Wednesday, February 6, 2013

Extract from Gerald Giam's parliament speech - WP alternative population projection

[Taken from WP website.]

6 Feb 2013
"We will target to increase our local labour force growth by up to 1% per year from now until 2030. We should strive to keep our foreign labour force constant between now and 2020, depending on our success in growing the local labour force. It does not mean that we shut the doors to foreign workers. Instead, new work passes will be issued only to replace expiring work passes or to supplement shortfalls in the local labour force. Companies will have to find ways to hire more Singaporeans.

["Companies will have to find ways to hire more Singaporeans." Wow. Good thing WP tell those companies to hire more Singaporeans. The PAP tell them, they won't listen one!]

How will we grow our resident labour force if the number of new entrants is not increasing due to declining fertility trends? One way would be to increase our labour force participation rate, so that more residents of working age are encouraged to work. The Labour Force Survey 2012 found that there are 418,000 economically inactive residents of working age, of which 90,000 are willing to work. This is a valuable pool of labour that can be tapped."

[This would be funny, if he weren't serious.

Firstly, I don't think he truly believes this scheme of his will work, or he won't have built in a "back door" or "escape hatch". Notice he says,
"It does not mean that we shut the doors to foreign workers. Instead, new work passes will be issued only to replace expiring work passes or to supplement shortfalls in the local labour force."
"To supplement shortfalls"... that is EXACTLY what the PAP says they are doing. Giam is basically saying, "I have a plan that is DIFFERENT from the PAP's plan! We will make do with FEWER foreign workers... UNLESS we need more. We will depend TOTALLY on local, resident labour... UNLESS there isn't enough, THEN and ONLY THEN will we allow MORE -- oops, sorry -- more foreign workers... BUT only as a last resort."

OK, let's take his words at face value (most of you were). How does he propose to grow local labour force by 1% per year? Simple. Increase Labour Force Participation Rates!

How does this work?

He tells us, there are 418,000 economically inactive residents of working age, of which 90,000 are willing to work! Wonderful. So how many do we need?

Er... he doesn't say. I think we suppose to guess. Or assume all 90,000 or all 418,000 are going to be recruited to work.

Okay, no problem. We can work this out. We are products of a very good education system and we can solve word problems.

First, what is 1% of our local labour force?

He also didn't say.

Fine, we shall look it up on the internet! 

And we find that our labour force in total is about 3.3m HOWEVER, this is the whole labour force. What is the local labour force. In the table Giam handed out in Parliament (and which is linked in the transcript of his speech on the WP website) he states that the residents or locals make up 63% of the total labour force. So of the 3.3m, only about 2m or 2.1m are locals. 

So 1% growth is about 21,000 locals. We just need to get 21,000 more Singaporeans to work every year! With 90,000 willing to work, that is easily 4.5 years settled. In fact if you assume that each year, these 90,000 willing to work but economically inactive were to increase a little, we can assume that it is closer to 100,000 over 5 years, and we have a 5 year supply of 1% increase!

Then after that, we will still have 328,000 (this is 418,000 - 90,000) "economically inactive" to put back into the labour force. At 21,000 per year, this 328,000 could easily last another 16 years!

Problem solved! QED!

Or is it?

Giam did not address two basic issues.

First, why are these economically inactive people, economically inactive?

OK, 90,000 of them want to work. Let's assume for them, it is JUST A MATTER OF TIME before they get a job. Let's assume that they are in transition between NOT wanting a job, and GETTING a job.

What about the 328,000?

Economically inactive can mean many things. They could be injured, sick, disabled and so cannot work. They may have mental or emotional issues that render them unemployable. They may be in prison or in drug rehabilitation centres.

Come on! They can't ALL be that bad!

OK. Good point. Try to be more positive. Actually, most economically inactive people are so because of family duties - housewives or homemakers looking after their children, or family members looking after the aged, or the infirm. Or they are studying.
In other words, they are economically inactive for VERY GOOD reasons. 

And those VERY GOOD reasons will prevent them from joining the labour force.

The second issue that Giam did not address is, what jobs can the Formerly Economically Inactive (FEI, - assuming they were all just lazy bums lounging about the house waiting for Mr Giam to rouse them to economic activity!) do? We need LOTS of medical services personal - nurses, attendants, nursing aides, and medical or clinical technicians. Are these FEI qualified to do the job? No?

WELL good thing Mr Giam left that back door open to hire foreign workers to do the jobs FEI are unqualified to do.

Wait a minute (you say), some of the FEI were caring for the elderly and the sick. They would be as experienced as any health or medical attendant!

No. Actually, I said, assuming that they were all just lazy bums... etc. etc...

But ok. Let's say they were looking after a sick family member. Even so, it is arguable that their experience caring for the sick family member is relevant (they would be experienced to care for the specific infirmity or medical problems their elderly family member has, but they are not trained for all healthcare or medical procedures, but I'll just let that go for now and assume that there is a crash course to bring him or her up to speed on qualification). But say they enter the workforce. What happens to the family member they were caring for?

I know! We can hire a foreign worker to care for the elderly and infirm family member!

And that is why his suggestion is so laughable. Except in all seriousness, he believes it is a viable alternative option!]

1 comment:

El Lobo Loco said...

Singstat labour participation rate time series.

Our participation rate is already 66.6%, with 76% male and 58% female participation rate.

Our rate has been going up, even though worldwide, the rate has been falling.

China has a higher rate than SG, but our level of development is different, and even china's rate is falling.