February 14, 2010
I appreciate Mr. Kunju’s reasoned response to my article, one of the few that I have seen on TR. After all the abuse and the vitriol that came earlier, this is a refreshing change. However, I don’t think my position has been accurately portrayed. Mr. Kunju’s own arguments themselves are also not very clear. (read Bhasakaran Kunju’s article here)
I do not have any issue with the fundamental point on foreign workers in the ESC’s report:
The ESC said, as quoted by Mr. Kunju: “We recommend a progressive increase in worker levies to incentivise companies to improve productivity”(It also added “…giving companies time to adjust).
What I said in my article was: “What this suggests is that (a) the goal is to avoid increasing the proportion of foreign workers in the workforce (b) this is a secular goal; and (c) companies will be given time to adjust.
The intent was to clarify that the policy goal is not cutting back the number of foreign workers per se, but reducing the dependence on them over time. There is a difference.
With regard to the point on incentives to retain foreign workers, let me explain:
ESC indicated that companies need to improve skills of ALL their workers. On page 9, para 27, the report says. “Companies…have to rely more on technology and innovtion and improve skills among both their local and foreign employees as a basis for competitiveness and growth.”
This is only common sense. If you run a company containing both local and foreign workers, you would want to send them all for training to improve their skills, not just some of them.
However, in some industries, foreign workers are transient. In the construction and marine sectors for example, many of they stay on short term contracts. Then they go home sometimes only after a few months and are replaced by another cohort of foreign workers. In such industries, it makes no sense for employers to do much training or automation, which contributes to their low productivity. So it’s only logical to incentivise these companies to reduce the turnover of foreign workers (that is, retain those that they need for longer) while at the same time reducing their dependence on foreign workers over time. That way, these companies will have more incentives to provide more training to the workers they have, and do more automation. Eventually, Singapore’s construction industry will be more like say, Australia’s – higher productivity and a lower proportion of foreign workers, but both the local and foreign workers that it has will be more productive. That is the way to go.
On the ERC of 2003:
It is true that the Economic Review Committee was seven years ago, but contrary to what Mr. Kunju suggests, that doesn’t make everything it said obsolete. The logic is still valid in the 2003 statement: “‘Without foreign workers manning the night-shifts, there would be no day-shift jobs for Singaporeans. Production costs would go up and companies would be forced to move elsewhere, where workers are cheaper and more readily available.’ Even seven years later, there are industries where getting rid of foreign workers would lead to LESS jobs for Singaporeans, not more jobs.
It’s important to grasp this point. Many people have the idea that the labour market is zero-sum game – that any job done by a foreign worker is a job taken away from a local worker. This is not correct.
Remember, a lot of industries face fierce global competition. Supposing (to put it in stark terms) they were severely restricted from hiring foreign workers, what would happen? The labour market for those industries would tighten and wages would rise. And while local workers would get nearly all the jobs that on, the companies would soon find themselves at a severe competitive disadvantage because of their higher wage bills: they would either have to close down or move to places like malaysia and China. And they would end up laying off their local staff. For a lot of companies therefore, the choice is not between hiring local workers and hiring foreign workers, it is between hiring SOME foreign workers and being forced out of Singapore, or closing down. Fortunately, severe restrictions on foreign workers are not being contemplated; rather the aim is to reduce dependence on them gradually. That’s a sound policy. I am glad Mr. Kunju also agrees that mass culling of foreign workers will amount to economic suicide.
On Japan:
Mr. Kunju says: My example of Japan “is severely generalized and dangerously irresponsible in its own right. This is a puzzling comment.
Of course he is right to say that “Japan’s economical problems run deeper than that of a lack of foreign workers” – I hardly suggested otherwise. The high yen, industrial hollowing out, the unwillingness of consumers to spend, the high fiscal deficit and government debt and frequent changes in leadership- all of these have been among Japan’s problems. But I am not aware of any economist who says that Japan has been wise to keep foreign workers largely out of its workforce. Japan’s net immigration has been almost zero, despite falling birth rates a shrinking of the population and rising longevity. The result has been rapidly ageing workforce. 22 percent of Japan’s population is now over 65 years old. By 2055, the proportion is projected to increase to 40 percent. The high ratio of older workers (which more immigration could have corrected) has severely hurt Japan’s economic growth. Paul Hewitt in the journal International Politics and Society estimates that Japan will lose 0.7 percentage points of growth every year till 2025.(http://www.globalaging.org/health/world/depopulationeuropejapan.htm)
So the issue here is more about producTION than productivity. My point is that while Japan’s productivity may be high, it has a serious problem with production – namely economic growth. And if economic growth does not grow, incomes cannot grow. And there is a direct link between Japan’s lack of immigration and its low economic growth. Mr. Kunju’s statement that in Japan,:”the addition of foreign workers will only further lower wage rate and hence reduce consumption as well as incapacitate a work force that is already lacking in efficiency,” ignores the impact of foreign workers on production and economic growth. Nor is Japan’s workforce “lacking in efficiency” as Kunju suggests. As the productivity numbers show, it IS efficient. There are just not enough productive workers.
Singapore is also ageing although it is not in Japan’s league in terms of age profile. But Singapore’s relatively liberal immigration policy has helped boost its growth. And this has helped increase incomes and is also positive for productivity.
