Monthly Archives: February 2010

The penitent season

It’s about that time of the cycle again, when the penitent seek forgiveness for the sins they have committed. They humbly, or in this case, not so humbly, go to the people who they have offended and ask that they forgive him or her. For if offended don’t, the aggressor may face hell, or worse.

Yes, its pre-elections season and the government has actively gone around trying to right wrongs.

For one, for years the government has been told that companies are too reliant on foreign workers. It constantly defended its policies, preferring to lump two arguments into one; that of the foreign workers with foreign talent.

On the one hand, it said foreign workforce is crucial to the economy because it provides businesses with the slack to work. If businesses don’t have the ability to hire cheap labour, they go to another country to set up shop.

On the other, foreign talent gives Singapore skills that Singaporeans don’t have.

It’s a difficult argument to rally against. Singapore is small, Singapore is competitive, Singapore is an open economy. Those are the three assumptions that any argument about the economy is based on.

Yet, the argument has always been built on weak foundations.

One, if companies can simply set up shop elsewhere, given cheaper labour, then our entire value proposition is reduced to whether labour is cheap here. This can’t possibly be what Singapore has prided itself on, can it?

Two, there are ways to manage the foreign worker flow, without having to cut off supply. Clearly, businesses are exploiting the foreign workers because they can. Recall the numerous cases of Chinese workers filing complaints against construction companies at MOM.

In this case, it is not a function of what the company needs, but what the company wants.

Underlying all these problems was a hidden story; that of falling productivity. For a nation priding itself on knowledge, science and technology, to have productivity fall over 10 years is horrifying.

Of course, productivity is nowadays defined in many ways. Rising real wages is a real problem. But if you look at the statistics, rising overall wages are due directly to the top earning more, rather than everyone earning more. According to the Dept of Stats, the bottom 20 per cent of household’s real wages (which is adjusted for inflation) has declined the most in the past three years, while the top dropped by less.

Those who live in private housing earn an annual income of $54,000 at least twice those who live in HDB flats. They earn ten times those who live in 1 and 2 room flats.

So what does this say about the situation here?

It is quite clear that while wages have risen, it is those who are are the top who have experienced these increases. This cannot account for the loss in productivity since people who earn that much are expected to pull in more for the employers (except maybe top civil servants, hah)

So the fault was always with foreign workers; foreign workers who did not get trained by their companies because they were transient labour, those who were given the lowest wages possible since they earned more much in their currencies due to the SG dollar strength.

And so now, the anger has risen from those who have fallen through the cracks; those who demand a decent wage so they can live and thrive in sunny Singapore. For them, whether or not the companies fail or go bust is irrelevant. For them, tis a question of survival. Surely anyone can live on $800; but how does he live?

If these were obvious problems, why did the government not react earlier? And why now and not in boom times when it was better to make adjustments? (to be fair there is never a good time to do these things for the companies. But given how the PAP has always harked on their abundance of political capital and will, one wonders.)

It is not late now to change all this. And to this end, the government has embarked on a systematic purging of unproductive companies. Doubt me not, many companies will fail because they have relied so much on foreign labour and the cost savings they brought. But I rather them fail, send the foreigners away, save jobs for Singaporeans, free up housing for us.

I am not against foreigners. They are human beings out to make a decent living. I know many of them. They are essential to many parts of the economy.

But if and when it comes to defending the rights of locals to a decent jobs, a decent wage in one of the richest countries in the world, I say, death to the firms which rely on foreigners.

But as with all transgressions, the people forgive the sinner?