PM Lee Hsien Loong at Opening Dinner of the NTUC National Delegates' Conference 2015
Sister Diana Chia, President of NTUC
Brother Chan Chun Sing, Secretary-General of NTUC
Mr Guy Ryder, Director General of International Labour Organisation (ILO)
Delegates from ITUC-Asia Pacific and the ATUC – ASEAN Trade Union Council
Delegates to the International Forum on Tripartism
Brothers and sisters
A very good evening to all of you.
I am very happy to be here this evening for this NTUC National Delegates’ Conference. We hold a National Delegates’ Conference every four years, but this one is special – because this year is SG50, our 50th anniversary, and NTUC has played a huge part in getting Singapore here. Because the unions are a cornerstone of our unique system of tripartism, built and nurtured painstakingly over the years.
Confronting global challenges
So it is very appropriate for the NTUC, Ministry of Manpower (MOM) and the Singapore National Employers Federation (SNEF) to hold a global conference on tripartism to coincide with this delegates’ conference. It is timely because many countries around the world face similar challenges, and globalisation and technology advances are affecting workers all around the world.
I give you one graphic example. You have heard many lectures about globalisation but I do not think you have heard this story. Recently I met with the Director of the British Museum, Mr Neil MacGregor. Few years ago, he produced a very successful series of radio talks. It was called “A History of the World in 100 objects”. He had 100 radio programmes, each one for 15 minutes. For each programme, he chose one item from the British Museum collection to talk about it, and illustrate something about mankind, something about that civilisation, something about progress. They chose all the items, but the question was what were they going to choose as item number 100 – the final thing – to represent the world today, to embody the concerns and aspirations of humanity? They had a list of things, but one of the items on the shortlist for this object number 100 was a football jersey. Which football team? Chelsea. Why is it special? Because Chelsea is an English football club, but it is owned by a Russian Billionaire, Roman Abramovich. The football jersey was a shirt number belonging the striker. The striker was Didier Drogba; he belongs to the Ivory Coast but he is playing in England, for an English team. The shirt – I think you can guess where the shirt was made – the shirt was made by Chinese workers in China. This last one I do not think you would know – where did the British Museum buy that shirt? They bought it in Peru, from the flea market, and it was a fake. That is what globalisation means! We all benefit from it. We have the worldwide division of labour, this is called the supply chain, but at the same time it has put workers everywhere under pressure. It has made our fortunes – fortunes of countries, fortunes of our economies, much more inter-dependent. The world changes faster; conditions are much less predictable. No matter where you are, which country you may belong to, you are competing with workers from around the world.
That is just globalisation, but on top of that, you have got technology also disrupting industries and also displacing workers. Not just workers in factories, but also workers in offices – white collar workers, even professionals – lawyers, accountants and doctors. Because if you want to search documents, you have Artificial Intelligence (AI) programmes which can go through one million emails and pick up the ones which are interesting, or pattern of emails – who said what to whom. If you want to diagnose illnesses, some computer programmes now can be as good as doctors at making the judgement. Is it breast cancer, is it not breast cancer? What could it be? Enormous database and the same feel as a very experienced professional. So a lot of jobs are going to be disrupted; every economy is going to be disrupted, especially Singapore, because we are a small country with the most open economy in the world. We depend heavily on foreign investments. We depend heavily on trade. So much of what we produce, we cannot consume ourselves. We make petrochemicals and sell it to the whole world. We want smart phones, but we cannot make our own smart phones; we buy them from the world. The food we eat comes from NTUC Foodfare, but NTUC Foodfare buys it from suppliers all over the world. You ask Seah Kian Peng in Fairprice and he will tell you where his suppliers are from – many, many countries. Our workers and companies have to accept globalisation as a fact of life, and we have to contend not only with technological change here, but wherever we go and do business, wherever we live. Even in China, it is happening to them. They are the world’s factory, but they too are rapidly automating. Last year, about one quarter million industrial robots were purchased worldwide, but one in four of these robots went to China, or were made in China. They are automating on a huge scale. In Guangdong province, where there are a lot of Chinese factories, they are aiming to have 80% of their factories automated by 2020, in five years’ time. They are no longer armies of workers. They are going to be as productive and as competitive as other countries. The Guangdong province government has a programme to subsidise companies to buy robots. One company in Dongguan, which is in Guangdong, has built a fully automated factory. It used to have 650 workers, now it only has 60 workers – one-tenth. Its production volume has gone up three times; its defect rate has gone down five times. So the Chinese are seeing this too.
