The mainstream media cheered the move by PAP govt to increase CPF contribution of older workers and their employers as a major step to "flatten the wage scales and improve the employment of older workers"[Link]. If you read the reports, you get the impression that this is a bold new move by the govt to improve the employment situation for older workers. Tharman warns that the govt "cannot make this major move in one step". So we all get this impression that the govt is doing something brave and new....but...
Actually the PAP govt lowered the CPF contribution rate in 2003 arguing that:
Older workers are at greater risk of losing their jobs. One reason for this is that our seniority-based wage structure results in older workers being paid more than younger workers. The wage differential is sometimes larger than the productivity differential, leading to companies retrenching older workers first when their business comes under pressure." - CPF Board FAQ [Link]Full story
