Cutting foreign worker numbers won't save jobs for Singaporeans

Singapore

REDUCING foreign worker numbers will not prevent Singaporeans from being displaced from jobs, said Finance Minister Lawrence Wong in Parliament on Tuesday, in a debate on two motions filed by the government and the Progress Singapore Party (PSP).

Decrying the PSP's framing of foreign worker policy as the cause of job-related anxiety, Mr Wong reiterated the need to stay open to foreign talent while managing their inflow, ensuring fair employment, and aiding displaced workers.

PSP Non-Constituency Members of Parliament (NCMPs) Leong Mun Wai and Hazel Poa had filed a motion calling upon the government "to take urgent and concrete action to address the widespread anxiety among Singaporeans on jobs and livelihoods caused by the foreign talent policy" and some free trade agreements such as the Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore.

The PSP agrees on the need to stay open, but wants the level of foreign manpower to be reduced and is concerned about their "quality, number, and concentration", said the NCMPs, giving several suggestions - which political officeholders rejected in the course of debate.

The government had filed its own motion, with debate proceeding on both motions together. Opening the debate, Mr Wong said: "Even if we got rid of 'tens of thousands' of foreigners, locals will continue to be displaced - because of technology, because of innovation, because of the changing nature of work over time."

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With the pandemic having increased the economic churn and uncertainty, it is easy for politicians to "make one nationality or another the scapegoat and blame them for all our troubles, rather than work on reskilling our workers", he said.

While there are downsides to being open, an economy "where nobody will ever be displaced" is one that will stagnate and atrophy, he added. "So the right approach is not to impede progress by holding on to every job even as they become obsolete; but to work hard to protect every worker and help those who are displaced."

The government's strategies have worked, he said. Resident median incomes grew 3.2 per cent per annum in real terms from 2010 to 2019, until Covid-19 struck. The employment rate is high, and unemployment low.

From 2010 to 2020, employment for local professional, managers, executives and technicians (PMETs) grew by about 300,000, almost three times the rise in Employment Pass (EP) and S Pass holders in the same period.

The PSP downplays these achievements and "play(s) up the anxieties", he said: "The PSP assumes that if we reduced the number of foreigners here; then all these jobs will automatically go to Singaporeans."

But if policies become overly restrictive, firms will go elsewhere and Singapore will lose all the jobs they brought here, he said.

Acknowledging that being a hub economy brings benefits but comes with costs, he said the government will keep taking steps to deal with the downsides of globalisation.

Manpower policies and rules will be continually upgraded to manage the flow and calibre of work pass holders; the government will uphold fair employment practices; and displaced workers will be helped, with upskilling and finding good jobs.

Said Mr Wong: "Mr Leong's motion states that the government's 'foreign talent policy' is the cause of job anxieties. But he's barking up the wrong tree because the issue is not about local talent versus foreign talent. This is not a zero-sum competition.

"What we have is a Singapore talent policy - to maximise our overall talent pool, so that we can achieve the best outcomes for Singapore and Singaporeans."

In his speech, Mr Leong set out the proposals such as raising EP and S-Pass qualifying salaries to S$10,000 and S$4,500 respectively over the next three years, and having an immediate S$1,200 monthly levy for EPs.

The PSP also proposes a 10 per cent cap on workers from a single nationality in each of a company's business functions; a combined quota of 25 per cent to 30 per cent for work pass holders and Permanent Residents (PRs) "in the long run"; and fewer PRs and new citizenships awarded to work pass holders.

Ms Poa added two suggestions to strengthen enforcement of fair employment: large contracts or tenders could impose a duty of care on the purchaser, such as audit requirements for compliance with manpower policies; and having licences for human resource managers.

Manpower Minister Tan See Leng rejected the PSP's proposed levy, saying this would not help to regulate quality.

A levy would eat into an employer's budget for an EP holder, narrowing the pool to those who would accept the lower salary, he said. As for quotas and caps, this could result in the loss of high-end jobs for locals.

More broadly, he warned that the PSP's stance on foreigners and FTAs is detrimental to business and investor sentiment regarding Singapore.

Singapore has fallen from first to fifth in the Institute for Management Development's (IMD) 2021 World Competitiveness Ranking, sliding down in areas such as "attitudes towards globalisation", "availability of skilled labour" and "immigration laws preventing companies from hiring foreign labour", he noted.

What the PSP says "has an effect on IMD's assessment, and on business sentiments, here and overseas", he said. "Investors watch and wonder: how many other Singaporeans feel this way?

"Has Singapore become less welcoming of foreign investments, of global talent?"

To show that the increase in foreign PMETs has not led to worse outcomes, Dr Tan gave figures on employment growth, low unemployment rates, rising job vacancies, and rising median wages for local PMETs.

Ideas were also offered by Workers' Party MPs. Leader of the Opposition Pritam Singh suggested that skills transfers from foreigners to Singaporeans be tracked, monitored, and reported.

He also proposed a new type of fixed-term EP that can be renewed only if the company can prove that under the previous EP, Singaporeans benefited from skills upgrading.

Replying to the latter, Dr Tan said that it does not make sense for the Manpower Ministry to be the judge and "force employers to let go of experienced work pass holders once their fixed term is up".