They are competition for us, but they are not the only competition for us. We are getting competition from developed countries and advanced economies as well. New York City in America is making heavy investments in technology. We build universities, they link up advanced universities – Cornell in New York is being linked up with the Technion, which is one of the top universities in Israel. It is a technical university. The State is funding them US$2 billion. The State is investing. We talk about broadband network fibre. In New York State, also State money, is investing in state-wide high-speed broadband network. We talk about investments. They talk about investments and high-tech. New York State has become the second most vibrant start-up hub in the US, after Silicon Valley. They are friends, they are advanced, but they are also competition. Japan, they compete with us. Even on costs, they compete with us. Singaporeans workers want higher wages; Japanese workers also want higher wages. Singaporean engineers say “Wages are not high enough”; Japanese engineers say “Our wages are lower than Singaporean engineers.” That is competition for us.
These are secular trends. They may vary from year to year, but gradually, you can see them happening more and more. In addition to the secular trends, the global economy is facing cyclical headwinds. The US economy is soft, the Europe is stagnant, China is slowing down. Singapore’s own exports are flat. PSA is handling fewer containers. Our GDP growth this third quarter is down year-on-year, just 1.4%. We have to be prepared for a slowdown, possibly a downturn.
When things are as uncertain as this, it is no wonder that workers all around the world are feeling anxious and insecure. It is no wonder that the trends are putting pressure on wages, and causing wages to stagnate. Old jobs are being lost, and whole industries and companies are changing. Skills become obsolete faster than before. We get new jobs; they are coming. But they take time. To learn new skills takes time. For workers to change jobs, change industries, fit into a new niche, become productive again, earn the same as before – hopefully more – is not always so easy, especially if you are older workers.
The Way Forward
So what is the way forward? How do we improve our lives, the workers’ lives? This is a question on many minds, so it is very timely that the ILO is launching a major initiative on “The Future of Work” at the International Labour Conference earlier this year, and Mr Guy Ryder talked about it at his lecture this morning. Singa¬pore will participate in this ILO initiative, because it makes a lot of sense for us. We will share our experience, and at the same time we hope learn from the experiences of others.
We have made Singapore a developed economy, but the truth is we have not solved, for all time, the problem of how to make a living for ourselves. For now, yes. For the future, just to maintain this, never mind to become better, we have to keep on looking for new solutions.
We cannot resist globalisation and technology, because if we try to do that, our economy will stagnate, our workers will become uncompetitive, and Singapore will be left behind.
We have to ride the wave, move forward, and use the power of free markets to our advantage. We have to depend on free markets because governments by themselves cannot generate wealth. If you try a centrally-planned economy, you cannot compete against free markets and open competition. With free markets, you can be efficient, you can be nimble, you are under pressure to perform, you have to break even, and businesses have the incentives to do well, to grow new opportunities. Workers have the incentives to improve and upskill themselves, earn a little bit more. That is why China has abandoned their centrally-planned economy. Now they call it a socialist market economy, and it is very competitive. Cuba is probably one of the last hold-outs. But even in Cuba now, they are belatedly reforming and opening up. They are very talented, hardworking people. But the system is wrong; the central-planning did not work, and it has taken them 50 years before they acknowledged their mistake, and now they are changing, opening up.
So we have to go with the flow, we have to go with the competition, with the markets, and be able to compete. But it does not mean that the State does not have anything to do. The State – the Government – has got to create the conditions so that the markets can generate prosperity for all of us. We have got to maintain law and order we have got to build the infrastructure, we have got to provide essential public goods like education, public healthcare, and public housing, and we have got to set the rules, for example, to prevent monopolies from forming, to the detriment of consumers. And we have got to mitigate the excesses and the negative effects of a market system, which there will be. So the Government supports workers acquiring higher skills so that they can stay employable. It helps displaced workers to find new jobs. It strengthens safety nets to help those who are left behind.
