On foreign labour and the income gap: Acting in moderation or muddling through?

In a blogpost on 30 September, Acting Manpower Minister Tan Chuan-jin laid out some numbers to show that the growth in the foreign workforce is moderating. At the same time, he discussed the difficult balance that has to be struck between business anxieties about labour shortage and popular frustration over too many foreigners in Singapore.

Popular frustration takes three forms: (a) job competition, (b) crowding and infrastructure overload, and (c) cultural destabilisation. Different people would give a different weightage to these concerns. For this discussion however, I am going to focus on job competition alone.

While his figures might show a recent effort to slow down the rate of increase in the intake of foreign workers especially at the Employment Pass level, the five-year figures give us a better picture of what happened previously. Other figures that I have located for this essay suggest that productivity improvements — a matter Tan touched on in the blogpost too — remain elusive. Yet, important political issues like closing the income gap and keeping a check on the need for foreign labour hinge on productivity improvements, at least as far as the government’s dogma goes. Without achieving such improvements, when will we ever close the income gap?

The five-year picture

The minister provided a table of numbers, which though limited in scope is perhaps more information than his ministry has ever provided. This tells us how opaque the government has been previously. I have recast the numbers he provided in the table below. The figures for “Other Work Permit” and “Work Permit Subtotal” were not given in Tan’s blogpost, but were derived by me from his totals.

Employment Pass holders, which under current rules would mean those earning (this figure now corrected) $3,000 or more a month, grew 76 percent between December 2007 and June 2012.

S Pass holders — those earning $2,000 to $3,000 a month under current rules — grew 188 percent in the same period. There are nearly three times as many S Pass holders today as there were about five years ago.

Work Permit holders — those earning below $2,000 monthly — grew 23 percent.

The different rates of increase tell us why the issue exploded in the last few years. During the last five years, the numbers of foreigners grew most strongly in the same middle- and high-income job categories where Singaporeans aspire to be. Perceived job competition intensified.

Yet, if I present the absolute numbers graphically, a different picture emerges:

In terms of population  numbers, low-wage foreign workers far outnumber the Employment Pass and S Pass holders. It also suggests that low-skill Singaporeans have suffered from job competition from foreigners far longer than the middle- and high-income ones, probably since the 1990s. Yet job competition didn’t become a political issue until lately when the better-off Singaporeans began to feel the heat. This tells us something about the lack of political voice of low-income Singaporeans.

Separately, we can also infer that complaints about crowding and infrastructure overload are rooted the far larger numbers of Work Permit holders, not the other two categories.

Despite the explosive growth in the numbers of Employment Pass and S Pass holders in the last five years in percentage terms, their absolute numbers are not particularly large. My gutfeel is that most international cities such as Hong Kong, Sydney, London or New York, would have similar proportions of skilled and professional foreigners.

It may be argued that the graph understates the job competition for middle- and higher-income categories. Foreign competition does not only come from holders of Employment and S Passes. Many foreigners have also been given Permanent Residency status over the last few years, so the numbers in the table and graph above understate the real growth.

There may be some merit in that argument. There was an increase of 83,900 Permanent Residents over the same five-year period. See the table above (2007: 449,200 PRs; whereas in 2012: 533,100 PRs). However, we should also bear in mind that some Permanent Residents are dependents, and are not in the labour force.

Consider the unemployment rate

That Singapore continues to have a low unemployment rate for citizens and Permanent Residents tells us that if there is competition from foreigners from jobs, it is not so severe as to throw Singaporeans out of work. It is much more consistent with the argument that foreigners are needed because job vacancies remain unfilled.

Much harder to ignore is the argument that salaries have been depressed by the open door policy. Here I am much more skeptical about the government’s productivity mantra as a cure for this. I think they’re putting the cart before the horse.

The government is basically saying that wage rises should follow productivity increases. This is not how the real world works. Necessity being the mother of invention, job retooling that effect productivity improvements follows the pain of rising wages. Wages largely reflect the demand and supply of labour, and this is true of both unskilled as well as skilled workers. Productivity improvements are triggered when wages have risen to a level that makes investments in automation and process redesign cheaper than paying workers to do things the old way, or when workers simply can’t be found. Automation and process redesign is very hard to do and very demanding of management attention. Employers would put off doing this unless it gets really painful to avoid it any longer.

Tan Chuan-jin wrote in his blogpost:

Our tightening has certainly had an impact and is being felt by companies, but businesses are still expanding or being set up. This demand for foreign manpower is very considerable and many businesses remain prepared to pay the higher costs involved.

