxe. It started 75 years ago, in 1942, as a book-binding workshop along Mohamad Sultan Road. You may not know what book binding is about but in the old days we used to produce reports, papers; they come in little bits, we accumulate them then we bind them together into volumes. Like Parliamentary Reports, Hansards, they come each session one little pamphlet, and then you bind them together to become neat volumes.If you go to the library you can see them. This is work by companies like Grandluxe. Sometimes hard bound, sometimes even leather bound, and all done by hand.

Grandluxe did well, expanded into the printing business, they set up a factory in Jurong, and they printed stationery and notebooks. But slowly, the world changed. Today, reports do not come in little pamphlets anymore. They come, one link in your email. You want to see them, you click, the PDF file comes. You want to see one from 10 years ago, you search the Parliament’s website, and you can find it. 50 years ago, also down there. There is nothing to bind together. You cannot take all these links and put a volume around them. Even diaries and notebooks, you carry a smartphone. You put everything down there. You note it down, you share it on WhatsApp. You do not buy diaries anymore. 

So Grandluxe’s old business was shrinking. They decided to reinvent themselves and change their business model. They turned bookbinding into a premium craft. They started a new company, they gave it a new name, Bynd Artisan. Not just a printing and binding factory, but now it is a retail experience. The customer goes to the shop, you pick the materials, you want beautiful paper, you want a pretty cover, you want special lettering, you pick, choose and decide, and then the skilled bookbinders will personalise a beautiful leather bound notebook and thing for you. Maybe for yourself, maybe for your wife or husband or girlfriend. You can watch them at work and admire their skills. Now, the company is doing well and selling to the world. This has given long-time employees like Ms Tan Buay Heng a new lease of life. Ms Tan worked with the company for 40 years. She started as a production operator, binding books. Now she has become a craftsman; she is personalising leather notebooks for customers, conducting workshops and training younger ones. She is also managing a retail branch. Even as a mature worker you can still learn, you can still change.

What Bynd Artisan did, SPRING and IE Singapore are helping many other SMEs to do. Not every SME can become a retail, boutique book binder, but many can reinvent themselves and find new niches in which they can grow. Ms Tan Buay Heng’s story – from a production operator to become a retail branch manager – can become the story of many other workers.

So firstly we need to create new jobs, but secondly, we also need to help workers who lose jobs find alternative jobs, especially the PMETs. Because the businesses have to restructure to survive, and technology is disrupting everything. So redundancies will continue even as our economy grows. We are particularly concerned about sectors which are not doing so well. We have expanded several schemes under Adapt and Grow – we have got the Professional Conversion Programme (PCP), we have go the Career Support Programme for PMETs, and we have got enhanced work trial support for the rank-and-file. So many programmes, so many names, it is a whole alphabet soup. Brother Swee Say is trying all sorts of things and different approaches and many of them will work.

Let me illustrate with some actual examples, told to me by the union leaders and the U Associates.

Brother Mah Cheong Fatt is from the offshores and marine industry, he is the Executive Secretary of the SMEEU – Shipbuilding and Marine Engineering Employees' Union. The industry is experiencing tough times now. Three years ago it was doing well, oil prices was $100. I visited them at Keppel, they were so happy, they told me that order books were full for the next five years, and workers were getting bonuses, 12 months, sometimes even more.

Unfortunately for the industry, the price of oil fell sharply, now it is about $50. So oil exploration, oil production has slowed down. Drilling has stopped, there is overcapacity. The orders for the drilling rigs have been either postponed or cancelled. For the last two years, there had been no new orders. The yards have to let people go. Since the last peak, the shipyards – Offshore & Marine – have lost about 30,000 workers. 30,000 workers! If they were Singaporeans, we would have a big problem. But most of them were foreign workers, so our own workers did not bear the brunt of the redundancies. But some of our workers, Singaporeans, were also displaced. Last year, about 1,000 were retrenched. This year, we expect a few hundred more. The foreign workers, they can go back to their home countries. But Singapore workers, this is home, these are our brothers and sisters.  What do we do for them? 

Our first priority is to help them find another job. With the O&M industry as it is, it is very difficult to find a replacement jobs in another shipyard. But there are other industries which are doing well, which require the skills which the engineers and technicians from the shipyards have, like transport, like aviation. If we can marry them up, take the technicians and engineers from O&M, link them up and train them, adapt to work in transport or in aviation, I think it is a win-win.

That is in fact what we are doing. Sister Sylvia Choo, who is the Executive Secretary of SISEU (Singapore Industrial & Services Employees’ Union) is working on this because SISEU includes the aviation and aerospace industry, and Brother Edwin Khew, who is with the Institute of Engineers of Singapore – he is the president of the institute – they are working with Brother Mah Cheong Fatt to organise job fairs to help workers from offshore and marine find new jobs in aerospace and in transport. It is a bold move for workers to go and do that, it is not so easy. You have to go outside your comfort zone, but if you make the effort, you train, you can do it, and some have already done it.

