Prof Hui: Slowing the flow of foreign workers to Sg
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Slowing the flow of foreign workers to Singapore (ST 13 Nov)
SINGAPORE could have gone ‘overboard’ in its quest to maximise growth over the last two years before it was hit by the recession.
Too many jobs were created which led to an influx of foreigners to fill the positions too fast, too soon.
The momentum has now ground to a halt because of the economic crisis.
But if the pace picks up again, Singaporeans could end up being outnumbered by foreigners in the workplace.
To economist Hui Weng Tat, this scenario is no idle speculation or dire prophecy. It is grounded on hard numbers of foreign worker inflow, which he has been researching since the mid-1980s.
According to his latest projections, there could be more than three million foreigners working here by 2030, forming half the workforce. That will jump to almost 10 million by 2050, making up 75 per cent of employees here.
It is a frightening leap from the current figure of one million, or 36 per cent of the workforce.
These sobering figures explain why Prime Minister Lee Hsien Loong and other government leaders have emphasised the need to reduce the country’s reliance on foreign workers.
To drive home his point, PM Lee has said on at least three occasions since August that he could not imagine the foreign population doubling to two million.
Among the issues that the Economic Strategies Committee headed by Finance Minister Tharman Shanmugaratnam is looking into, as it considers new ways to grow the Singapore economy, is that of relying less on foreign workers.
Prof Hui is in one of the work groups set up by the committee.
But, seriously, can the flow of foreigners be slowed down?
Yes, says Prof Hui, an associate professor at the Lee Kuan Yew School of Public Policy. The mild-mannered man has no qualms about breaking what others might consider policy taboos. His three suggestions:
-One, tighten the tap on the flow of low-skilled foreigners into Singapore.
-Two, discard the current economic model of growth at all costs.
-Three, offer dual citizenship to reduce the brain drain, as at least 5,000 Singaporeans seek permanent residency or citizenship in other countries each year.
Foreign connections
WHEN Singapore began its industrialisation programme in the 1960s, it had to rely heavily on foreign workers, mainly from Malaysia, as it did not have sufficient manpower.
As the economy grew in the 1970s, so did the number of foreign workers as it took in foreigners from more countries as a stop-gap measure to fill the labour shortage.
Between 1974 and 1982, the foreign population more than doubled from 46,000 to over 100,000. It was too much, too fast.
In 1982, the Government decided to have a local workforce by 1991 – a plan that was doomed to fail.
It was unrealistic to expect Singapore to survive without foreigners, as economic demands required the retention of foreign workers. The levy and quota system was introduced to control their numbers.
Now, these workers are very much a part of Singapore’s labour landscape, perhaps too much, especially in the last two years. -
Commenting on the spike which has become a bone of contention among many Singaporeans, Prof Hui says: ‘Their numbers suddenly surged. That surprised everybody.’
This was attributed to the extraordinary growth in 2007 and first half of last year, which led to record-busting job creation of more than 200,000 each year.
Of the 235,000 jobs added in 2007, six in 10 went to foreigners. The ratio rose last year, with foreigners taking seven in 10 of the 222,000 new jobs.
This means that almost 300,000 foreigners flocked here to take up jobs in the past two years, pushing their population past the one million mark for the first time.
There are no official figures on the types of jobs taken by foreigners.
But, Prof Hui says candidly: ‘There is a realisation that too many have been brought in over the last two years.
‘I would expect that quite a number of them were low-skilled workers, which caused not only a depression of wages but also some social problems too.’
Housing the foreigners also became a controversial issue when residents protested against the siting of dormitories in their neighbourhoods.
The influx of higher-skilled foreigners here also had an impact, the economist notes, citing the increase in property prices as many of them rented or bought homes here.
In fact, foreigner numbers were so unexpectedly huge that they skewed his 2004 projections. Singapore’s foreign working population hit the level projected for 2019 in 2009, 10 years ahead of schedule.
It is thus not surprising that now, as in 1982, the Government is looking at reducing the country’s reliance on foreigners. The only difference this time is its recognition that they are here to stay.
Singapore, Prof Hui says, has the third-largest share of foreign-born persons in its population of any country, after the United Arab Emirates and Kuwait.
It is inevitable that foreigner numbers will continue to swell, but the key is how many the country can accommodate and how fast it wants to grow.