This is what we have been doing in Singapore. We have been strengthening our safety nets, giving our people better protection in a less stable environment. So we have the Progressive Wage Model to upgrade the skills and wages of low-income workers like security guards and cleaners. We are implementing MediShield Life, to give every citizen lifelong medical insurance protection for hospitalisation bills. We are going to implement Silver Support soon to complement the CPF system, to make sure that every Singaporean has adequate provision for their retirement years. At the same time, the Government is upgrading our economy, to keep our businesses and workers competitive. Minister Heng Swee Keat is leading a committee on “The Future Economy”, to review our economic strategies. We know our direction – to improve productivity, so that we can sustain higher wages for all. But we need to review our specific measures. How to help our domestic sectors grow? How to attract investments and help companies to develop new markets? How to make best use of the foreign workers and foreign talent that we need in Singapore? In particular, we are upgrading our workers, to equip workers to benefit from the changes which are happening. That is what SkillsFuture is about – to provide every Singaporean with opportunities to develop to their full potential, regardless of starting point in life, throughout their careers. So you can work andtrain. Each time you train, each time you have new qualifications and skills, you upgrade.
If I list all the challenges, it sounds like a lot to do, and daunting. But I think if we compare ourselves with other countries, Singa¬pore is well-placed to tackle these problems, and we can look forward to the future with confidence because we have well-educated people; because we have an ethos which is outward-looking; because we have a tech savvy society; because we have good unions who know what we need to do and will work with us to help to make it happen. We are seeing it happen already – solutions and improvements. For example, at PSA. I went to visit them a few months ago when they opened new wharfs at Pasir Panjang. They showed me their new container yards. It used to be that the gantry cranes had to have operators to manoeuver, and bring the containers up, across, down, one by one. Now the gantry cranes are automated. They work by themselves. One supervisor looks at three or four cranes. When the crane gets stuck, it beeps “help me”. The supervisor pays attention to that from a screen, and then clears that. He can track three or four cranes at once. The cranes do most of the work. Result: More productivity, better jobs, better pay, better performance. We are able to do this because the unions are with us – we can talk to the unions, we can retrain the crane operators, we can restructure the jobs. Not every country can do that. In many countries, if you want to restructure the jobs, you spend years negotiating, compensating, arguing, often getting stuck. But in Singapore, we work together, we work out a win-win situation, we move forward.
Role of Unions
How do the unions fit in in this landscape? Different countries have taken different paths. In many European countries, there are very strong unions. In some of them, the unions are strongly entrenched, enforce the status quo and block changes. Union members have very strong protections, but those who do not belong to a union, particularly the unemployed or the young ones who are just entering the workforce, carry the burden. To hire a permanent worker, you have high cost, you have strict rules, so companies are reluctant to hire permanent workers. Result: Unemployment is higher, younger people cannot get permanent work. They do temporary jobs – security is less, working conditions are not as favourable. Maybe they do not get work and they stay unemployed for a long time. When the economy does not do well, labour relations are stressed, there are more quarrels and the strife further hurts the economy. It happens. It happens because the system has gone in the wrong direction and it is not so easy to put it right. The British faced this problem in the 1960s and 1970s. When the NTUC was formed in the 1960s, we looked at it, and we decided to try and avoid the situation which the British had gotten themselves into. At that time, they called it “the British disease”. We said, “No, we must find a different way.” That was a strong impetus for us to try a different model in Singapore. The British eventually got out of that model. Not everybody is happy but today British labour relations are different. But on the continent, there are still problems. France is still caught in a trap like that, and finding changes hard to manage, even though it has to modernise. You may have heard of a 35-hour work week in France. You are not allowed to work more than 35 hours. If you do, there may be legal penalties; it is illegal. Some French businesses want to work more than 35 hours. In fact, they want to push from 35 to 39 hours, because there are jobs there which they feel are endangered. If you cannot work more flexibly, the job may go elsewhere – may go to Slovakia, may go to Slovenia, may go to outside the European Union, maybe go to China. But even when the workers want it, the unions do not always want it. In fact, one union is campaigning to reduce the French work week, from 35 hours to 32 hours a week. If you are one of the workers working 35 hours or 32 hours, you may feel happy. But as a system, I do not think it is a happy outcome. France is an example, but other European countries, some of them have similar problems.