– Tan Chuan-jin on Manpower blog, 30 Sep 2012, Manpower realities: Beyond the numbers. Link.

If many businesses remain prepared to pay the higher costs involved, it means that costs are not high enough to push them to automate.

Thus, there is much merit to the shock therapy that Lim Chong Yah recently proposed. He said we should mandate minimum wage rises over several years to spur employers to invest in productivity improvements.

Flat productivity growth

The measure that economists use for productivity is called Total Factor Productivity. The formula looks very complex and I don’t know how to calculate it.

This paragraph added 12 hours after publication: At the time of writing, I couldn’t find (through using the Search function on the Department of Statistics’ website) any information on productivity year-on-year, but reader Gard has now pointed me to Table 4.14 of the 2012 Yearbook of Statistics. Link to the Labour and Productivity Section of the Yearbook. I reproduce the relevant table at left; click on the thumbnail. It’s a little bit frustrating because it only gives percentage change year-on-year. A better appreciation of trends needs looking at it over several years, at least an economic cycle. End of added paragraph.

Instead, here is a rough and ready indicator based on easily available data. Economists may laugh at my amateurism, but I think laymen will find it relatively easy to understand, and unlike the table from the Yearbook, I show you how the figures were derived. I have also anchored the ratio comparison on the same base year of 2007. We take the labour force numbers from the Ministry of Manpower for the mid-year points of five years, and the Gross Domestic Product in 2005 dollars (i.e. inflation has been stripped out). For each labour force participant, how much GDP was generated in each of these five years?


(table has been amended after error in previous table was pointed out)

As you can see, the ratio swings quite a lot from one year to the next, reflecting the economic cycle. But the disappointing thing is that in 2011, the average worker in Singapore produced only 1.5 percent more output compared to 2007.

The danger is that by being doctrinaire about its wrong-headed  model (wage rises should follow productivity improvements), productivity improvements will either not come, or come so slowly that the income gap simply doesn’t close. Unwilling to inflict enough pain on employers to compel them to invest seriously in productivity improvements, the government may never tighten foreign inflow sufficiently. We may moderate, but never truly break the vicious cycle of high inflow leading to depressed wages leading to no incentive to improve productivity.

Closing the income gap requires a complete reworking of the social model. It requires a re-examination of how we reward different kinds of skills and labour; it requires a critique of social status and the way we value it. It necessitates a re-carving of the economic pie. I have yet to see any interest in doing that.

A major theme running through Tan Chuan-jin’s blogpost is one of being circumspect and moderate as we deal with problems, balancing various interests. Normally, being middle-of-the-road has much to recommend it. But sometimes, this gets confused with the uncourageous route known as muddling through. When problems have arisen because in the past an extreme neo-capitalist position had been taken, then we should ask whether, to properly correct the ills that have arisen, we need to be a bit more extreme in the opposite direction, at least for while?

32 Responses to “On foreign labour and the income gap: Acting in moderation or muddling through?”


  1. 1 jack 3 October 2012 at 14:14

    There is something wrong with your ratio calculation to demonstrate productivity. You seem to be comparing with previous years instead of base year of 2007.

  2. 2 yawningbread 3 October 2012 at 14:18

    Oops, you’re right. I will have to amend it when I get home tonight. How embarrassing.

  3. 3 Jane 3 October 2012 at 14:19

    Precisely. Putting the cart before the horse. Many ministers do that, Tan Chuan Jin not excepted. What is required is for the 40% to enlarge its base, and remove those ministers with such mindset at the 2016 GE. Aljunied people has voted wisely and got rid of Ong Ye Kung. The next in line will be him and Chan Chun Seng.

  4. 4 oute 3 October 2012 at 14:41

    Right, how to increase productivity if you keep increasing the number of workforce available..

  5. 5 Rogueeconomist 3 October 2012 at 16:11

    One might note that employment statistics don’t tell the full picture (in Singapore or anywhere else in the world). Unemployment is a statistical concept generally defined by a respondent to a labor force survey, who says that they are looking for work, but unable to find it, and who has been doing so for a defined period of time. The exact statistical definition varies from country to country but the above is not too far wrong anywhere in the world.

    Unemployment is high in many countries in part because unemployment benefits are explicitly linked to the state of unemployment. That is, you do not get unemployment benefits if you embark on any work, including part-time work, commission work, self-employment, etc. Hence there is a great incentive to not just be unemployed (until a good job comes along) but also to report oneself as being unemployed.

