Retrenchment Insurance, really? 

Easier said than done

On paper sound very good eh. We are here to ’empower’ your future, we are here to be THE opposition, we are here to offer solutions. Workers’ Party just painted a rosy picture, hear liao very shiok, very doable. 

Their proposal, a Redundancy or Unemployment insurance: 

Employers and employees to each contribute 0.05% of monthly salaries to a fund that would provide payouts for those who have been retrenched.

What it means: 

1) Taking average wage of S$3,782 in 2014, that means employers and employees would each contribute about S$1.90 every month. [0.0005 x 3800 = 1.90]

2) When workers are laid off, they will be given a payout of 40 per cent of their last-drawn salary for up to six months. This is stupid, it should simply read given *2.4 months of salary*, another case of making their proposal sound so grand. 

What is wrong: 

1) This will lengthen the duration of unemployment. Regardless how well designed this proposal is, People will be discouraged to look for job immediately. In the long run, more people will be out of job. 

2) 0.1% premium. 0.05 from employer and 0.05 from employee: Is this premium sufficient to maintain the system? When more people are out of job, is the premium sufficient and rigorously tested?  

Will there be cases of collusion where employer and employee aims to cheat the system? What and who will be the enforcement? 

3) Administratively, what is the cost to keep this running? 10 million as proposed by WP???!?? More money will be wasted trying to solve the unemployment issue.  

There are reasons why Singapore prefers to teach citizens how to fish, not give the fish. We have SkillsFuture, Adapt and Grow, PCP, Workfare blah blah blah. 

Good try by WP, but just like the Elected Presidency, they tried to offer something different but end up not making any difference. Well, at least they wrote a 17 page proposal, or did some fresh graduate write it? 



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