If you look on the other side of the Ocean, in the United States, they have a different model. The unions are weak; membership has been declining for many years. They have a more flexible labour market, and a more dynamic economy than the Europeans. But that does not mean there are no problems for workers. In America, productivity has gone up but wages have not gone up by very much. The workers have not got a fair share of prosperity, and they feel it. They find themselves exposed to uncertainties and upheavals which are beyond their control. The economy goes wrong, there is a financial crisis, they had nothing to do with it, but they suffer grievously for it. Their anxieties and discontent show up in different ways. In politics, it is one of the reasons why Congress is stuck, because of the very strong unhappiness on the ground which cannot find a solution. So there is gridlock; problems cannot be solved. If you ask Americans, “Are you supporting free trade? Do you support immigration? Are you confident of where you stand, of America’s position in the world?” They are not so confident. So America finds it very difficult to promote free trade, to deepen links around the world, to enhance its standing around the world. The system is under stress.
That is another model. Let us take a third model, closer home in Asia. Take China. It is a socialist market economy, where unions are very close to the Government. They do not have Western style elections, so theoretically they do not have to worry about votes or about economic uncertainties making workers unhappy. But, it is not so easy. The unions are closely aligned with the Government, so unions also will not be difficult. But the workers do have problems, the Chinese workers face fierce competition. Competition from each other, competition between different cities and provinces, competition from other investment destinations like Vietnam, competition from robots as I have told you. The welfare of workers remains a concern and when things become difficult, Chinese workers also express their discontent. So there are thousands of demonstrations every year in China, in different places, and from time to time, Chinese workers will send the delegation not to a delegates conference, but to Beijing in order to petition the senior leaders, and try and get their grievances resolved.
Every country confronts the challenges in its own way, and each one has to find its own way and strike its own balance.
In Singapore, the solution which we have settled on is tripartism – a partnership of the unions, employers and the Government. This formula has worked well for us. We have a strong Labour Movement with the interests of workers at heart. We have employers who have learnt to see unions as partners rather than opponents. So the SNEF representative can come to the union delegates’ conference and we can address him as “Brother Robert Yap”, which does not happen in very many countries. We have got a Government where there are also brothers and sisters, and the Government tries to pursue sound national policies which promote growth and which further the workers’ interests. The Government does this not least because it is a PAP Government, the Government, albeit a party whose roots were in the trade union movement, and which maintains a close symbiotic relationship with the NTUC to this day. That is how we do it here. We involve unions, and union leaders are involved in our key national decisions. They sit in forums which shape national policy, like the National Wages Council (NWC), the SkillsFuture Council, the National Productivity Council. When we have economic review committees, we make sure that the unions are represented and their views are heard. Union leaders serve on Statutory Boards and on the boards of publicly-listed companies. Union MPs, labour MPs in Parliament speak up for workers and the Secretary General of the NTUC has to have at least two mandates. One, he has to be elected by union delegates, to be their Secretary General. Two, he has to be elected as an MP, so that he is a Member of Parliament, and so that he can be appointed a Cabinet Minister, and sit in Cabinet, with a voice, where we discuss all the key issues in Singapore. That is why we have tripartite partners who can work as equals and who can trust one another.
It is an arrangement which has worked well. If we had a weak union movement, which cannot represent workers properly and cannot get a fair deal from employers, that is not only bad for workers, it is bad for Singapore. Sooner or later, we will run into trouble. If we have strong unions but hostile, antagonistic, focussed narrowly on the short term interests of their members, it will hold back the country and eventually the workers will get hurt. What we need in Singapore is a strong Labour Movement with good support from workers, a seat at the table, working constructively with employers and the Government to get the best deal for workers and advance the shared national interest.
We did not get here overnight; we have been building this tripartite relationship over many decades. It goes back to Mr Lee Kuan Yew and the first Secretary General, or one of the early ones, Mr Devan Nair, who changed the union model and labour management relationship model to what we have today, and who took us on this journey which has seen us through ups and downs, good times, bad times, built trust, dealt with problems, reinforced trust and taken us forward. Sometimes people criticise this model, to say, “Oh, you are not fierce enough. You don’t look like union leaders because you don’t make demonstrations, you don’t go on strikes, you don’t shout fierce slogans.” But the best union leader is the one who gets the best deal for the workers, not the one who is the fiercest. It has worked for us. The proof is this, just one small fact: In most countries, union membership is going down. In Singapore, union membership is going up – we have 900,000 union members. We work through cooperation, not through strife; through tripartism, not industrial warfare. That is how the NTUC has stayed relevant and has improved people’s lives.