    Singapore has no unemployment benefits. Hence there is absolutely no advantage to claiming one is unemployed. Indeed if anything there is a strong stigma against reporting oneself to be unemployed. And it makes sense that people would – as soon as possible – take on part-time and commission work such as being insurance agents, real estate agents, tuition teachers, taxi drivers, sales assistants, etc, if they lose their jobs.

    The question therefore in Singapore’s context is the state of under-employment (people holding jobs below their true capabilities) and the extent to which that may be affected by job market policies.

  6. 6 Chanel 3 October 2012 at 16:46

    “When problems have arisen because in the past an extreme neo-capitalist position had been taken, then we should ask whether, to properly correct the ills that have arisen, we need to be a bit more extreme in the opposite direction, at least for while?”

    Alex,

    1. You hammered the nail squarely on the head with your concluding remark.

    2. The government has injected companies the “heroin” of unlimited cheap foreign labour for the past several years. Now that companies have become hopeless addicted to the “drug”, the same government is using the lame excuse of pegging future wage increase to productivity gains to keep injecting the “drugs”. The reality is, some companies should not be operating in S’pore in the first place. Companies that rely heavily on cheap labour (for which S’pore can never compete against the neighbouring developing countries) are a prime example. Introduce even more cheap foreign labour and S’pore might see the return of mosquito coil manufacturers!!

    3. You forgot to mention the newly minted citizens during the past few years. Most people in this group should rightly be considered “foreigners”.

  7. 7 Tsumujikaze no Soujutsu 3 October 2012 at 19:49

    I think the biggest problem lies in the fact that there’s a difference between SMEs and MNCs. The former has to balance the budget while the latter case won’t have such a hassle. Simply put, the SMEs need these foreign labour far more than the MNCs, who can just opt to forgo it. I agree with Rogueeconomist when he mentioned “underemployment”. I believe this is the biggest problem on the wage structure right now. Imagine a person doing a work far beneath his qualifications. This can be imaginable once we start to do the balancing game on the stats.

    Lim Swee Say’s suggestion in this context will only be a moot answer and nothing more. Idealistically, Lim Swee Say’s suggestion will have that possibility of success if the people affected are indeed lower skilled. Sadly, reality might have painted another picture.

    P.S: I might sound like a pro-PAP apologist despite my apolitical nature, but Tan Chuan Jin doesn’t work for himself. No one would be that daring anyway. Xun Yu of the Three Kingdoms era tried that stunt before and guess what’s Cao Cao’s reaction?

    • 8 dennis 3 October 2012 at 22:50

      Would you mind enlightening the readers like myself who is not familiar with Romance of 3 kingdoms story. What’s Cao Cao reaction and what happen to Xun Yu?

    • 9 Png Kiok Khng 4 October 2012 at 10:36

      I would disagree that MNCs won’t need to balance budget. Most MNCs are publicly listed and thus have enormous pressure(might even be more than SMEs) to watch the bottomline. The need for cheaper labour applies to both SMEs and MNCs.

      • 10 yuen 4 October 2012 at 13:24

        there is a difference: MNCs can choose to site their factories and offices in low labour cost countries, while SMCs have more limited options

  8. 11 Gard 3 October 2012 at 19:52

    The Ministry of Trade and Industry regularly publishes analysis into Singapore’s Total Factor Productivity (or productivity, for short).

    For example:
    Singapore’s Productivity Puzzle:
    Estimating Singapore’s Total Factor Productivity Growth Using the Dual Method
    Source:

    http://www.mti.gov.sg/ResearchRoom/Documents/app.mti.gov.sg/data/article/23504/doc/FA1_3Q2010_ESS.pdf

    Productivity is an indicator sensitive to cyclical shocks, so economists prefer to examine the data over multi-year periods to smooth out short-term fluctuations. Nonetheless, the Yearbook of Statistics publishes productivity statistics on a yearly basis, Section 4.13 on the Yearbook 2012.

    The fact is, even if the amateur Singaporean know how to compute productivity, there is still the missing ingredient: capital stock data. MTI economists would be able to note that insufficient capital stock relative to labour input is a contributing cause of low productivity growth in recent years.

    Now, labour productivity is normally computed as GDP over employed persons. Labour force is the sum of employed and unemployed persons.

