TR EMERITUS

How do you raise the minimum wage on the one hand, while flooding the market with cheap foreign workers, on the other? It is akin to trying to fill a bottle with water which has a hole at the bottom. It is an exercise in frustration. When we allow a large pool of cheap foreign workers into the country, we are in effect lowering the market rate for low skilled workers - when supply of such workers increase while demand remains constant or even decrease, wages goes down. In such a scenario, to implement a minimum wage is to try to artificially prop up the market rate. Many workers, especially the foreign ones, will be willing to take the job for a wage lower than the minimum wage. Many employers would love to take them at that wage. However, both will be prevented by law to do so. Naturally, both parties will be tempted to collude to circumvent the law. The end result is that much effort will be spent, by the employers and employees, cheating the system, and the authorities, enforcing it, as is happening with Employment Pass and S-Pass schemes. How can the businessman and the worker excel when they are constantly worried about being caught? The straight forward way to raise wages is simply to drastically restrict the supply of Work Permits. In the long run, you get a Singaporean core who may stay on in the job and excel in it. But instead, the G rather prop up the wage artificially with Progressive Wage Model, or what Mr Tharman calls Minimum Wage Plus, sector by sector. So far, the cleaning, security and landscape sectors are included. However, these are sectors that are dominated by GLCs or are dependent on government contracts. Even then, who is to say there’s no monkey business to circumvent the minimum wage? It would be a lot more challenging implementing the PWM in sectors where government influence is less dominant. In addition to the PWM, the government helps low wage Singaporeans by topping up their salaries with Workfare. This certainly helps the workers but it is in fact a subsidy to businesses paid by taxpayers. Prior to globalization, the market rate of workers was determined by its demand and its supply in the country. But now, it is depressed by the liberal cross border movement of workers from other countries, resulting in non-livable wages for low skilled workers in their own countries. Why doesn’t the G just restrict the number of Work Permits and thereby raise wages, instead, complicate matters? The G is afraid that many businesses will fail or leave. Also, it is afraid it will send the wrong signal and investors will stop coming. It will also have to face the wrath of existing business owners and investors. It rather go along with the same scheme but try to control the inflow and mitigate the ill-effects like depressed wages. But businesses here have been over-depending on foreigners for decades. Are Singaporeans better off? Is life always about business first and citizens subsumed to its needs? Would we not be better off if citizens come first? Without a large pool of cheap foreign workers, wages of lower-skilled Singaporeans would be a lot higher. There will not be a need for a so-called minimum wage. But would we lose our competitiveness and jobs dry up so that instead of low-wage, it becomes no-wage as newly minted MOS Gan put it? Is she fear-mongering or did she stumble on the truth? The current system of overly depending on foreigners increasingly doesn’t commensurate with the cost - lower skilled Singaporeans can’t earn a living wage, PMETs are being displaced, infrastructure and environment strained and overcrowded, social friction, high cost of living, the list goes on. It is time to debate whether depending on foreigners to the extent that we are, is in our long term interest.   Foong Swee Fong      Read More →

Gawd, it's worse than I thought. Lee Hsien Loong called Singapore under PAP the 'Garden of Eden'. Does he and the PAP really think they are gods? If this is the garden of eden, I will gobble up all the apples on the Tree of Knowledge this instant.   Roy Ngerng      Read More →

