The myth of the reluctant Singaporean worker

February 13, 2013 by
Filed under: Current Affairs and Politics 

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Written by Ng E-Jay
13 February 2013

Every time the government proposes slowing down the rate of intake of foreign labour so that the economy and society can adjust, we have businesses, notably members of the Singapore Business Federation (SBF), claiming that any such move would hurt them immeasurably.

Just yesterday, the Restaurant Association of Singapore (RAS) urged the government to re-assess curbs on the inflow of foreign workers, failing which they will face what they term “dire consequences“.

They even bombastically claimed that Singapore risked losing its reputation of having a vibrant food and beverage (F&B) sector, and that the F&B sector is facing a dire situation because many Singaporeans tend to shun its jobs, leaving the industry with little choice but to rely on foreign labour.

The myth of the reluctant Singaporean worker has spread far and wide. Ostensibly, many Singaporeans nowadays shun all kinds of industries ranging from the food and beverage sector, to the service industries, to construction, to the public transport sector, to low-skilled manufacturing, and so on.

Are our Singaporean youths today so pampered, and living in such material luxury, that they can afford to turn up their noses to a whole range of occupations, and wait patiently for the perfect job to come their way? I seriously doubt that this phenomenon is as widespread as business leaders have claimed.

I believe, instead, that businesses have used the easy supply of cheap foreign labour to lower wage costs across the board. Thus, many Singaporeans who have to contend with the high cost of living, especially those facing the prospect of buying an expensive new HDB flat with the intent of settling down and starting a family, would naturally shun these jobs.

A notable case is that of SMRT Corporation, which pays China workers lower overall wages compared to Malaysian and Singaporean workers, for essentially doing the same job. We found out about this only because some China workers went on strike, else we would have been in the dark about it. The excuse SMRT gave was that the company has to provide China workers with accommodation. However, if SMRT had paid all its drivers a salary in line with international norms, it would no doubt have been able to find sufficient Singaporean and Malaysian drivers willing to fill the posts. The import of China bus drivers allows SMRT to pay low salaries across the board.

When businesses hire foreigners, they do not have to pay employers’ CPF or make Medisave contributions on behalf of the workers. They can also scrimp on medical benefits as well as other forms of staff welfare.

Many employers also are quite open and frank about being unhappy with Singaporean male workers, who have to serve National Service and spend time away from the company during reservist training. These employers feel that NS Men are a liability to the company, and would much rather hire foreigners who have no such NS requirements.

If we are to believe the claims made by the SBF and the RAS that they would be in dire straits should the government slow down the rate of foreign labour influx, then they have only themselves to blame. These businesses allowed themselves to be seduced by the government and they lulled themselves into a state of complacency because they have enjoyed two decades of cheap labour which the government has made readily available.

Thus, even the mere suggestion that the rate of foreign intake be slowed down comes as a rude shock to them. They have become so used to the status quo, so comfortable with the government’s foreign labour policies, that they failed to prepare themselves for the day when these policies must be gradually tweaked.

In other words, these businesses failed to look ahead and anticipate changes down the road. Not only did they not have 20/20 foresight, like what PM Lee has himself admitted, but they have gotten so used to hiring cheap labour that they have lost the ability to innovate, to improve on their operational processes, to upgrade themselves, and to be creative.

So now, these businesses are pushing the blame onto Singaporeans, suggesting that we shun so many jobs from so many different industries, so that collectively, businesses have no choice but to rely on cheap foreign labour in order to survive.

In the 1970s and the 1980s, before the government moved to liberalize the intake of foreign labour and initiate aggressive measures to shore up the population by bringing in immigrants and foreign talents, did any of our business complain that Singaporeans did not wish to take up jobs from certain industries?

Way back then, did any of our businesses or multi-national corporations complain that we were pampered and spoilt and were picky about our jobs?

The only time Singapore suffered economically due to high wages was in the early 1980s. In the middle of that decade, we had a steep recession. Thereafter, the government aggressively slowed down wage growth by restructuring the economy and reducing CPF contributions. Even when the economy recovered in the 1990s, the government never restored CPF cuts. They allowed CPF contributions to remain low up till the present day, using each and every recession as a justification why they should remain low.

Apart from the recession in the mid 1980s, the two main reasons for businesses in Singapore having to relocate or close shop are as follows:

  1. Aggressive competition from multi-national corporations and government-linked corporations who used their financial muscle to elbow the smaller players out of the way, and
  2. An emphasis on being an export-oriented economy, which leaves the domestic sector shallow.