I cannot see anything “dangerously irresponsible” in what I said. What IS dangerously irresponsible: it is the call by the editors of TR for a mass consumer boycott of “companies/shops/stalls whose staff are mainly foreigners” (see their post “Temasek Review Helps Singaporean find a job at local IT startup” on Feb 4) As “Sanevoice” noted in the comments to that post, this is is a mad idea. Sanevoice’s quote is worth repeating: “Suppose people support your harebrained proposal and boycott companies/shops/stalls “whose staff are mainly foreigners”. What would happen to the Singaporean staff of those companies/shops/stalls? What would happen to the Singaporean staff of companies that supply these companies, or who need to buy components or inputs from them? A modern economy like Singapore’s is interrelated. It works like the engine of a car. Do you think if you remove some components of a car engine, the rest of the engine will work fine?
Do you not realise that by calling for a boycott in your xenophobic zeal, YOU WILL BE CREATING JOB LOSSES FOR SINGAPOREANS??” (emphasis as in original).”
If Mr. Kunju thinks my comments on Japan were “dangerously irresponsible,” I wonder what he makes of this boycott call by TR’s editors.
Finally, I am glad Mr. Kunju addressed the issue of ettiquette. I agree that comments posted by readers – even personal attacks – “shouldn’t be taken personally.” – that’s how it is on the net. However, when most comments take the form of personal abuse rather than arguments, when even racist insults appear to be allowed, you begin to wonder what kind of site this is. I also wish TR would stop its ad-hominem attacks – the idea that an argument is wrong not because of what it says, but because of who says it.
I’d therefore like to reiterate that I respect the spirit and tone of Mr. Kunju’s comment. He did not indulge in personal attacks like so many others, but addressed the issues. We do not have to agree, but at least we can disagree in a way that enables people to learn something from the discussion, no matter what view they may lean towards.
EDITORS’ NOTE:
The above was initially posted as a comment on TR and reposted as an article.
Again on foreigner workers issue, i thot foreigner talents is the bigger issue. For Foreigner workers, they dun cos much of an issue here, they really do the hard, sweating and dirty job for us...just like our maids. We needed them, and they needed us too, so it is a compliment of each other. I also give ang bao to my bangadeshi workers who do the cleaning and throwing of rubbish jobs for us. It is like thanking them for helping us.
Originally posted by angel7030:Again on foreigner workers issue, i thot foreigner talents is the bigger issue. For Foreigner workers, they dun cos much of an issue here, they really do the hard, sweating and dirty job for us...just like our maids. We needed them, and they needed us too, so it is a compliment of each other. I also give ang bao to my bangadeshi workers who do the cleaning and throwing of rubbish jobs for us. It is like thanking them for helping us.
r u a pap agent?
Why bangadeshi also foreign talent ah? siao liao, like that how? Low end jobs sweating and dirty long hrs shift work Banagadeshi take our job. Middle range jobs indian accountants take our jobs. High end job, ang mo talents take our jobs. Like that siao liao, I better find a rich man daughter to married
Originally posted by ☃®:r u a pap agent?
no, me supply them washing powder agent only..every monday deliver to oxley Road and istana. Since it is near Elizebeth hospital, i sometime go for my smear pap test.
Originally posted by Brandon kuan:Why bangadeshi also foreign talent ah? siao liao, like that how? Low end jobs sweating and dirty long hrs shift work Banagadeshi take our job. Middle range jobs indian accountants take our jobs. High end job, ang mo talents take our jobs. Like that siao liao, I better find a rich man daughter to married
Kuan yew,
all these foreigners have to work for somebody correct, and that somebody must be their boss right...so be the boss lah, so stupid one. Be the boss and exploit them hard hard lah
The issue of foreign workers has been debated.
To summarise
(1) Foreign workers come to Singapore because the pay is higher
(2) Employers employ foreign workers because they are cheap and at times
better as they are younger and more engergetic.
(3) Local unemployed workers shun these jobs or the pay is too low to cover
their cost of living.
GST is increased from 5% to 7% to finance the workfare scheme to
supplement the income of these low- wage workers.
The issue of foreign talents has also been discussed
(1) The foreign talents come to Singapore because the pay is higher and better
job prospects
(2) Employers employed foreign talents because they are cheaper, younger and
less demanding
(3) Local unemployed educated workers lose out as their skills are outdated,
older, unwilling to accept much lower pay in view of global competition and
more demanding.
Government does not provide a similar workfare scheme to supplement their
income.
Originally posted by Seowlah:The issue of foreign workers has been debated.
To summarise
(1) Foreign workers come to Singapore because the pay is higher
(2) Employers employ foreign workers because they are cheap and at times
better as they are younger and more engergetic.
(3) Local unemployed workers shun these jobs or the pay is too low to cover
their cost of living.
GST is increased from 5% to 7% to finance the workfare scheme to
supplement the income of these low- wage workers.
The issue of foreign talents has also been discussed
(1) The foreing talents come to Singapore because the pay is higher and better
job prospects
(2) Employers employed foreign talents because they are cheaper, younger and
less demanding
(3) Local unemployed educated workers lose out as their skills are outdated,
older, unwilling to accept much lower pay in view of global competition and
more demanding.
Government does not provide a similar workfare scheme to supplement their
income.
the issue is to tell singaporeans, Kong Hee Fatt Choy days are over, you guys better bite the bullets now, get use to it, and later life will be better.
the issue is to tell singaporeans, Kong Hee Fatt Choy days are over, you guys better bite the bullets now, get use to it, and later life will be better.
Talk already like did not talk at all lor. who don't know we had to bite the bullet
Life will be better? rubbish words, who don't know