Now, Singapore is 50 years old and we are going into the next phase. The question is, what do we do? I say, we keep the tripartism formula, but the tripartite partners have to upgrade themselves, have to raise their game. You have to strengthen and maintain the trust that we have built into the next generation. And each of the partners must do its own upgrading – the Government to develop new economic policies, employers making sure their companies stay viable, finding new business opportunities, unions staying relevant to new union members, in a new economy.
So, the Labour Movement too, must adapt. I just give you a few examples of what you are doing and what you have to do. You have to adapt to an older workforce – ageing population. Workers are older and they want to work longer. The Labour Movement has helped to deal with this – to design jobs, to design salary structures and to facilitate older workers staying employed. To persuade the employers to value the experience which older workers have, and to get the Government to raise the re-employment, which we are going to do as I told you recently. It is now 65, we are going to push it to 67 within the next two years. The unions must adapt to other things which are changing too. The other thing which is happening to the workforce is that we are finding many more professionals in the workforce. Already, half the workforce in Singapore is PMETs and if you go forward, probably two-thirds, maybe even more. The Labour Movement cannot be for the rank-and-file non-PMETs, it has to represent the Professionals, Managers, Executives and the Technical workers too. The PMETs have different needs, different issues. They are different from blue collar workers, but they also need to be organised, they also need help, they also need guidance, and they also can benefit from joining unions affiliated to the NTUC and being looked after by the Union Movement. These are things the unions must do. To do them, the unions need good leaders – Leaders who are respected and trusted by members, who are firm in defending workers’ interests, but appreciate the broader national interest, leaders who can rally the ground and hold support.
NTUC has institutionalised leadership renewal. You have a “Three-Flow” framework. It is one of Brother Lim Swee Say’s slogans and it is a serious one – to flow in talents, to flow up those with good potential to hold leadership positions, and to flow on those who have made their contributions so that the younger leaders can take over from them. With this framework over the years, NTUC has built up a strong core of 6,000 leaders.
In this Delegates’ Conference, you are going to elect a new Central Committee. I think the election is on Thursday. As part of this renewal process, several current Central Committee members will be flowing on and stepping down. Brother Lim Swee Say himself stepped down earlier this year and handed over to Brother Chan Chun Sing. At this Delegates’ Conference, Sister Diana Chia will be stepping down. Diana started off as a nurse and joined the unions more than 25 years ago. She rose from the ranks to become our first female NTUC President. She set the path, I am sure she will not be the last one. Brother Lim Kuang Beng has served the Labour Movement for 25 years too. He started off in the Singapore Industrial and Services Employee’s Union (SISEU), and was elected to the Central Committee in 2003 and has served as the Secretary for Financial Affairs since 2011. Sister Nora Kang started out 30 years ago with the POSB Employees’ union. She was elected to the Central Committee in 1997, 18 years ago and she has been the Chairperson for NTUC’s Women’s Committee for the past 8 years. They have been effective union leaders. They understand workers’ concerns, they know the national interest, and they have influenced and helped the Government to implement policies which benefit workers. I have worked closely with them – we speak candidly with one another, we know how each other thinks, and we can rely on each other to get things done. I thank them all for their service, for their support and for their friendship, brothers and sisters.
Now, the delegates have to vote for a new Central Committee. Many of the candidates are familiar faces because the NTUC has been developing them for some time, and it is time for them to step up. At the national level, we have just held our elections and have just voted in a new Government. I am honoured that Singaporeans gave my team a strong mandate to take the country forward. Now it is NTUC’s turn to hold your elections and you have to give your team a strong mandate to take the NTUC forward. Choose the right people, support them firmly, so that they can speak for you with a strong voice, so that they can deal for you with their tripartite partners, so that they can represent you, and work out a long-term vision for the Labour Movement, and realise that vision together with you. With you, for you, for NTUC.
Over the last 50 years, we have nurtured a special model of tripartism. It has enabled our people to excel, our businesses to grow, and our nation to thrive. It has been a major ingredient in our success, and it comes down to having good leaders who forged friendships and trust over a long period, who shared the same passion to improve the lives of Singaporeans, and who can mobilise Singaporeans, particularly workers, to overcome the challenges and build a better Singa¬pore.
That is what the Labour Movement has done for many, many years. Let us continue to uphold this model of tripartism and continue to move forward as one united people.
Thank you very much.
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