Me 8 years back I’ve been blissfully out of the office for the last three days and thus missed one of the most interesting debates around. The Office Spice declared that she is taking the Graduate Management Admission Test (GMAT – the standard exam for the better known MBAs) and somehow, during the conversation with the rest of the office, she said something about GMAT being recognised unlike the qualification issued by the Association of Certified Accountants (“ACCA”), which she said was only recognised in Asia and nobody in the USA or Canada had heard of ACCA. Leaving aside the merits of her comments, the end result was that she ended up infuriating the Wobbly Pudding (her supervisor, who happens to be sitting for several ACCA papers). Apparently, I’ve missed the great drama. I get why the Wobbly Pudding was upset. She’s been busting her guts just to get the papers and the last thing that she wants to hear is any suggestion that the papers that she has worked so hard for, are anything less than what she expects them to be. However, I believe that there is a broader issue at play here and its one that we need to look at in our education system – namely the obsession with the paper qualifications. OK, in fairness, Singapore isn’t the only place on earth where parents tell their kids that they need to study hard, get a degree and get a good (defined as well paid) job. However, Singapore is probably the only place where this is taken to an extreme. Our all-pervasive government is helmed by people with beautiful qualifications from the world’s best universities (basic degree from one of the Oxbridge universities and an MBA from an American Business School) and it’s not just the degree. The job application form for anything in the civil service goes as far back as requiring you to produce your primary school certificates. In a way this is the secret of Singapore’s success. We are a society obsessed with education. Our school system is famously tough. We excel at taking exams and as the mantra goes, we remain a wonderful destination for foreign investment because we provide them with a well educated and disciplined work force. I also think that the Singapore government is right when it emphasizes training as a means of helping the unemployed get back to work. However, as with most government proposals, the emphasis on education either gets taken to an extreme or defined so narrowly that very few people actually benefit from being “educated.” The most extreme example being the so called “cushy” life that government scholars lead. In theory the system is right. Government should be run by the best and brightest. However, in practice, we don’t get the results one would expect from the best and brightest a nation can offer. Case in point was our subway system, which was (and still is) run by generals. The two generals who were promoted to run the subway have beautiful degrees from top-notch universities. Both served in the military but never actually had a problematic command let alone anywhere close to seeing combat. Somehow, a lifetime of playing war games in a simulated environment qualified them to run a subway system which they had never ridden on, let alone found the technical details for, previously (it made the news when the second general took a ride on the subway he was supposed to run). The pay for running the system is sinfully good. When you have a situation like this, any parent with half a brain cell realizes that they key to success is the paper. As such, parents will push their kids into getting the right papers. Once they are noticed by the government, they are given a scholarship and then, magically, every conceivable challenge that life may throw at them vanishes. As such, education and thinking stops after they get a degree. One should not dismiss paper qualifications out of hand. The nature of modern jobs is such that you need to spend an increasing amount of time in an educational institution to train your mind. We have reached a situation where a bachelor degree is increasingly the entry level requirement to get your CV read. We should also remember that theory is also important. The guy who knows the theory before he has to practice it, does beat the guy who is supposed to just put it into practice (whatever the “it” may be). Having said that, we need to remember what is a paper qualification. I believe that a paper qualification merely tells someone that you were interested in something and went to explore further. My anthropology degree for example, doesn’t qualify me for anything but it does indicate that I like human interaction and should stick to roles that require some of it. I resisted the liquidator’s pleas to study accountancy because that would have ensured that I spent more time dealing with spreadsheets than with human beings. The other area where I believe I did some learning was from living in London. Daddy had a flat in Soho and I had the good fortune to live in the vibrant part of a world city. I have “three-years” of the London experience and what I “learning” I did came from the people I met. Interestingly enough, my lecturer at Goldsmiths did point that most of the learning we’d do was not in our “sacred halls” but from each other and being in the city. I made good friends during my university days. I actually had fun in London and the friendships, particularly with the Roman Brothers and the Finnish Gang proved to be priceless. However, I never thought that being a graduate made me anything special. It merely said that I had the good fortune of being born into a decent enough family. Paper qualifications are good to have as they help you progress through a career. They are good to have if they help you move into something you want to do. The experience of getting a qualification can be very educational. However, let’s remember that at the end of the day, its just a piece of paper and doesn’t define you as a person. Where you go from your qualification is a question of character rather than the paper itself. It’s a fact that many of us would do well to remember.   Tang Li *Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.      Read More →