This is not just about schemes and programmes, but also about walking with workers every step of the way. As Brother Chun Sing said just now, LM (Labour Movement) is with you. We organise job fairs, we set up stalls and give out pamphlets. But we go beyond that. Brother Desmond Choo told me about a recent job fair which he organised here, in Our Tampines Hub. It was very successful, 750 people came and they matched up maybe 200. We hope from that we will have a good proportion of new jobs. At the fair, he noticed one person walking around the stalls for some time, looking lost. He went around once and he did not stop anywhere. He went around second time, he did not stop anywhere. He went three rounds and did not stop anywhere. So Desmond went up to him and asked, “What is the matter? You did not stopped anywhere.” The man said he was lost, he had the pamphlet, and he saw the stalls, but he did not know which job would fit him. Desmond counselled him, found out he was a shipyard material handler and matched him with a laundry operator. What Desmond did for this worker is what we want to do with every displaced worker. Each one is an individual, a brother or sister, not a statistic. Each one needs to make the effort but each one, we will hold his or her hand and help them make that change and get into a new job. That is why the labour movement is as what the Secretary- General says “an unusual labour movement”. It takes care of those who have jobs and helps them to keep their jobs.

I am confident that we can overcome the challenges and emerge stronger. Each one of us, with one another for one another, for Singapore

PM Lee

For those who have lost their jobs, NTUC helps them to get replacement jobs. For those who are still in school, NTUC works with the government and with the businesses to keep this economy going so that there will be jobs for the people when they come out from school. Unions elsewhere do not think about those who are jobless, and especially the young who have yet to enter the job market. Because their members are the ones who are working and they protect the ones who are working, sometimes at the interest of those who are not working. In many countries, after the financial crisis, youth unemployment went up and have stayed up. It is very high, it is a very serious social problem. Even those who are working are often underemployed. You see it in Europe, Spain, Italy and Southern European countries. You see it even in France. In Asia, we see it in South Korea and in Taiwan. Many institutions, lots of people going to universities, but graduates cannot find work, they are hanging around, and underemployed. They are very unhappy and it is a social problem.

But in Singapore our youth unemployment rate is low. Once you graduate, whether from ITE, polytechnics or universities, you can find a job within not a very long time. It did not happen by accident. It happened because we make sure our schools prepare our young people properly for the job market. They emphasise on-the-job training and they work with employers to tailor the curriculum to what the market and employers need. They work out internship programmes so that we prepare the workers even before they graduate.

NTUC is also engaging new graduates to point them onto the right path. It has set up the NTUC Youth Career Network to mentor youth by offering career guidance and preparing them for job applications. In fact, there is a NTUC-PA Youth Career Network Skills Marketplace going on downstairs which I hope you will visit after the Rally. The Network is not only doing good work but the good thing is, it has attracted many passionate volunteers.  I met one of them who came for lunch, Sister Zuhaina. She has been coaching mentees, polishing up their CVs, preparing them for interviews, giving them confidence to pursue their interests, enabling them to get into a job if they have any difficulty. Get started and established themselves. I thank volunteers like Zuhaina because she embodies the spirit of helping others to succeed. Similarly, we are creating opportunities for all our workers, young and not-so-young, so whatever age you are, do not stop trying! But please be open and flexible when looking for new jobs. Be willing to try something new, not just new jobs with new employers, but also new careers in different industries. Take up courses, reskill and if you get a job offer, consider it carefully.  It will not be an easy process but the LM is with you.

We also need employers to come on board. Do not just recruit new graduates, give mature workers a second chance. Older workers bring with them maturity and experience. Grey hair is quite good! The Public Sector is leading by example. We are expanding our Adapt and Grow scheme, our agencies have been hiring mid-career PMETs, including mature workers. You will see them in Land Transport Authority (LTA), Ministry of Education (MOE), Ministry of Health (MOH) and many other Ministries. We have launched several Professional Conversion Programmes to convert mid-career workers to bring them in, to be able to hire them and we will do more. I urge employers to work with us. Unions are doing their part; so must you. Ministry of Manpower (MOM) can develop Professional Conversion Programmes for entry and mid-level jobs. We will support employers with reskilling programmes. The Government will actually pay a good portion of the wages of the workers during the trial period when you take him or her on, and try to fit him or her into your outfit. We helped to pay the wages. So give it a try. If the tripartite partners work together, we will transform together, adapt together and grow together. That is the second point, we find replacement jobs for workers who are displaced.

The third point is to upgrade all workers, supporting them in their existing jobs. We have got to take worker upgrading very seriously. In other countries, workers know that they need to work hard to keep their jobs. They are hungry. We are hungry, we are working and they are working hard too. You heard Secretary-General just now talking about the learning journey which some of the union leaders went to in Chengdu. I met two of the people who went there – Brothers Hock Poh and Arasu – in fact three of them, and Sister Jessie as well. They discovered how hungry the Chinese workers were when they went to Chengdu to visit the smart factories. I asked them to show me a picture of the smart factories they said, “Sorry not allowed to take photos”. So this is what you can see. But what they saw, they are not allowed to show you but I will tell you what they saw. 