  9. 12 Rubicon 3 October 2012 at 20:48

    Two other category of people who can work are: students and dependents of PRs. It is not clear what “Other work permits” refers to.

    Stephen Lee, President, SNEF:
    “The lead of the productivity movement is squarely on the shoulders of management. Management must take the lead to push productivity. Workers can be ready – they say okay, tell me what to do – so management must come up with schemes, plans and practices to lead the productivity movement. At this moment, not enough companies are taking the lead, and not enough management are taking the active lead in pushing for productivity. [ST, 2 May 2012]

    Labour MP, Zainal Sapari, also the head of the NTUC unit for low-wage, contract and casual workers:
    “Employers… must pay wages according to the level of productivity that they want the workers to perform. If the salary is low, it’s very, very difficult to motivate the workers to improve their productivity”. [ST, 2 May 2012]

    I remember Ho Kwon Ping and Prof Tommy Koh commented there is a limit to productivity increase. Prof T Koh quoted as example the tea lady in his office. How much can her productivity rise?

  10. 13 sporescores 3 October 2012 at 21:41

    You mean we can’t keep growing our economy forever just by continuing to import more and more workers? Mathematically there must be some way to approach that infinity number. Physically by layering MRT lines and roads on top of one another, and by building taller skyscrapers and maybe even stacking buildings on top of one another. It has to be done. This is the only growth formula that we know.

  11. 14 sporescores 3 October 2012 at 21:50

    Alex, the minimum salary required for Employment Pass is $3,000 under pass type Q1. Your statement “Employment Pass holders, which under current rules would mean those earning $4,000 or more a month” is not correct. $4,000 is required only if the Employment Pass holder wants to sponsor the stay of their spouses and children here:

    http://www.mom.gov.sg/foreign-manpower/passes-visas/employment-pass/before-you-apply/Pages/default.aspx

    • 15 yawningbread 3 October 2012 at 23:25

      Thanks for pointing this out. Very strange to see myself making this mistake because I knew this, but somehow I used $4,000 in the original version of the text. Must be from typing late into the night.

  12. 16 Void Decker 3 October 2012 at 23:07

    I wrote on this same topic just yesterday for anyone who cares to read: http://www.voiddecker.com

    You can find Singapore’s TFP numbers from the Conference Board website, under the Excel download “Total Economy Database™, Growth Accounting and Total Factor Productivity Country Details, 1990-2011″

    http://www.conference-board.org/data/economydatabase/

    I have seen local MSM citing this as their source as well. And the numbers plotted out looks like they match MTI’s graphs.

  13. 17 Anon uE33 3 October 2012 at 23:16

    “That Singapore continues to have a low unemployment rate for citizens and Permanent Residents tells us that if there is competition from foreigners from jobs, it is not so severe as to throw Singaporeans out of work.” — If foreign immigration doesn’t seem to result in unemployment, does it result in under-employment? e.g. Singaporean PME becomes a taxi driver

    • 18 yawningbread 3 October 2012 at 23:41

      I’m not convinced that “under-employment” is a robust enough concept. How do we judge what constitutes underemployment? If you say so-and-so is a PME, you are suggesting that he deserves a certain pay level as a matter of right. But maybe he was incompetent at that level, so what he is now earning as a taxi-driver (assuming that is less than what PMEs earn) roughly equates to his competency level. His contribution to the economy measured by his value-added is then about right.

      Alternatively, if as a taxi-driver, he is earning more than the average PME, would you still say he is underemployed?

      One may argue that university graduates ought to be doing work that uses their educational capabilities. If they do not, then they are under-utilised, a description that slips into “under-employed”. Even here I find the concept problematic, with more than a dollop of elitism. Some graduates may have the paper qualifications, but having been a boss over graduates and post-graduates I can tell you that some of them, in real life, are duds. Their paper qualifications mean little when it comes to producing value. Their subordinates, who don’t have the same qualifications, turn out to be more valuable and innovative than them.

      Another problem I have with that is that lots of people end up in careers or fields that have nothing to do with their school courses. One well-known guy who trained as a lawyer went on to head a hotel chain. Others who have trained as mechanical engineers spend most of their careers as civil servants. How would one judge if they are under-employed or not?

      • 19 Rogueeconomist 4 October 2012 at 00:28

        Under-employment is, as you say, very difficult to judge. So that is why it’s not tracked anywhere, in contrast with employment statistics. (although employment, as I mention, is a statistical concept that is significantly affected by social policies).

