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The increase in unemployment in recent months is largely due to the cyclical moderation in some service sectors, which has given rise to a reduced uptake of workers displaced from the manufacturing sector. The period of unemployment for most of those who are unemployed has not been prolonged. The labour utilisation rate also remains high, as indicated by the consistently low underemployment rate of around 1.5%. In addition, labour force growth in 1994 was an annual average of 3.5%, the highest in many years. It will probably take a bit of time for this additional labour supply to be absorbed. We know that there are about 80,000 persons looking for jobs and 60,000 vacancies waiting to be filled by suitable persons. All these indicate that the recent increase in the unemployment rate is not reflective of any particular fundamental weakness of our economy which needs to be tackled with 'emergency' measures. This is rather a problem of 'mismatch' in our labour market which has been made more acute in the recent months as a result of a cyclical downturn in the growth of some service sectors - the major absorbers of displaced workers. What we need is a thoughtful and prudent approach to resolve this problem. We also need to work together and not let our concerns polarise the community and drive a wedge between employers and employees and detract us from finding a solution.
Short-term measures
We have already a lot of common ground which can be pursued despite differences in opinions. In the short-term, our immediate task must be to help our displaced workers, who have been most hard-hit by the recent easing of our employment market, to re-enter the workforce. We will therefore step up our efforts on retraining and job placement assistance.
Retraining
The Employees Retraining Scheme, which was established in 1992, has so far successfully provided retraining for over 60,000 persons. The Employees Retraining Board (ERB) will set up new Retraining Resource Centres to provide career counselling services and intensive pre-employment training to retrainees. It will provide an Outplacement Service to retrenched workers. It will also strengthen the links with employers and trade unions. With these new initiatives, the ERB will make the Scheme more placement-focused and expects to be able to place not less than 10,000 retrainees in jobs in the next 12 months.