They saw highly automated plants, not sweat shops, not lots and lots of workers slaving over machines, but one worker in a big factory, with 20 machines. He is not operating it. He is supervising it, troubleshooting it, and monitoring it. It is big data, industry 4.0. IT, organisation, management, skills and discipline. That left a deep impression on them. The Chinese workers, I said, “What are they like, are they well educated?” No, not all. But they work hard and they train hard. They build a dorm for 11,000 of them, all the facilities are there. The workers live in the dorms. At night, they go onto their account, they log on, they take e-learning modules. I am reminded of the Korean workers who used to come to work here to build structures, one generation ago. Those of you old enough will remember. Ssangyong, Samsung, they used to bring Korean workers. The Korean workers work here, at night they live in the dorm, nothing to do, they go and pump iron to get strong to work the next day. That is how Koreans got strong. Now, they do not do it anymore but at that phase they did.

The Chinese are now at that phase of development, and their workers are hungry. We may not be at that stage of development but unless we are as hungry as them and as determined as them to upgrade ourselves, and willing to put in as great an effort, I think our cheese will be stolen. We have to make that effort, we have to strive and we have to keep our position. That is why we have been working hard on SkillsFuture. The good news is, we have a head start. The IMF has been monitoring these programmes all over the world and their report is that SkillsFuture is one of the most comprehensive such programmes they have seen. So we have got a pat on the head, not bad but actually, we know we are just starting out and there is a long way to go.

Last year, I went to SIT and met the students, had a dialogue with them. I met several of the mature students who have been upgrading themselves. One of them was Adelene Teck. She worked as an occupational therapist for 20 years, decided she wanted to upgrade herself, she went back to school and enrolled in SIT. She was a mature student and she told me the other classmates are like her children. They are, in fact, her children’s age. So I asked SIT, how is she doing now? I am very happy to tell you that Adelene is about to finish her year-long programme, and now looking forward to going back to work to apply her skills. That is what we all need to do. We are never too old to learn. 

These are our plans to transform our economy and grow our jobs. At the centre of this effort are our industry transformation maps, the ITMs, which Secretary-General talked about. They were a major recommendation of the CFE, of the Committee on the Future Economy. The ITMs mean we are going industry by industry, working out what specific things we need to do in that industry to upgrade it, to adapt it, to make it competitive, and putting it altogether into a plan for that industry to make that industry upgrade. Through the ITMs, we can stay competitive and create the jobs.

The logistics industry is one of the ITMs we have just launched. It is a big contributor to our economy and with transport, it employs a quarter million workers. There are good prospects because you can use technology, you can use robotics, and you can use data analytics. I am very happy that NTUC is also a little bit in this business through NTUC Fairprice. Fairprice has a new distribution centre in Joo Koon, equipped with an Automated Storage and Caddy Pick System. The robots move around, carrying the pallets. It is delivered, it goes to the bay, and it is wrapped up automatically. This one still needs a human being, and it goes out of the warehouse to your NTUC Fairprice store somewhere near you. 

There are many opportunities for doing this. We are in the right place in Southeast Asia for logistics. Other logistics companies are also expanding. We hope there will be 2,000 PMET jobs created in the next 5 years. So there is a plan, there are the resources, and we will make it work. That means everybody has to play their part. Employers, to invest in technology and train up workers. Unions, to work with employers, identify where the new jobs will be and help the workers get the new skills. The Government, to support the companies to adopt the new technology. The workers to get the new training. This is tripartism in action. For logistics, there is an ITM. But actually we have 23 industry transformation maps, for all the different sectors of the economy, covering 80 per cent of the economy.

We have got to make this happen. Last year, we set up a tripartite council – the Council for Skills Innovation and Productivity. It was chaired by Brother Tharman, who was leading the SkillsFuture effort. Since then, the CFE have completed their report. The CFE was chaired by Brother Swee Keat and when he was ill, Brother Iswaran co-chaired it for him. The CFE has come up with a comprehensive plan to take our economy the next step forward. Now we need to implement the CFE’s recommendations to make the transformation happen. I have asked Brother Swee Keat to take over from Brother Tharman as Chairman of the Council. We will rename it the Future Economy Council, and the Council will also have the other ministers – Brothers Iswaran, Chun Sing, Ye Kung, Lawrence – as well as other minister and MOSes, especially the younger ones. Swee Keat will work with them, to implement the CFE recommendations, to make sure the ITMs work, are implemented and make a difference.

I am putting them in charge of this strategic effort. It is a deep transformation. It will take time, it will extend beyond this term of government. It is an opportunity for the younger ministers to work closely together as a team, strengthen their bonds with employers and unions, and with each other, and show Singaporeans what they can do. It is their generation of leadership who will have to work with Singaporeans to take the country to new heights.

Our unique tripartite partnership is the secret why we have been able to transform the economy over and over again. Starting from the nation building years when we began to industrialise, through the British withdrawal from the bases here in 1971 when we faced the prospect of tens of thousands of job losses. Through the first major recession in 1985 when we had to cut CPF drastically in order to reduce costs and become competitive again. Through the Asian Financial Crisis, SARs, the Global Financial Crisis, many crises but each time, although the challenges seem daunting, we pulled together, adjusted course, made sacrifices, helped each other and came out ahead, stronger. I have no doubt we will face further challenges ahead, even serious ones. But if we strengthen the tripartite system, and remain united, if the labour movement remains strong, takes care of our workers and makes them co-owners of our system. If all our segments of society, workers as well as employers, managers and professionals as well as foremen and rank and file, sacrifice equally when sacrifice is called for, and share in the fruits of success when things go well. Then I am confident that we can overcome the challenges and emerge stronger. Each one of us, with one another for one another, for Singapore. That is the way we make sure that every May Day we will have good reason to celebrate. That is the way we can make good things happen and create a bright future for our children. 