        However, it’s worth noting that our local educational system is based on the notion (in my opinion problematic) that policy makers can forecast demand in different industries and graduate the appropriate number of trained workers in response. That is, we aim to produce the right number of engineers, accountants, etc, to meet projected industry demand.

        So policy makers do believe that there is such a thing as appropriate employment. (It really screws up their manpower projections when, say, a whole bunch of engineers goes into finance instead of engineering!) That said, I’m not sure how successful any policy maker could hope to be at doing this – after all, their own policies have undone some of their manpower plans (e.g. the recurring shortages of lawyers and doctors now, due to higher than projected populations and immigration policy). Not to say anything about the problems of backing certain industries through focusing education in that area when market forces can change beyond our expectations by the time students graduate.

        Anyway. I think (though I acknowledge more evidence would be needed) there is significant underemployment. As for how to define it, well, in the abstract sense it would consist of people being mismatched to jobs in such a way that there are mutually beneficial better matches out there.

        In fact, this is a key economic benefit of unemployment insurance systems. By giving people more time to find better matching jobs, they potentially enhance aggregate efficiency, compared to the case where lack of benefits forces people to take the first job that comes along.

      • 20 Png Kiok Khng 4 October 2012 at 10:53

        Ministry of Manpower does have definition for underemployment, which covers 2 categories: (1) the part-timers/contract workers and (2) fully employed.

        Department of Statistics provides numbers for the first category but not the second.

      • 21 Rogueeconomist 5 October 2012 at 01:59

        @Png Kiok Khng: Underemployment as defined by MOM (in accordance, as they note, with international statistical guidelines) is defined as workers who are currently employed, but who wish to work additional hours (and are unable to do so). However, that doesn’t say much about labor market mismatches and the like. (e.g. a PMET in a ‘2nd career’ as a taxi driver because they can’t find a job as an engineer)

        Thanks for the note to check out the MOM definitions of underemployment!

        http://www.mom.gov.sg/statistics-publications/national-labour-market-information/understanding-statistics/Pages/mrsd-indicators-faq.aspx

      • 22 Chanel 5 October 2012 at 11:24

        The best test of whether S’pore has under employment issue is the sharply turn off the free inflow of foreigners.

      • 23 Chow 5 October 2012 at 19:18

        I suspect that there still will be insufficient Singaporeans to fill the jobs. Not for want but because of a skills mismatch among others. Somebody in the government said to the effect that their policy is to bring in the MNCs first and then try training/educating Singaporeans for the job. In the meanwhile they will bring in foreigners to fill in the gaps. Sorry, I can’t remember who said it or where online I read it but once I find it I’ll post the link…

      • 24 Anon ue33 8 October 2012 at 22:30

        Hi Alex, I agree with you that under- employment is a broad term, and that it is elitist to judge one’s productivity based on education level. What I am concerned is that a cheaper skilled foreign worker may displace a more productive Singaporean worker who is more expensive to hire, who then gets re-hired in a less skilled job.

  14. 25 Png Kiok Khng 4 October 2012 at 10:26

    With regards to dependents of PR, technically it is not true that PR dependents are not in the labour force. Unlike foreign spouse of Singaporeans, PR dependents are allowed to work and is not limited to work that require skillsets Singaporeans lack and willing to do.

    With regards to thhe statement “Singapore continues to have a low unemployment rate for citizens and Permanent Residents tells us that if there is competition from foreigners from jobs, it is not so severe as to throw Singaporeans out of work.”, I would like to point out that unemployment within Singapore’s context is not an issue currently but underemployment of the fully employed is.

  15. 26 henry 4 October 2012 at 12:55

    We prostrate ourselves to businesses, regardless of SME or MNC.

    This philosophy began decades ago when Texas Instruments started at Kallang. All government agencies worked madly just to accede to their requests from power supply to construction of the building and also the supply of manpower. Many corners were cut, and shaved, even outright illegal steps taken.

    It stays with us today and is evident at Marina Bay Sands, F1 racing etc.
    Spectacularly business friendly. And our local businessmen are up to their necks involved in this. Why not?

    All local business associations, chambers will never ever support higher wages. So the Tripartite arrangement is 2 against 1: Employer and Government against the Union ( employee ).

    Productivity? its just a smokescreen. A concept far beyond the comprehension of even qualified economists, yet presented to employees as the antidote for all their wage ills.

