Monday, September 10, 2012


Sep 10, 2012

Employers, speak now or pay the price

The debate on foreigners has been too one-sided, with citizens grousing about there being too many foreigners. Employers need to speak up on the impact if the tap is overtightened.
By Leslie Fong For The Straits Times

HERE is a provocative suggestion - roster every HDB household to do estate cleaning at least once a month.

I offer it only half in jest, after reading in The Straits Times last Thursday that the management committee of Braddell View estate had called for volunteers to help clean up the precinct. Apparently, the ongoing curb on employing foreign workers had resulted in poor service by the fewer cleaners left behind to do the job, despite a 30 per cent hike in their fees.

I understand the committee's desperation - but volunteers? Is it serious? Let's get real.

Its only option, apart from jacking up cleaning fees sky-high, is to try compulsion via rostering. But that is bound to set HDB residents screaming blue murder, so loudly that even Johor Baru will hear them. They will protest that they are already paying for cleaning, and therefore do not see why they should be made to go sweep corridors, void decks and so on. I bet they will not be persuaded even if, in return, the cleaning fees they now pay are waived.

It should be obvious that no estate management committee or town council will ever contemplate so politically suicidal a move as to force residents to get to work with their brooms and mops.

Then why suggest it?

Well, my hope is that it will prompt enough readers to pause and ponder the point I am trying to make, which is that this country needs foreign labour to keep it going.

Life as Singaporeans have lived it will be a lot more expensive and uncomfortable without foreigners doing the dirty or menial jobs they would not dream of doing.

Not true? Just think for a moment what would happen if it were possible to arrange for all foreigners employed here to stop work for a month. Utter chaos will follow. There will be few Singaporeans to collect rubbish, build flats, lay sewerage pipes and power lines, drive buses and trains, provide nursing care and other support services in hospitals, keep factories, shops, restaurants, hawker centres and so on in running order... the list goes on.

And I have not even mentioned maids.

Some quiet reflection on this bleak scenario will get more Singaporeans to appreciate the presence of foreign workers than the "Immigration Bonus" proposed by three academics. In their opinion piece in The Straits Times on Aug 8, researchers Yolanda Chin, Norman Vasu and Nadica Pavlovska from Nanyang Technological University argued that money can be raised from levies on foreign workers, and then distributed to citizens as a tangible benefit derived from Singapore's open-door immigration policy.

Without putting too fine a point on it, what they are advocating is using money raised from taxing the blood, sweat and tears put in by foreign workers, albeit paid by their bosses, to appease the anti-immigration lot. I would call that bribery.

That notwithstanding, the bonus idea will not work because, as bribes go, whatever amount that is ultimately distributed to every citizen is likely to be so paltry as to invite derision rather than the desired appreciation.

What I find even more unsettling about their proposal is the underlying message of appeasing those strident voices who have been clamouring for a clampdown on admitting foreign workers and who appear to have hijacked what should have been a calm, rational debate on an issue of grave importance to the economy and lives of all Singaporeans.

As it is, these vehement voices have succeeded in some measure in pressuring the Government to tighten the issuing of work permits and employment passes to foreigners, often to the detriment of businesses already reeling from the worldwide economic downturn and the greed of local landlords. Thus emboldened, they can only get more rabid.

This is why I feel compelled to write to remind the powers that be that there are others in Singapore who look askance at the sweeping demonisation of foreigners by those who, for whatever reasons, are ever eager to blame immigration for everything that is not going right, from crowded trains to escalating property prices.

More to the point, I fear the cascading effects on the economy of businesses forced to scale down or close altogether because they cannot find sufficient workers.

Yes, the influx of foreign workers has been at a pace the infrastructure cannot cope with - but must the swing to the other end of the pendulum be halted only after enough Singaporeans have been thrown out of their jobs because their companies just cannot carry on or have decided to relocate elsewhere? I am sure I am not the only one worried about the choking effect of a drastic cutback in much-needed foreign labour.

I expect this rejoinder: Businesses should automate, raise productivity and pay better wages to get Singaporeans, rather than rely forever on cheap foreign labour. And I say yes, I agree - but up to a point.

Some jobs just cannot be automated or re-engineered. It is hard to replace chambermaids or hospital attendants with machines, and there is a limit to the productivity that can be squeezed out of them. An attendant trying to push two wheelchairs at the same time is not more productive, but a menace to his patients' safety.

Pay more, sure, but how much more without adding substantially to higher prices for all? Let me illustrate with a real-life example.

I know of a supermarket chain at its wits' end trying to recruit Singaporeans to man its checkout lines. It tried all possible avenues, including organisations helping former convicts and disabled people. In a recent exercise aimed at hiring about 60, a grand total of two Singaporeans accepted. One quit after three days, not bothering even to collect his wages.

How much does it pay a checkout line cashier? A basic monthly salary of $1,200. Well, why not $2,000, an increase of 67 per cent? That should attract enough Singaporeans, no?

Assuming that is so, a mini- mart with five checkout lines needing 12 cashiers to work two shifts seven days a week will be looking at a hike in cost of $145,000 per annum (including Central Provident Fund contributions). The biggest store in this chain needs 90 cashiers for two shifts.