Thank you very much and Happy May Day! 

Sister Mary Liew, President of NTUC; Brother Chun Sing, Secretary-General, brothers and sisters, a very Happy May Day to all of you!

This year, we celebrate May Day in Our Tampines Hub – a new place, a good place, and a place where we can feel optimistic. Cautiously optimistic, but in a better mood than last year.

Things are looking up in the world economy. The IMF is feeling optimistic. It expects global growth for the whole world this year to be higher, maybe 3.5 per cent. In America, confidence in the economy has picked up with President Trump. China and Japan are also looking up. World trade is growing again.

Things are looking better, but there are also some risks which we should be aware of. The US is talking tough on trade. Previously, they took a multilateral, open, and win-win attitude. They believed that if the world prospered, the US will do well too. Now, the US is focussing on bilateral trade balances – targeting countries one by one, not cooperating in a big group multilaterally, but dealing one on one. Viewing trade as win-lose – if you win, that means I must have lost something. If the US has a trade surplus with another country, that is as things should be. But if the US has a trade deficit with another country, then that other country must be playing unfair.  With China, America has a huge deficit. The Americans say, “We must deal with this problem. But we want to deal with this problem by selling more to China, not by buying less from China.” President Trump has raised this personally with President Xi Jinping.

You are unionists, and you will know what this is about. It is a negotiation. In a negotiation, you strike a pose, and bargain for the best outcome. If you talk tough and win a better deal, that is good. But if you talk too tough and as a result, you sour the trust, relationship and cooperation, then that is a lose-lose outcome. 

For now, other countries want to stay open to trade. World leaders are saying the right things, whether the Chinese, whether it is Mr Abe in Japan, whether it is Angela Merkel in Germany, they are saying the right things – they continue to support free trade, open economies, and so on. But if this harder American line leads to a tit-for-tat fight, then things can turn sour very quickly.

Between the US and Singapore, the US has a big trade surplus with Singapore. Therefore, our relations with the US are fine. Because we do not look at it as win-lose, we look at it as win-win. Our ties with the US have remained very friendly. In fact, I just had a good phone call with President Trump last night. He invited me to go to Washington. I have agreed, and I hope to do it sometime this year. We continue to be very good friends with the US. But because our economy is so dependent on trade, if a trade war breaks out, even if we are not directly involved, it is going to hurt our economy, and we have to be prepared for this.

But meanwhile, with global growth looking up, I am cautiously optimistic about the Singapore economy this year. Last year, we grew 2 per cent, better than expected. What is even more encouraging is that our productivity was improving. Last year, we got 1 per cent productivity growth, much better than 2013, 2014, 2015 when productivity was almost zero. What does that mean? That means that with productivity, the economy can continue to grow, even though our workforce is not expanding, even though we do not have more workers. We can produce more, we can be more prosperous, and our workers can earn more. The challenge is to keep this up – to continue innovating and raising productivity not just one year at a time but for many more years to come. Some sectors are already doing that; other sectors not yet.

For this year, officially, the growth forecast is between 1 and 3 per cent. I think there is a good chance that the growth this year will exceed last year’s 2 per cent. It is uneven still; not every sector is doing well. Some sectors, like retail, are still struggling a bit. But overall, we are improving.

Restructuring is a continuing process – and it is a not painless one. Last year, redundancies went up. This year, even with better growth, we expect a steady trickle of redundancies. It is inevitable because companies have to continue to restructure, and as they do so, some workers will be displaced. That is why our unemployment rate has crept up a little bit, and reached 2.3 per cent. 2.3 per cent is a bit high for us, but it is much lower than unemployment rate in all the other developed countries. In the other developed countries, typically, unemployment rate is between 5 to 10 per cent, much higher. If you look forward and ask me what I expect, I would say, honestly, our unemployment rate will gradually tend to creep up. We are feeling the same pressures as the other developed countries. The industries have to continue restructuring, our workforce is getting older, and older workers who lose jobs tend to take longer to find new jobs and to get back into the workforce. If you put all these together, the tendency will be that our unemployment rate will gradually go up. We have got to understand this trend, but at the same time we have to work hard to resist it, to keep our workers in jobs. 

But how are workers actually feeling on the ground? Every year, before May Day, I invite union leaders and U Associates to have lunch, to get a sense of how things are going in the different parts of the economy. This year, after talking to them, I decided that what they said deserved to be heard by more people. So I interviewed some of them and posted the video on Facebook. For a change, instead of answering questions, I could sit there and ask people questions. Most of the unionists were quite upbeat, although they were not sure how long this momentum would last.

Last year, the mood was gloomier. I still remember last year, Sister Jessie Yeo from the Port Workers Union, telling me that there was one working day when two out of three shifts, there were no ships at all at Tanjong Pagar terminal! All the giraffes, the quay cranes, their necks were up, almost the whole day! So this year, when I met Jessie and Brother Arasu, I asked them how things were doing in the port. Jessie said things were looking a lot brighter, the port is handling more volume and she expects things to be busy for the rest of this year. 

