Foreign Workers Buffer

With reference to today’s article on unemployment on the Straits Time Saturday, 12 September, 2009, it seems that the employers are ambivalent towards the employment of locals. They want to help the locals out but the locals are saying that their jobs have no prospects. And at the same time, they find that it is costly to employ the locals as their demands are way too high.


Key issues identified by Ivan Png and Goh Chin Lian have intrigued me. I will further elaborate my views on their thoughts here.

As mentioned by Ivan Png, “Last year, a total of 2.858 million were employed in Singapore. Of those, slightly more than one-third – to be precise, 35 percent – were foreigners.” “4.6% was attributed to resident unemployment while 3.3% was the results for the total employment.”

To put it across mathetically,

Essentially, for the buffer to work, the rate of employment among the foreigners should be lower than that of the locals. And from the mathematics shown above, it is working perfectly fine.
 
Apparently, right now the employers are having an arduous situation. In an effort to promote more job opportunities for the locals, the employers are only allowed to employ 1 China worker for every 9 workers employed and these 9 workers must consist of at least 5 locals and the rest from traditional sources, example Malaysia. In the past, 1 China worker can be employed for every 5 locals employed.


Doesn’t the above sounds puzzling? The government wants to promote more opportunities for the locals but from what I see, there’s no difference. It seems more like the government is promoting job opportunities for foreigners excluding China citizens? Look, in the past you can hire one China citizen for every 5 locals and now the number of locals did not change a single bit, doesn’t that seems a little senseless?

The few reasons highlighted by employers as to why they want to hire foreigners:

-Levy charges on every foreign workers ranges from $150-$470 which is affordable

-Locals are too demanding. Even Yellow Ribbons are complaining that these menial jobs have no prospects. But wait, I thought that they said that no one wants to employ them because of their background? In the first place, why are they complaining when there are willing employers hiring them whereas everyone else is rejecting them? Puzzling indeed.

-Labour-intensive and onerous tasks deter locals and they hate to work weekends and night shifts which are parts and parcel of a service-line job. Locals are pampered into the thinking that they can be only available from 9-5 and no more than that. If they don’t change this perception anytime soon, not just the service-line, they won’t fit in elsewhere as well since Singapore is entering this competitive dimension already. Without sacrifices, they will just be left out and disregarded.
So what is the government doing to promote the use of locals by these employers?

They will continue to reduce the number of foreigners that the employers can hire for every few locals. This will force the employers to hire more of the locals in order to use foreigners. Indirectly, they will have to raise the salary in order to entice and attract locals. Well, this is definitely one compelling reason for the employers to employ locals. But in the long run, companies might just move out of Singapore to use foreigners directly in their own countries. As more brain-drain occurs, what will happen to the future of Singapore?

Then again, shouldn’t the government loosen the rules regulated upon the labour-intensive industries such as apparel, textiles, manufacturing and service where lots of labour is required? Because I think that the locals here are complaining of losing jobs to foreigners in the financial and business sector rather than in the textile industries. So perhaps, the government will have to review their policies and identify clearly where the employees, who are complaining of the loss of opportunities to foreigners, are from.

Apparently, in order to be sustainable after the economy recovers, we have to raise the workforce quality and allow other businesses to grow simultaneously and in turn channel labour to high-value added industries. In a way, this might be true to a certain extent because if employers are stuck with foreigners, they will not progress because their employees are mainly uneducated and not really skilled. There are no goad for them to further improve themselves because their employees are actually burden to them at the end of the day. If they want to change as a whole, they will have to change the entire batch of their employees.