TIGHTENING access to lower-skilled foreign workers is more likely to improve employment outcomes for locals, compared with tightening access to higher-skilled foreign workers, Manpower Minister Tan See Leng said in Parliament on Monday (Feb 27).

“This is because businesses were then able to substitute lower-skilled but cheaper foreign workers with locals and therefore improve the production process accordingly,” he said in response to a question from Leon Perera, Workers’ Party’s Member of Parliament for Aljunied GRC.

The net result is that locals can take on the jobs at “slightly higher levels”, Dr Tan said, citing findings from internal studies by his ministry on foreign workforce policies.

“This has therefore informed our approach of remaining open to high quality foreign professionals while maintaining a disciplined stance in regulating the number of Work Permit holders through quotas and also levies,” he said.

However, there is a limit to how much the government can tighten access to lower-skilled foreign workers, due to the size of Singapore’s population, Dr Tan pointed out.

Continuing to do so would have a “worse-off” effect on Singapore’s economic progress and industry development, he added.

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Noting that the same correlation of tightening foreign worker access and improving local employment does not apply at higher skill levels, Perera asked if this meant that Singapore is not producing enough highly skilled or qualified professionals to fill the job vacancies that the economy is creating.

Disagreeing, Dr Tan said: “We are already doing significantly more to improve on the prospects in terms of moving them, in terms of investing in their training, in the upskilling, in upgrading.”

But accelerating changes have forced economies and industries to evolve rapidly, alongside other significant disruptions, he said.

“To keep pace with those and to keep ahead pre-emptively, in terms of making sure that we’re ahead of the competition, we will not just need to develop our own local talent, we will also need foreign workers to come alongside with us and complement us as we move forward.”

Dr Tan noted that the studies “are but just one input to the entire policymaking process”, adding that they have their limitations.

“For example, they are unable to account for less quantifiable effects of having foreigners in our workplace and our workforce, such as the knowledge spillovers to locals and other network effects,” he said.

This means the impact of the interventions studied might also change if they are applied beyond a certain scale or at a different time period.

The studies need to be interpreted carefully with other sources of information, including more recent labour market statistics and industry feedback, he said.