Tag Archives: Labour Market

My reply to: “Tan Chuan Jin: Efforts to reduce number of foreign workers on the ‘right track’” on Temasek Times

Manpower – Stay Calm and Think Rationally

Of late, there have been a number of articles and news pieces on manpower, employment and the economy. The statistics and information presented paint a bright, yet somewhat bleak picture of what lies ahead for our beloved country.

Employers in Singapore are hiring to fill new positions and they are still looking to fill vacancies arising from staff turnover, yet SMEs are having a difficult time recruiting Singaporeans for middle management and professional positions. The Association of Small and Medium Enterprises (ASME) has acknowledged that the availability of cheaper (not cheap) foreign labour has resulted in wages levels (or salary offers) stagnating at less-than-desirable levels.

The Ministry of Manpower has reduced the growth of foreign manpower population, and have committed to reducing the foreign manpower figures further. This is taking place amidst a global slowdown and a time of uncertainty, and companies are hoarding foreign workers in anticipation of further foreign manpower quota reductions, thus risking the viability of these firms in the short to medium term. In case you’re wondering, the Purchasing Manager’s Index just shrunk, and this means the orders for locally produced goods are shrinking.

The Prime Minister has announced that two existing institutions, SIM University and Singapore Institute of Technology, will be converted into full degree-awarding universities to accommodate the rising aspirations of Singaporeans. This is in addition to places at NUS, NTU, SMU and SUTD. Bear in mind, there are other degree pathways available – Lasalle College of the Arts offers degrees validated by Open University and Nanyang Academy of Fine Arts offers degree completion pathways with Essex University. Curtin University, James Cook University and SP Jain Centre of Management have opened campuses here. Specialist institutions like Singapore Aviation Academy and the Air Transport Training College are co-organising degree courses too. Let’s not even talk about the private institutions.

Minister in the PMO (with or without portfolio, it doesn’t matter) has pushed for cleaners to earn at least $1,000 per month. This is happening while hawkers are complaining about higher hawker centre fees, PM Lee has warned that food prices (raw food supplies) will rise and Singaporeans are still eating the same amounts as they used to (or more). Mr Brown’s favourite bak chor mee may soon cost more.

We look at these occurrences and we all know that these are the changes that Singaporeans (if not all, then at least a “majority”) are seeking. But this may not be the best way forward for all of us.

If we cut back on foreign manpower in the wrong areas, we risk losing SMEs that rely on foreign manpower to do the jobs that Singaporeans would not want to do, either because of the low wages or other employment considerations. And if we artificially inflate the wages of our local workers, we will price ourselves out of the global markets. I am pro-Singaporean, but I think we, as a people, need to be careful what we wish for. There is only so much our Government can do, only so much this little red dot can influence, and if we screw it up, we are going to be in a heap of trouble. And by that, I mean shitloads.

At the same time, companies must look at paying what Singaporeans ought to be paid, rather than what the other guy is asking to be paid. If a foreigner is willing to accept a salary of $1000 per month, while a local chap is asking for $1,500, we should take the local’s offer and make sure he / she delivers $1,500 in value every month (excluding CPF). Profit is not the only thing that matters. A business model that relies on the assumption of continuous and infinite supplies of cheap foreign labour is not a sustainable one, and we should not support such businesses.

Increasing university places may look like a good idea. But the transformation into an economy where the majority of jobs are designed and salaried for graduates will not come that easily. We should be prepared for the eventuality of a graduate-heavy economy, but we must accept that for the first decade or so, as the industries move toward a knowledge and productivity-based economy, Singapore will see high rates of under-employment. This means that you will have graduates sitting on diploma-holder positions as these companies begin to re-structure the work their employees do so that graduates can sit on graduate jobs (and Herman Miller chairs) in the long run.

Singaporeans need to consider what they are asking for carefully. We live in a globalized world, a globalized economy. Not everything is a matter of the Government’s will or doing. Some of it is a bitter truth.

– Posted 3 Oct 2012 on Temasek Times

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