    Meanwhile, back in the bat cave, Joker, Robin and Batman enjoy a bottle of their finest wines. Laughter could be heard through the Mansion.

  16. 27 TopSage 4 October 2012 at 16:01

    Sorry I’m not very well educate and English is not good. Just want my views heard.

    You don’t see SMEs in other advanced country asking to import cheap foreigner labor to grow. 10 yrs ago Google was an SME. 10 yrs ago Facebook was an SME. They don’t depend on cheap labor to succeed.

    Singapore SMEs that use cheap foreign labor from Vietnam, China, India become no better than the SMEs in those countries – they become same-same like the thousands upon thousands of SMEs there. We want Googe, Facebook not crappy companies doing low end services but hogging our precious space. We want innovative + high productivity industries.

    Worse is the BIG BUSINESSES using cheap foreign labor – these translate to pure profit margins. Big businesses already have economy of scale and monopoly power why do they need hire cheap foreign labor.

    Even more stupid are the lucrative casino and banking businesses that acquire license to make easy money why are these allowed to hire foreigners – these special licenses guarantee there is limited competition, hence high profits, why allow the to hire foreigners instead of Singaporeans (with exception of a handful of top management). So stupid right, the grants special access to these sectors of our economy, it is mindless for govt not to translate the full benefits to Singaporeans. Which bank or casino will refuse to come here unless they are allowed to employ foreigners? The PAP has something against average Singaporeans to deny them all benefits? This is a govt that does not compete fairly at elections and uses unfair tricks to win such as upgrading carrots – yet it is so eager to subject Singaporeans to unfair and unnecessary competition.

    You want to support this PAP govt? They don’t even care if their policies and governance benefit you!

    I have a blog : http://sgordinary.blogspot.com a blog with stories about ordinary Singaporeans.

  17. 28 deheuty@yahoo.com 4 October 2012 at 17:30

    Sorry, but how does the data show that the influx of foreign workers is being moderated? I don’t see it.

    The first table in your article displays the figures in annualised terms BUT the last one is for 6 months. The growth rates are similar – this can be seen is the graph that was produced in this article later; notice that the *slope* of the line has the same angle from Dec 2011 to June 2012, which shows that rate of foreign worker influx to have increased since Dec 2011 and maintained till June 2012 (work permit and S Pass lines). This is what others like Leong Sze Hian (TOC) have concluded as well.

    Does TCJ know how to parse data? He looked only at EP, which did not increase, can concluded that FT influx has been moderated when EP constitutes only ONE means by which foreign workers flow into Singapore? Omg, how naive is that?

    • 29 yawningbread 4 October 2012 at 18:21

      Which was precisely why I drew the line graph :) So readers can see for themselves what “moderation” there is.

      However, to be fair, let me quote this paragraph from Chuan-jin’s blogpost (link was inside my article) justifying the claim of slowing intake. He said:

      QUOTE
      Overall, the growth in foreign manpower (excluding foreign domestic workers) in the first half of 2012 has slowed to 34,100, which is lower than that of 36,800 in the first half of 2011. The slowdown in growth of foreign manpower in sectors other than construction is more obvious: 18,600 in the first half of 2012 –about 40% lower than the 31,200 in the first half of 2011.
      ENDQUOTE

      Since those numbers for first half 2011 were not inside his table, nor split by categories, I couldn’t include them in mine either.

      • 30 james 4 October 2012 at 21:01

        That is why the straits time never produce any graph. They just want to confuse you since they cannot convince you. Notice how they pluck figures from the air to make a conclusion, like how the “economist” from NUS claim that housing price is cooling.

  18. 31 dolphin81 5 October 2012 at 07:33

    BG Tan , who spent 24 years the army, had a hard time trying to understand the mess left behind by his mentor, ESM Goh Chok Tong.

    The S Pass increase is not surprising. The fact is that for the past 15 years, the foreign talent policy was largely a form of indirect cheap labour.

    eg paying SGD 2500/month for a foreign PMET when the then prevailing market rate was SGD3000.

    SGD2500 is not cheap labour in the absolute sense but it is one when compared with SGD3000

    It will take years of commitment to reverse the trend for any labour reforms to work.

  19. 32 liu 5 October 2012 at 23:30

    I have noticed that the govt has fixed the minimum working hours for salary below 2000.This I feel will sustain employer need for foreign needs as foreigners are more willing to work longer hours to supplement their income.Thus employer will not see a need for productivity rise as they can rely on foreigners to work longer hour


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