After the 1980s, wages have never been the reason for businesses in Singapore to relocate or close shop.

Those businesses today who claim that any increase in wage costs would cause them to go belly up or force them out of the country are probably operating on such razor thin margins that their business model probably needs a very serious rethink.

Comments

7 Comments on The myth of the reluctant Singaporean worker

  1. oute on Wed, 13th Feb 2013 11:24 am
  2. Well, asked the SBF/RSA to tell the government to remove the National Service obligations of our MALES lah…

  3. Daily SG: 13 Feb 2013 | The Singapore Daily on Wed, 13th Feb 2013 12:27 pm
  4. [...] Comments on Mr Shanmugam’s comments on the Population White Paper – Sgpolitics.net: The myth of the reluctant Singaporean worker – five stars and a moon: Japan, sinking paradise for elderly [...]

  5. Local Patriot on Wed, 13th Feb 2013 5:30 pm
  6. These irresponsible businesses should just close shop and leave for good! I rather to have this easy trade-off than having so many foreigners to business which didn’t add value to our society. Didn’t they see what they have caused to this country? Damage already and not what they called vibrant food and beverage sector, we have had enough of those craps from restaurant I rather cook my own food or eat in cheap coffee shop selling my favourite Cha Kway Teo.

  7. sgthinker on Wed, 13th Feb 2013 6:34 pm
  8. You claim that “if SMRT had paid all its drivers a salary in line with international norms, it would no doubt have been able to find sufficient Singaporean and Malaysian drivers willing to fill the posts. ”

    Given that SG’s unemployment rate is so low today, can you tell us which job sectors should have less SG workers so that more locals can be bus drivers? Or are you suggesting that only Malaysians should take up new bus driver posts?

  9. lala on Wed, 13th Feb 2013 8:12 pm
  10. The SBF and RAS should release the turn over rate of their foreign workers.

  11. Tan on Wed, 13th Feb 2013 10:05 pm
  12. Hi author:

    Your article has open up some provoking thoughts regarding this issue of Singapore over-relying on low-cost workers. However, I have some pointers that might be of interest.

    I’ve been in the F&B business for very long and that I do hope you could listen to what I’ve got to say.
    Singapore F&B business been relying on cheap labour, no doubt, but have you ever considered: in order to keep price low, we need to keep costs low. However, we pay the same rental as any other company in Singapore for the while F&B require more space, more expenses than other industries like “advertising, sales”. The reason why 70% of new F&B in Singapore closes up within 3 years is the high cost of rental. Its the high rental that ultimately forces new startups to close.
    On the other hand, due to the high rental, F&B owners need to depress wages in order to sustain. You can see, any local hawker had to wake up at 4am, go home at 6pm in order to start his small business. And that this local hawker also had to keep his prices low in order to attract customer. Imagine his rental for one month is $4000 for one small stall in a coffeeshop, which translates to $130 per day in rental and that for each serving of food he sells, he would only earn a profit of $1, he would need to sell 130 plates in order just to pay the rent. Do you think F&B is sustainable.
    Another factor, $7 per hour, $400,000 for a 4 room flat, even the uneducated guy would tell you: “no thanks, I rather stay with my parents and not get married” Simple logic?

    30 years ago, a 4 room flat in bedok Reservoir cost only $50,000 and the typical blue collar earns around $1200 per month. Now, a 4 room flat in the same place cost $350,000 and that the same blue collar job would earn only $1.8k. Why would Singaporeans in the right mind find a blue collar job.

    Simple? its not the people fault that they do not want to work in F&B. My parents did that, my grandparents did that, I do want to as well, its my blood, its my interest but I do not foresee myself working in that line, because simply said, the pay is far too low to afford a family. If houses cost only 100k, I’m sure no Singaporeans would shun the F&B industry/blue collar jobs. I’m 100% guarantee that Companies would be having a boom employing these people.

    Please, do not blame the citizens for shunning the low-paying job when costs are too high, in fact, look at the government, blame them for making things skyrocket when they have the ability to control and curb. Control housing prices by limiting Singaporeans to purchase only one flat that has a grant of 200k so that SIngaporeans would be able to purchase subsidized housing and enjoy the benefits of being a citizen and serving NS.

  13. geirge on Wed, 13th Feb 2013 11:18 pm
  14. Is there a coincidence of the mass importation of foreign labour with the drop in enthusiasm for the productivity movement?

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