‘Maybe we went overboard in trying to maximise growth… in a sense, it’s fortunate that we have the recession that caused a rethink of this policy,’ he says.
Low skills, low pay
TO PROF Hui, the pertinent question is: Why did Singapore allow so many foreigners to come in?
The underlying rationale, he reasons, was to maximise growth at any cost.
‘For the investments that were brought in, the criteria were more to generate growth. I’m not sure if attention was paid to manpower requirements,’ he chides in his gentle tone.
This, he argues, has led to more low- skilled and cheaper foreign workers on work permits. Their presence, in turn, has depressed the salaries of low-skilled Singaporeans.
It is not a new trend, and policymakers are aware of it, he notes.
Indeed, government labour reports show that wages of workers such as cleaners and labourers have stayed stagnant or even declined in the past decade, while the wages of higher- skilled workers rose.
As further proof, he pulls out a table he compiled, comparing the wage gap in 20 developed countries in 1996 and 2006.
Singapore had the biggest gap in both years. It also had one of the fastest widening gaps: In 1996, the top 10 per cent earned 4.9 times the income earned by the bottom 10 per cent; in 2006, that proportion had increased to 5.7.
To remedy this, he urges the Government to re-examine its policy of bringing in large numbers of low-skilled foreigners.
‘Would we want to have industries in Singapore where you bring in many low- skilled and low-wage jobs which will impact on local workers?’ he asks.
‘Or do you want to be more circumspect in the kinds of foreign investments you bring in to ensure that they do not require excessive low-wage labour?’
Drawing a distinction between moderating growth and maximising growth, he adds: ‘When you maximise growth at any cost, you may not focus so much attention on the quality of growth and jobs created.
‘But if you moderate growth, you would want to generate jobs that are of high value. It won’t be just numbers per se, but creating quality jobs.’
As for higher-skilled foreigners on S-pass or employment pass, he stresses that employers should be made to justify why they need to hire them. The employers must show that they have tried but failed to find local employees. This way, local graduates, who are forming a bigger proportion of the unemployed lately, will have a fighting chance to land the job.
Lower growth, fewer foreigners
TO REDUCE the number of foreigners needed, Singapore has four policy options to consider.
The least helpful is raising the fertility rate as that is almost impossible, according to Prof Hui.
He believes the best solution is a combination of moderating growth and improving productivity.
His proposal has a prescient air about it as some government policies seem to be heading in the same direction.
For example, the Government has introduced a national productivity boost, with even the labour movement calling on companies to be ‘cheaper, better and faster’.
Recent speeches by government leaders have also been consistent in highlighting the prospect of slower growth, reminding citizens that there is a trade-off between fewer foreigners and higher growth. It is almost as if the Government is priming people for slow growth ahead, some say.
To Prof Hui, even the Government’s targeted annual growth rate of 5 per cent ‘may be too high’.
He believes a more sustainable annual rate is between 3 per cent and 4 per cent.
According to his data, shaving economic growth by one percentage point to 4 per cent a year could halve the number of foreign workers needed by 2030.
This would also mean less strain on resources such as land, housing and transport.
‘We can maximise growth… but it could be at the expense of higher housing and transport costs,’ he says.
Some might argue that lower growth could lead to lower living standards, but he does not agree.
A lower annual growth rate of 4 per cent would result in real gross domestic product (GDP) per capita sliced by $5,000 to $87,000 in 2030.
‘But GDP per capita is not directly related to living standards,’ he insists.
With fewer foreigners, he contends, Singaporeans might even have a higher quality of life as they have a less dense living environment and cheaper housing.
The density level in Singapore, he notes, is already the fourth highest in the world now.
As for raising productivity levels, his data found that increasing it by one percentage point to 3 per cent each year could also almost halve the demand for foreigners.
This means more can be produced with fewer workers. But while it is a desirable option, it is ‘elusive’, as past experience shows that there is no direct correlation between policy efforts to raise productivity and actual outcomes.
He also points out that productivity is currently on the decline, and getting it back into the positive range will be tough – let alone increasing it to 3 per cent.
The other solution would be getting more older folk back to work, thus growing the pool of local workers.
By drawing on 25 per cent of the economically inactive seniors, aged 55 and above, who are currently not working, the need for foreign labour could be cut by as much as 25 per cent immediately, he says.
