Committee of Supply Debate 2026, Ministry of Manpower
Singapore's school-leavers face a challenging job market as AI automates many entry-level tasks. Firms are increasingly prioritising candidates who are immediately productive over fresh graduates. The unemployment rate for residents below 30 was 5.5% in September 2025, almost twice the national resident unemployment rate.
Without access to quality roles soon after graduation, many of our youth risk a “long-term scarring effect,” where early joblessness correlates to lower lifetime earnings, skills atrophy and even social and civic alienation.
Before I continue, I wish to declare that I am the director and shareholder of a company which is an SME.
To support young Singaporeans in facilitating a smoother entry into the workforce, I propose a Youth Wage Credit Scheme. This initiative incentivises micro and small enterprises to offer ITE, Lasalle, NAFA, polytechnic and university graduates their first permanent positions.
It will provide a 20% wage credit over the first three months of employment, covering the critical probation and initial training period. The government could co-fund 20% of their salary, with the payout capped at $1,000 per month. This ensures that graduates gain access to quality roles and structured training while the government offsets the initial costs of onboarding.
Targeting these wage credits at micro and small enterprises empowers these smaller businesses to offer more competitive wages, helping them compete for talent against medium and larger enterprises.
To address employers’ concern of young recruits leaving soon after being trained, the government could fund an additional 20% of a one-month retention bonus, to be paid out only on the first anniversary of employment.
I propose that this scheme be implemented for an initial three years, with a robust assessment of its effectiveness before any extension.
This scheme would complement the GRIT (Graduate Industry Traineeships) Scheme. However, while GRIT offers temporary three to six month placements, it does not guarantee the stability of full-time employment. This proposal encourages permanent hiring from day one. Crucially, while GRIT is limited to just 800 places, this wage credit could support a much larger portion of the 53,000 or so students graduating each year.
The Youth Wage Credit Scheme shifts the focus from temporary traineeships to immediate, stable SME employment. By incentivising permanent hires, it buffers against AI-driven displacement and ensures Singapore’s next generation enters the workforce with greater security and confidence.