I said, “But when I drive past the Tanjong Pagar terminals, it looks like this, all the cranes are up.” She says, “Yes, that is true but do not worry. This is because we are moving from Tanjong Pagar terminal, consolidating and shifting to Pasir Panjang”. Pasir Panjang has more capacity, it is more efficient, it is high tech and they can do more things in Pasir Panjang. For example, they are testing AGVs, Automated Guided Vehicles, which move around in the container yard by themselves.There is no driver’s cabin, no driver, and it collect containers. They get into place, the crane picks up the container from the ship, lowers it carefully onto the AGV and off it goes. And again, faster and faster and faster. Not quite so fast yet but one day, we will get there.  

Most importantly for the workers, when they shifted to Pasir Panjang, all jobs were kept, no jobs were lost. Workers were retrained, quite a few had to take on new roles in Pasir Panjang, but they trained, they took on the new roles, and they did it. So I asked, “How are the workers feeling?” 

She said, “Last year, workers were worried there was nothing to do. This year, workers worried that there is too much to do.” But what about beyond this year? They said realistically, they are not quite certain because there is competition. There is Tanjung Pelapas, there is Port Klang, Malacca is building a new port, and you also have to worry about competition from further away, like Yangshan in Shanghai.  The other ports are also automating, so PSA and their workers have to continue to raise their productivity. But they have a plan and the long-term plan is to build a mega port in Tuas and consolidate everything in Tuas, starting 2021 which is just four years from now. Tuas will be even more advanced, even more efficient, and even more competitive. 

But moving there is going to be a complicated business. The workers will have to adjust. So Sister Jessie and Brother Arasu asked me, “Can the government help us, for example, build an MRT line to get there faster?” I said I will try my best but we will make sure we solve the problems and make sure that Tuas Port is a success because that is critical, not just for PSA but for Singapore. 

The PSA workers, unions and the management have the right attitude. Never take things for granted, be alive to the competition, prepare well in advance and stay ahead. They have been through many ups and downs together, the management and the unions in PSA over the decades. Because they have stayed together, we still keep our position as the top maritime capital in the world. We stay there but we know that we are not automatically floating down there, you have to work hard to be there. There are always competitors looming, somebody is always trying to steal your lunch and we have to guard our lunch, and if there is any other lunch out there which nobody is “chope-ing”, there is an opportunity for us. 

So long as our unions and management maintain this drive, and work closely with one another and with the government, Singapore can stay in the game. I talked about the port because you know about it and because the port is important to us, but also because what the port is doing, all the other industries in Singapore also can do and should do. 

Today, I would like to explain some of what we are doing to continue to prosper. It comes down to three things – jobs, jobs and jobs. Three different ways of thinking about jobs. One, creating new jobs by bringing in new businesses and investments, and expanding existing businesses. Two, finding replacement jobs for workers who have lost their jobs or are out of work, and need work. Thirdly, jobs for future workers. Training students andtraining workers to grow in their jobs. To do something different, bigger, and more productive in the future.

First of all, we are helping businesses to create new jobs, which means new companies, new investments, upgrading and expansion of existing companies. That has been our winning formula for 50 years because if we do not have the new companies, if we do not have a business friendly environment where people want to come, there will be no new jobs.

EDB has been working hard at this, to get MNCs to come in to Singapore. I just give you a sample of the projects this last year. In Electronics, Micron invested more than $5 billion to expand its fab in Woodlands, creating 500 jobs.

In IT, Google opened a campus in Mapletree Business City. 1,000 Googlers there – 1,000 people working, and important for our IT sector. But Google is also training 1,000 SME business leaders on how SMEs can go digital, so helping to transform the economy.

In chemicals, it is a mixed picture. Some plants consolidating but others expanding, investing and we are still getting new projects.

For example, Evonik broke ground for a second plant in Jurong Island. They produce raw material for animal feed. $800 million investment, 150 jobs. Every job we create, it is a few million dollars of investments, people must put the capital in, build the machinery, the equipment, provide the training, then only we can be productive, then only we can have good jobs. That is what EDB and the government have been doing.

At the same time, we have been helping SMEs upgrade themselves, go overseas, expand and get new capabilities. Not just high tech companies, but also the traditional ones who can reinvent themselves and do new things. One National Day Rally a few years ago, I talked about Bak Kwa in Ginza and how we helped the Singapore Bak Kwa makers navigate the Japanese bureaucracy and their rules, so that we can import the materials, make the Bak Kwa in Japan and sell Bak Kwa in Ginza, which turned out to be very popular with the Japanese.

Today, let me tell you about another Singapore company, it is called Grandluxe. It started 75 years ago, in 1942, as a book-binding workshop along Mohamad Sultan Road. You may not know what book binding is about but in the old days we used to produce reports, papers; they come in little bits, we accumulate them then we bind them together into volumes. Like Parliamentary Reports, Hansards, they come each session one little pamphlet, and then you bind them together to become neat volumes.If you go to the library you can see them. This is work by companies like Grandluxe. Sometimes hard bound, sometimes even leather bound, and all done by hand.