But the impact would decrease over time, to about 10 per cent by 2030.
This move, however, is also not that simple. It requires the cooperation of older folk who want to work, and companies that want to hire them.
Dual citizenship for S’poreans?
AS THE Government mulls over the various ways to reduce its dependence on foreigners, it should reconsider how best to retain local talent.
Prof Hui pulls out yet another table – this time on emigration to four main destinations – Australia, Canada, the United States and the United Kingdom.
Around 4,000 Singaporeans seek permanent residency in these countries that they live in each year, and another 1,000 give up their Singapore citizenship to acquire the citizenship of those countries.
If the number of new entrants to the labour market each year is estimated at 30,000, then the 5,000 Singaporeans who seek residency elsewhere would represent an annual loss of 15 per cent of Singapore’s workforce additions.
And they are usually the talents Singapore would want to keep.
Why not offer dual citizenship, he suggests, as a way to retain them so that the country would not lose the 1,000-plus citizens who give up their citizenship.
It is an idea that has been debated in Parliament and dismissed by the Government, which is concerned about divided loyalties and whether it could prompt even more Singaporeans to take up other citizenships.
But he believes it is time to revisit the topic, as the world becomes more globalised and the borders more porous.
It is inevitable that foreigner numbers will continue to swell but the crucial thing is how many the country can accommodate and how fast it wants to grow, says Prof Hui. — ST PHOTO: LAU FOOK KONG -
Regardless of what anybody says, the 6 million target population will be reached.
Don't care if the country is already too crowded.
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aiyoyo! NMP calibre wor???
words can sound nice or appease.
wat counts is ACTION, not words.
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whatever, as long as got more crowd, my pubs sure make money.
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Originally posted by angel7030:
whatever, as long as got more crowd, my pubs sure make money.
Why will the Taiwanese "hum" impose its irrelevant advertisements in this corner ?Obviously the Taiwanese "hum" cannot appreciate the integrity of this place.
Why will the "hum" persistently impose its "hum" values onto others - when all it has to offer is to be "cheaper" than the "cheapest", "faster" than the fastest "job" possibly can be done, "better" than for the satisfaction of its customer ?
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Originally posted by Atobe:
Why will the Taiwanese "hum" impose its irrelevant advertisements in this corner ?Obviously the Taiwanese "hum" cannot appreciate the integrity of this place.
Why will the "hum" persistently impose its "hum" values onto others - when all it has to offer is to be "cheaper" than the "cheapest", "faster" than the fastest "job" possibly can be done, "better" than for the satisfaction of its customer ?
Why everytime hum leh!!! aiya, true mah, Singaporeans should think of a way to become boss, because you cannot change the way govt is doing thing, unless of course they lost in the coming election and so on. If not, as a wage earners, be it workers or PMET catergories, you are going to compete for FTs n FWs, and you need to work with them side by side. -
Originally posted by angel7030:
Why everytime hum leh!!! aiya, true mah, Singaporeans should think of a way to become boss, because you cannot change the way govt is doing thing, unless of course they lost in the coming election and so on. If not, as a wage earners, be it workers or PMET catergories, you are going to compete for FTs n FWs, and you need to work with them side by side.
Do we need a Taiwanese "hum" to tell Singaporeans what we should or should not do ?Just keep your advise for the integrity of your "hum" before you sell your integrity and get yourself raped.
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Originally posted by Atobe:
Do we need a Taiwanese "hum" to tell Singaporeans what we should or should not do ?Just keep your advise for the integrity of your "hum" before you sell your integrity and get yourself raped.
Per kg of integrity = how much?As for rape, i dun think you have the strength.
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Originally posted by angel7030:
Per kg of integrity = how much?As for rape, i dun think you have the strength.
Would a "hum" even know what "strength" is when it does not even know what is the value of "integrity" ?Only a "hum" will want to know the weight of "INTEGRITY" - when it has nothing to be proud of.
The stupidity of a "hum" from Taiwan is evident when it will belittle the 20 years paid for the price of "integrity" by Dr Lim Hock Siew.
Does it take that much strength to have a "hum" to be raped ?
The dumbness of a "hum" can be so telling that it is displayed each time it decide to expose itself hanging out from its tiny shell anticipating the next invited ravish.