Foreign Worker Policy And The SGD Policy
I have become good friends with my pest control chap over the past years and we have a mutual understanding of each other.
He is a typical Singaporean worker who earns too little to afford a local wife, he says, or have any eligible female remotely interested in him. He is content to stay with his parents in his 40’s and likely to live out the rest of his years eking his living doing what he does till he cannot and when his parents pass on, he will likely migrate to Thailand or the Philippines where his savings can last a little longer.
I heard this story before too. From the cleaner of the building which I had worked in. He was formerly employed in the shipyards where the wages were more than decent for him, some SGD 3,000 on good months with overtime. Until his health prevented him from working in his strenuous line of work and he could only find a light cleaning job that paid SGD 550 a month. He was mortified to find out that my monthly parking was almost that amount for I was paying SGD 480 a month for temporary parking. But we were good friends and he gave me the occasional horse tip sometimes.
I shall not go on to tell the story of the hotel bathroom cleaner, of a certain hotel across my old office which I frequent as regularly as their bar. Hotel bathrooms are much nicer than office bathrooms too so I did not mind the short walk.
Suffice that my friends and I were employed because in Singapore it is really quite hard to be unable to get work.
* Singapore has enjoyed the largest & employment surge in a decade amongst developed nations with 58.4% of the population employed by 2014 compared to 49.5% in 2004, according to data out of Bloomberg
* Singapore’s workforce growth is expected to slow in the next decade to 1-2%, adding just 100,000 jobs a year from the peak of 234,000 jobs created in 2007
* Singapore tightened restrictions on foreign workers again today with new rules to consider locals over foreigners as the government seeks to abate voter discontent.
– Minimum pay for employment pass holders raised to SGD 3,300 per month in Jan 14.
– Exempted are jobs that pay over SGD 12,000 a month.
– A job bank will be set up for companies to advertise positions before applying for foreigners
– Firms that do not comply will be identified as those “with room to improve”
* Higher labour costs. My pest control guy reckons that there are few who will do his job for his wage these days and he thinks that the wages of skilled workers will soar in the coming years. He cited auto technicians, air con specialists, chefs and plumbers as some of the skills under threat.
* IT dreams. Singapore’s IT hub dreams will go to Malaysia. The processing centre success resulted in many corporates and banks relocating their IT centres to Singapore and thousands of Filipino and Indian IT experts were imported into the country as a result. I know this because friends used to go on quarterly recruitment drives for that purpose because Singaporeans will not work in Changi Business park for less than SGD 6,000.
* Inflation resulting from higher labour costs. Inevitable if there are not enough pest control guys around.
* Labour efficiency/ Worker productivity. Hire 2 for the price of 1 or 1 for the price of 2. Productivity will fall unless processes of streamlined or migrated. There are going to be a lot of grants for this, I bet. Set up those consultancy firms now !
* Rentals will fall ? No stats on that yet. We have population target of 6.9 million still, I suppose. And we are not talking about foreign labour housing. even though this stock Centurion Corp (foreign worker dormitories) is on a mad run.
* Deterrence to foreign investors who may now view the measures as xenophobic.
* Slower growth which is confirmed by the government as the economy is less competitive on the wage front.
I am wondering what people will do when they get richer ? And what people will do if they don’t ?
I can see char kway teow sellers go on strike right now and demand 5 bucks for char kway teow tomorrow. Easy if they don’t get it, they just go and work where the money is. I notice that mixed rice prices going up, coffee prices going up. Even my dad does not bitch about paying $1.60 for coffee at Toast Box now.
But when people get richer, they will spend more. So the car problem will not go away ? And the flat upgraders will keep the property market buoyant.
Perhaps policy changes to loosen the strong SGD policy for the exporters can help them to manage their wage problem but that would hurt the financial services who are looking for a strong SGD to keep investors keen and assured that their money is safe. So, the dilemma there.
Yet the funniest thing I note in the article out of Bloomberg today is that our policy makers met with ……. guess who ?
Senior management of financial companies ! Not corporates, not airlines, not drug companies or telcos … but financial companies.
And the agenda is to emphasise a need for them to hire local talent. That strikes me as funny.
So ? Financial services huh ? No wonder all the banks are still calling for the SGD appreciation story.
Need to sleep over this one.