Grandluxe did well, expanded into the printing business, they set up a factory in Jurong, and they printed stationery and notebooks. But slowly, the world changed. Today, reports do not come in little pamphlets anymore. They come, one link in your email. You want to see them, you click, the PDF file comes. You want to see one from 10 years ago, you search the Parliament’s website, and you can find it. 50 years ago, also down there. There is nothing to bind together. You cannot take all these links and put a volume around them. Even diaries and notebooks, you carry a smartphone. You put everything down there. You note it down, you share it on WhatsApp. You do not buy diaries anymore. 

So Grandluxe’s old business was shrinking. They decided to reinvent themselves and change their business model. They turned bookbinding into a premium craft. They started a new company, they gave it a new name, Bynd Artisan. Not just a printing and binding factory, but now it is a retail experience. The customer goes to the shop, you pick the materials, you want beautiful paper, you want a pretty cover, you want special lettering, you pick, choose and decide, and then the skilled bookbinders will personalise a beautiful leather bound notebook and thing for you. Maybe for yourself, maybe for your wife or husband or girlfriend. You can watch them at work and admire their skills. Now, the company is doing well and selling to the world. This has given long-time employees like Ms Tan Buay Heng a new lease of life. Ms Tan worked with the company for 40 years. She started as a production operator, binding books. Now she has become a craftsman; she is personalising leather notebooks for customers, conducting workshops and training younger ones. She is also managing a retail branch. Even as a mature worker you can still learn, you can still change.

What Bynd Artisan did, SPRING and IE Singapore are helping many other SMEs to do. Not every SME can become a retail, boutique book binder, but many can reinvent themselves and find new niches in which they can grow. Ms Tan Buay Heng’s story – from a production operator to become a retail branch manager – can become the story of many other workers.

So firstly we need to create new jobs, but secondly, we also need to help workers who lose jobs find alternative jobs, especially the PMETs. Because the businesses have to restructure to survive, and technology is disrupting everything. So redundancies will continue even as our economy grows. We are particularly concerned about sectors which are not doing so well. We have expanded several schemes under Adapt and Grow – we have got the Professional Conversion Programme (PCP), we have go the Career Support Programme for PMETs, and we have got enhanced work trial support for the rank-and-file. So many programmes, so many names, it is a whole alphabet soup. Brother Swee Say is trying all sorts of things and different approaches and many of them will work.

Let me illustrate with some actual examples, told to me by the union leaders and the U Associates.

Brother Mah Cheong Fatt is from the offshores and marine industry, he is the Executive Secretary of the SMEEU – Shipbuilding and Marine Engineering Employees' Union. The industry is experiencing tough times now. Three years ago it was doing well, oil prices was $100. I visited them at Keppel, they were so happy, they told me that order books were full for the next five years, and workers were getting bonuses, 12 months, sometimes even more.

Unfortunately for the industry, the price of oil fell sharply, now it is about $50. So oil exploration, oil production has slowed down. Drilling has stopped, there is overcapacity. The orders for the drilling rigs have been either postponed or cancelled. For the last two years, there had been no new orders. The yards have to let people go. Since the last peak, the shipyards – Offshore & Marine – have lost about 30,000 workers. 30,000 workers! If they were Singaporeans, we would have a big problem. But most of them were foreign workers, so our own workers did not bear the brunt of the redundancies. But some of our workers, Singaporeans, were also displaced. Last year, about 1,000 were retrenched. This year, we expect a few hundred more. The foreign workers, they can go back to their home countries. But Singapore workers, this is home, these are our brothers and sisters.  What do we do for them? 

Our first priority is to help them find another job. With the O&M industry as it is, it is very difficult to find a replacement jobs in another shipyard. But there are other industries which are doing well, which require the skills which the engineers and technicians from the shipyards have, like transport, like aviation. If we can marry them up, take the technicians and engineers from O&M, link them up and train them, adapt to work in transport or in aviation, I think it is a win-win.

That is in fact what we are doing. Sister Sylvia Choo, who is the Executive Secretary of SISEU (Singapore Industrial & Services Employees’ Union) is working on this because SISEU includes the aviation and aerospace industry, and Brother Edwin Khew, who is with the Institute of Engineers of Singapore – he is the president of the institute – they are working with Brother Mah Cheong Fatt to organise job fairs to help workers from offshore and marine find new jobs in aerospace and in transport. It is a bold move for workers to go and do that, it is not so easy. You have to go outside your comfort zone, but if you make the effort, you train, you can do it, and some have already done it.

This is not just about schemes and programmes, but also about walking with workers every step of the way. As Brother Chun Sing said just now, LM (Labour Movement) is with you. We organise job fairs, we set up stalls and give out pamphlets. But we go beyond that. Brother Desmond Choo told me about a recent job fair which he organised here, in Our Tampines Hub. It was very successful, 750 people came and they matched up maybe 200. We hope from that we will have a good proportion of new jobs. At the fair, he noticed one person walking around the stalls for some time, looking lost. He went around once and he did not stop anywhere. He went around second time, he did not stop anywhere. He went three rounds and did not stop anywhere. So Desmond went up to him and asked, “What is the matter? You did not stopped anywhere.” The man said he was lost, he had the pamphlet, and he saw the stalls, but he did not know which job would fit him. Desmond counselled him, found out he was a shipyard material handler and matched him with a laundry operator. What Desmond did for this worker is what we want to do with every displaced worker. Each one is an individual, a brother or sister, not a statistic. Each one needs to make the effort but each one, we will hold his or her hand and help them make that change and get into a new job. That is why the labour movement is as what the Secretary- General says “an unusual labour movement”. It takes care of those who have jobs and helps them to keep their jobs.