And that is not all. There will be a knock-on effect. The supervisors of cashiers will have to be paid more, as do the junior managers. And so up the line it goes. It does not take a genius to figure out that the supermarket chain will have to pass on the increased cost to consumers, who then have to pay more for groceries.

This will be the scenario played out at every business that cannot get enough local workers either because they find the salaries offered too low or, as is often the case, they do not want those jobs at all.

Hence while I accept that too easy an access to foreign labour does press wages down for Singaporeans at the lower rungs of the ladder, I caution against reaching for easy answers like clamping down on foreign workers across the board or forcing wages up with nary a thought about the impact on inflation and Singapore's competitive advantage.

In this regard, Singapore is caught between a rock and a hard place, largely because its citizens have not been reproducing themselves adequately, whether as a result of a too-successful family planning programme in yesteryears or a lifestyle choice in more recent decades.

[I don't disagree that we need to replace ourselves, but we are not going to be content with our kids being cashiers or cleaners or construction workers. Even if we had responded to the call to raise the TFR in 1984, it would only be about 10,000 more babies born in 1985 (assuming there were enough maternity beds, and nurses), and they would have just entered the workforce about 2 - 5 years ago. I do not see how the 50,000 or so extra Singaporeans (the extra 10,000 each from 5 cohorts), would have made a dent in the 1.3m foreigners now working in Singapore. The fact is even if we are raising our TFR, we would still be short of workers, and we would still need foreign workers.]

Collectively, all have contributed to the severe shrinkage of the indigenous workforce, including the ones who have been agitating the most against the employment of foreigners to make up the shortfall.

That is water under the bridge.

Until the happy day when Singaporeans produce many times more babies than they do now, the country will have to continue to grapple with balancing the inflow of foreign workers with moves to improve the lot of low- wage groups.

The debate should be centred on how many foreign workers are too many, not just shutting them out. Is the existing "too many" really too many if not enough Singaporeans are willing to fill the jobs those "too many" are doing?

And therein lies the problem - there is plenty of sound and fury but not enough data in the public domain on how many jobs in which sectors are going a-begging, and whether employers really have no choice but to fill them with foreign hires.

Thus far, only one side of the story has been ventilated - loudly, sometimes belligerently. The employers have not been heard enough.

If they - or whoever else has done the hard calculations on what the clampdown thus far has or will cost their businesses and Singapore's economy - do not speak up, then they will lose the debate.

And all of us will have to pay for it.

The writer, the former editor of The Straits Times, is the senior executive vice-president for marketing at Singapore Press Holdings.

1 comment:

Unknown said...

The current foreign workers policy takes the easy populist approach for a blanket restriction instead of showing any true thought leadership in formulating the right policy. MOM should study on what jobs Singaporeans are best suited for and to cater the policies to “deliver” these jobs to Singaporeans instead. Current policies is skewed to preserve low-end jobs for us instead. We have a first class education system and a highly educated labor force that is best suited for high value-added roles. A more tailored policy is needed and not a blanket policy across the board:

(1) Exemptions from the foreign worker quota on first 10 employees

Very useful for the survival of the SMEs, especially companies starting out in their early years. The first 10 or so employees are generally in low-end manual tasks jobs, not the kind that Singaporeans should specialize in. MOM’s argument for automation is not applicable here as these basic manual roles that cannot be economically replaced at the huge cost of automation.

(2) Dependency ratio (DR) should be tiered:

(a) Lower DR for lower paid jobs and higher for higher paid jobs, instead of the opposite currently (i.e. high DR at WP / S-Pass levels but ZERO restriction at E-Pass levels). Current system seems to encourage hiring Singaporeans for lower paying jobs and foreigners for higher paying jobs!

(b) The DR should be highest for jobs that Singaporeans are best suited for.

(c) Dependency ratio should be higher for larger companies. This will be fair as SMEs starting out should be given supports to grow; and once the company is large enough, it should then bear a higher burden to support the local labor market. Also MOM's argument to automate will become applicable for these larger companies that have the economies of scale to justify the cost of automation. The same cannot be said for SMEs that have yet to achieve the economies of scale needed.

(3) Higher DR to apply for foreign companies / companies owned by foreign shareholders

For foreigners to set up here and benefit from our infrastructure, it is only fair that they ensure maximum employment of our locals rather than to “import” their expatriate workers here. This concept is similar to current tax system where foreigners are taxed differently from locals.

(4) Exemptions to apply at the highest level to ensure Singapore remain an open economy to attract the crucial talent for the continued growth of Singapore’s economy.

The Govt repeatedly argued that it crucial for Singapore to continue to attract foreign talents to ensure continued growth of our economy. This is very valid point. Therefore, the foreign worker quota should not apply at the very high salary jobs (e.g. above $8,000 pm). Singaporeans who at these levels are already more than capable to compete on equal grounds with global talents; and furthermore the benefits from ensuring the best candidates to fill these jobs will far outweigh the costs when it comes to jobs at such high level.

These are just some general ideas to better structure the foreign manpower policies. As our Government is filled with very intelligent people with impressive academic background and experience, I am sure they should be able to come up with a more comprehensive policy to truly deliver on the true objective here. Perhaps it is time that they show some thought leadership in formulating policies rather than not merely to adopt the simple populist approach that only pay "lip service" to the demand of the people but fall short on delivering the true outcome that we Singaporeans want.