Parliament: Singapore Must Not Have Jobless Growth Amid AI Transition

By Ivan Lim
Contributor to AsiaN

SINGAPORE: Robots and generative AI have presented Singapore with a so-called “jobless growth” curve ball: how to ensure that technology-driven productivity is not at the expense of staff numbers. A battle of ideas has surfaced between the ruling People ’s Action Party (PAP) and the Worker’s Party (WP).

In the face of the AI revolution, the government has undertaken a strategic economic review to identify where AI can help the economy grow at a targeted two to three per cent.

In the preceding two years Singapore has a good labour market with a low unemployment at two per cent. However, in 2025 retrenchment numbers have risen to 14,490. This has raised concern white-collar workers in the professional services, financial, information-communication and technological sectors may be at risk from companies adopting AI and automation.

Rising to the occasion, the 1.15 million-strong labour federation (NTUC) has tabled a parliamentary motion calling for AI transition with no jobless growth.

The NTUC, a close ally of the PAP, is counting on the government to upgrade its network of company-level training committees.

Seeing the potential “tug of war” embroiling workers and employers on opposite sides, Manpower Minister averred that the city-state should avoid going down that path.

While accepting that changes in work process due to AI, some jobs would be replaced, Dr Tan See Leng pledged to workers “you will not walk alone”

Dr Tan affirmed the parliamentary motion on No Jobless Growth, he said the government will work with the NTUC and the Employers Federation Singapore under a tripartite jobs council to ensure workers get to upgrade skills and companies supported in redesign jobs.  Dr Tan highlighted the council will scale up the $400 million Enterprise Workforce Transformation package. This comprises the Skillsfuture Workforce Development grant, offering $150,000 for each company in redesigning jobs.

In addition, businesses will receive $10,000 under a skills future enterprise credit to offset costs in transforming the workplace.

The opposition WP has taken a different tack on safeguarding jobs and protect workers from the worst impact of AI and automation. It contended that funds should be devoted to helping new people find new jobs than those displaced or sidelined AI training.

Joining the parliamentary debate on AI transition, Associate Professor Jamus Lim said: “If the objective is to protect our workforce from jobs losses that could result from an economy-wide embrace of AI, then our efforts should mainly be directed toward policies that promote new hiring, rather than those that focus either of reducing displacement or pushing for retraining.”

He noted that hiring of new workers had slowed down while displaced workers were “modest” and localized”

The centre-piece of the WP plan on AI augmentation is a redundancy insurance, a counterpoint to the government-funded skillsfuture job-seekers support scheme. The latter offers up to $6,000 over six months in temporary aid while they actively search for new jobs.

The former will pay 40% of the displaced employee’s last-drawn salary, also for six months while they look for jobs. The difference: the WP scheme sets no income ceiling, nor tapers out in payouts and is designed to cover every worker, including the professionals drawing salaries of $5,000 and above. The redundancy kitty will be built up by employee and employer contributions.

On top of the redundancy proposal, the WP has proposed a national AI equity fund that would disburse $500 to every adult for AI job skills training. This is presented as a social dividend funded by company income tax as well as net returns on sovereign funds investment by GIC and Temasek. Part of the funds will also be available for employers to engage experts to conduct mastery in-house AI courses.     

The WP, which has no affiliated union blocs, has called for funds to be given to individual workers for AL training as compare to the government-NTUC preference to work with a tripartite framework.

 In the event, the government’s more structured programme on AI transition and growth carried the day in parliament given the ruling party’s 87 against the WP’s 12 lawmakers. 

In an overview, analysts agreed with the government and opposition that good jobs can no longer be assumed to come automatically with growth. Singapore can also leverage on its city-state status to be a living laboratory for piloting autonomous vehicles in an urban setting and for cashless payment systems.

However, as an economic hub, Singapore need to fix its dearth of AI talent, such as machine learning engineers. AI product managers, AI ethics officers and cyber security specialists.

“Singapore cannot train its way out of this quickly enough pipeline from universities take years. (It) must acknowledge that solving it requires a degree of openness on foreign hiring that will test political comfort zones,” one analyst commented.

Singling out the government-funded, Futures Job-seeker Support scheme, the analyst noted that the $6000 temporary support for displaced employees over six months is “not fit for the AI era”.

“Six months is too short a runway for serious retraining, moving from financial analysis to data science or legal work to AI governance.”

On sharing of productivity gains from AI, the analyst proposed imposing a levy: “If AI generates large productivity gains they will accrue mainly to capital owners and highly skilled workers while displacing lower and mid-skilled workers.

“One Option is to impose a levy on revenue generated by large AI and digital platform businesses in Singapore.”