I am confident that we can overcome the challenges and emerge stronger. Each one of us, with one another for one another, for Singapore

PM Lee

For those who have lost their jobs, NTUC helps them to get replacement jobs. For those who are still in school, NTUC works with the government and with the businesses to keep this economy going so that there will be jobs for the people when they come out from school. Unions elsewhere do not think about those who are jobless, and especially the young who have yet to enter the job market. Because their members are the ones who are working and they protect the ones who are working, sometimes at the interest of those who are not working. In many countries, after the financial crisis, youth unemployment went up and have stayed up. It is very high, it is a very serious social problem. Even those who are working are often underemployed. You see it in Europe, Spain, Italy and Southern European countries. You see it even in France. In Asia, we see it in South Korea and in Taiwan. Many institutions, lots of people going to universities, but graduates cannot find work, they are hanging around, and underemployed. They are very unhappy and it is a social problem.

But in Singapore our youth unemployment rate is low. Once you graduate, whether from ITE, polytechnics or universities, you can find a job within not a very long time. It did not happen by accident. It happened because we make sure our schools prepare our young people properly for the job market. They emphasise on-the-job training and they work with employers to tailor the curriculum to what the market and employers need. They work out internship programmes so that we prepare the workers even before they graduate.

NTUC is also engaging new graduates to point them onto the right path. It has set up the NTUC Youth Career Network to mentor youth by offering career guidance and preparing them for job applications. In fact, there is a NTUC-PA Youth Career Network Skills Marketplace going on downstairs which I hope you will visit after the Rally. The Network is not only doing good work but the good thing is, it has attracted many passionate volunteers.  I met one of them who came for lunch, Sister Zuhaina. She has been coaching mentees, polishing up their CVs, preparing them for interviews, giving them confidence to pursue their interests, enabling them to get into a job if they have any difficulty. Get started and established themselves. I thank volunteers like Zuhaina because she embodies the spirit of helping others to succeed. Similarly, we are creating opportunities for all our workers, young and not-so-young, so whatever age you are, do not stop trying! But please be open and flexible when looking for new jobs. Be willing to try something new, not just new jobs with new employers, but also new careers in different industries. Take up courses, reskill and if you get a job offer, consider it carefully.  It will not be an easy process but the LM is with you.

We also need employers to come on board. Do not just recruit new graduates, give mature workers a second chance. Older workers bring with them maturity and experience. Grey hair is quite good! The Public Sector is leading by example. We are expanding our Adapt and Grow scheme, our agencies have been hiring mid-career PMETs, including mature workers. You will see them in Land Transport Authority (LTA), Ministry of Education (MOE), Ministry of Health (MOH) and many other Ministries. We have launched several Professional Conversion Programmes to convert mid-career workers to bring them in, to be able to hire them and we will do more. I urge employers to work with us. Unions are doing their part; so must you. Ministry of Manpower (MOM) can develop Professional Conversion Programmes for entry and mid-level jobs. We will support employers with reskilling programmes. The Government will actually pay a good portion of the wages of the workers during the trial period when you take him or her on, and try to fit him or her into your outfit. We helped to pay the wages. So give it a try. If the tripartite partners work together, we will transform together, adapt together and grow together. That is the second point, we find replacement jobs for workers who are displaced.

The third point is to upgrade all workers, supporting them in their existing jobs. We have got to take worker upgrading very seriously. In other countries, workers know that they need to work hard to keep their jobs. They are hungry. We are hungry, we are working and they are working hard too. You heard Secretary-General just now talking about the learning journey which some of the union leaders went to in Chengdu. I met two of the people who went there – Brothers Hock Poh and Arasu – in fact three of them, and Sister Jessie as well. They discovered how hungry the Chinese workers were when they went to Chengdu to visit the smart factories. I asked them to show me a picture of the smart factories they said, “Sorry not allowed to take photos”. So this is what you can see. But what they saw, they are not allowed to show you but I will tell you what they saw. 

They saw highly automated plants, not sweat shops, not lots and lots of workers slaving over machines, but one worker in a big factory, with 20 machines. He is not operating it. He is supervising it, troubleshooting it, and monitoring it. It is big data, industry 4.0. IT, organisation, management, skills and discipline. That left a deep impression on them. The Chinese workers, I said, “What are they like, are they well educated?” No, not all. But they work hard and they train hard. They build a dorm for 11,000 of them, all the facilities are there. The workers live in the dorms. At night, they go onto their account, they log on, they take e-learning modules. I am reminded of the Korean workers who used to come to work here to build structures, one generation ago. Those of you old enough will remember. Ssangyong, Samsung, they used to bring Korean workers. The Korean workers work here, at night they live in the dorm, nothing to do, they go and pump iron to get strong to work the next day. That is how Koreans got strong. Now, they do not do it anymore but at that phase they did.

The Chinese are now at that phase of development, and their workers are hungry. We may not be at that stage of development but unless we are as hungry as them and as determined as them to upgrade ourselves, and willing to put in as great an effort, I think our cheese will be stolen. We have to make that effort, we have to strive and we have to keep our position. That is why we have been working hard on SkillsFuture. The good news is, we have a head start. The IMF has been monitoring these programmes all over the world and their report is that SkillsFuture is one of the most comprehensive such programmes they have seen. So we have got a pat on the head, not bad but actually, we know we are just starting out and there is a long way to go.

Last year, I went to SIT and met the students, had a dialogue with them. I met several of the mature students who have been upgrading themselves. One of them was Adelene Teck. She worked as an occupational therapist for 20 years, decided she wanted to upgrade herself, she went back to school and enrolled in SIT. She was a mature student and she told me the other classmates are like her children. They are, in fact, her children’s age. So I asked SIT, how is she doing now? I am very happy to tell you that Adelene is about to finish her year-long programme, and now looking forward to going back to work to apply her skills. That is what we all need to do. We are never too old to learn. 

These are our plans to transform our economy and grow our jobs. At the centre of this effort are our industry transformation maps, the ITMs, which Secretary-General talked about. They were a major recommendation of the CFE, of the Committee on the Future Economy. The ITMs mean we are going industry by industry, working out what specific things we need to do in that industry to upgrade it, to adapt it, to make it competitive, and putting it altogether into a plan for that industry to make that industry upgrade. Through the ITMs, we can stay competitive and create the jobs.

The logistics industry is one of the ITMs we have just launched. It is a big contributor to our economy and with transport, it employs a quarter million workers. There are good prospects because you can use technology, you can use robotics, and you can use data analytics. I am very happy that NTUC is also a little bit in this business through NTUC Fairprice. Fairprice has a new distribution centre in Joo Koon, equipped with an Automated Storage and Caddy Pick System. The robots move around, carrying the pallets. It is delivered, it goes to the bay, and it is wrapped up automatically. This one still needs a human being, and it goes out of the warehouse to your NTUC Fairprice store somewhere near you. 

There are many opportunities for doing this. We are in the right place in Southeast Asia for logistics. Other logistics companies are also expanding. We hope there will be 2,000 PMET jobs created in the next 5 years. So there is a plan, there are the resources, and we will make it work. That means everybody has to play their part. Employers, to invest in technology and train up workers. Unions, to work with employers, identify where the new jobs will be and help the workers get the new skills. The Government, to support the companies to adopt the new technology. The workers to get the new training. This is tripartism in action. For logistics, there is an ITM. But actually we have 23 industry transformation maps, for all the different sectors of the economy, covering 80 per cent of the economy.

We have got to make this happen. Last year, we set up a tripartite council – the Council for Skills Innovation and Productivity. It was chaired by Brother Tharman, who was leading the SkillsFuture effort. Since then, the CFE have completed their report. The CFE was chaired by Brother Swee Keat and when he was ill, Brother Iswaran co-chaired it for him. The CFE has come up with a comprehensive plan to take our economy the next step forward. Now we need to implement the CFE’s recommendations to make the transformation happen. I have asked Brother Swee Keat to take over from Brother Tharman as Chairman of the Council. We will rename it the Future Economy Council, and the Council will also have the other ministers – Brothers Iswaran, Chun Sing, Ye Kung, Lawrence – as well as other minister and MOSes, especially the younger ones. Swee Keat will work with them, to implement the CFE recommendations, to make sure the ITMs work, are implemented and make a difference.

I am putting them in charge of this strategic effort. It is a deep transformation. It will take time, it will extend beyond this term of government. It is an opportunity for the younger ministers to work closely together as a team, strengthen their bonds with employers and unions, and with each other, and show Singaporeans what they can do. It is their generation of leadership who will have to work with Singaporeans to take the country to new heights.

Our unique tripartite partnership is the secret why we have been able to transform the economy over and over again. Starting from the nation building years when we began to industrialise, through the British withdrawal from the bases here in 1971 when we faced the prospect of tens of thousands of job losses. Through the first major recession in 1985 when we had to cut CPF drastically in order to reduce costs and become competitive again. Through the Asian Financial Crisis, SARs, the Global Financial Crisis, many crises but each time, although the challenges seem daunting, we pulled together, adjusted course, made sacrifices, helped each other and came out ahead, stronger. I have no doubt we will face further challenges ahead, even serious ones. But if we strengthen the tripartite system, and remain united, if the labour movement remains strong, takes care of our workers and makes them co-owners of our system. If all our segments of society, workers as well as employers, managers and professionals as well as foremen and rank and file, sacrifice equally when sacrifice is called for, and share in the fruits of success when things go well. Then I am confident that we can overcome the challenges and emerge stronger. Each one of us, with one another for one another, for Singapore. That is the way we make sure that every May Day we will have good reason to celebrate. That is the way we can make good things happen and create a bright future for our children. 

Thank you very much and Happy May Day! 

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