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The race to the bottom, to be "cheaper", is burdening S'poreans, especially older ones. Leong Sze Hian.

“Cheaper, better, faster” may just break the camel’s back

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Leong Sze Hian

The MOM's latest report, without the media spin, is worrying. The race to the bottom, in terms of lowering wages, is disconcerting and could be the last straw that breaks the backs of working Singaporeans.

I refer to the reports, “Falling productivity an issue” and “5.9% residents jobless” (ST, Nov 30).

The median income for all employed residents dipped by 1.2 per cent from $2,450 in 2008 to $2,420 in 2009.

Here are some interesting data from the Ministry of Manpower report, which were not highlighted by the newspaper.

On page 16, the report states:“Part-timers also posted higher median income of $620 compared with $600 a year ago.”

Part-timers’ median income in 1999 was $600. So, the increase for the last 10 years was only $20, or an annual increase of only 0.3 per cent, without adjusting for inflation. And it is important to consider that a possible reason for the $20 increase may be that a part-timer is now defined as one working 35 hours or less, instead of 30 hours.

On page 20, the report states that in June 2009, 26 per cent of unemployed professionals, managers, executives and technicians (PMETs) had been looking for work for at least 25 weeks.

It also noted that this figure was higher than the 23 per cent figure for workers in production and related sectors, and 20 per cent for clerical, sales and service workers.

In the 40-and-above age group, the proportion of unemployed PMETs who had been jobhunting for at least 25 weeks was even higher - at 36 per cent. This is well above that of clerical, sales and service workers (27 per cent), and production and related (24 per cent) workers.

To what extent has our liberal foreign worker policy contributed to this? And are those 40-and-above being discriminated against at the workplace? Why are they, particularly, finding it hard to get jobs?

The report also noted that the unemployment rate for cleaners, labourers and related workers was the highest across all sectors in June 2009 at 8.3 per cent, followed by service and sales workers at 7.9 per cent, and clerical workers at 7.4 per cent. All these rates were described in the report as “significantly above average”.

Could this be due to competition from foreign workers in these lower-skilled, lower-paid jobs?

The report says, on page 24, that there has been an increase in the number of “residents outside the labour force who were not looking for work because they believed their job search would be in vain.”

The number of these “discouraged workers” has reached 11,000 in June 2009, up from 7,500 a year ago. They now form 0.6 per cent of the resident labour force inclusive of discouraged workers, rising from 0.4 per cent last year.

Perhaps you have noticed that the elderly toilet cleaners at Changi airport have mostly been replaced by younger foreign workers. The same seems to be the case at food courts, where table cleaning duties were once the domain of elderly workers.

I understand that these phenomena are due to foreign workers being willing to work for even lower wages and longer hours.

A cleaner who used to be paid about $800 a few years ago, is now typically paid about $650.

I know of a 60-year-old lady working as a kitchen supervisor for about eight years, earning about $1,300 a month.

Since her company was acquired by a listed company, she has been told that she has to work overtime without overtime pay, because she could be easily replaced by a foreigner working for $800 a month. She also has to work for four hours on her off-days without pay, as that is considered “volunteer work”.

Although the above are anecdotal evidence, the fact that productivity continues to decline may provide some clues to our labour problems.

As an illustration, every foreign worker we bring in may contribute to an increase in our gross domestic product. However, the influx of lower-skilled, lower-paid foreign workers may also cause lower-paid Singaporean workers’ salary to decline.

Along with declining income, rising costs of living, longer working hours and so on, morale and work attitudes may also suffer.

Thus, is it any wonder that productivity has been declining, while labour and business unit costs have been rising?

Linking ministers’ pay to GDP growth may also have contributed to the importing of low-skilled foreign labour to grow the economy.

The rhetoric to focus on productivity through re-training and skills upgrading over the years has clearly failed, particularly for lower-income workers.

The latest call to be “cheaper, faster and better” may be the last straw that breaks the proverbial camel’s back of Singaporean workers.

Asking workers to work longer and faster while receiving the same or lower pay is not the solution.

The current trend of out-sourcing, hiring contract workers and tendering for the cheapest may only continue to exacerbate our productivity problem.

As if declining wages, wage cuts, shorter work weeks, compulsory leave, lower or zero bonus, weren’t bad enough, resident unemployment was 5.9 per cent in June, on a non-seasonally adjusted basis, with 116,300 unemployed residents.

The unemployment rate for Singaporeans may be worse, as PRs who cannot find employment may leave the country, whilst most unemployed Singaporeans may not have this option.

Why is there no breakdown of the unemployment rate for citizens and PRs?

With the number of children applying for the Straits Times Pocket Money Fund reaching an all-time high of 11,642, the number of financially-stressed Singaporeans appears to be growing. This is in spite of reports claiming that the median income has stabilised for those in employment after rising significantly over the two preceding years, and MOM’s report that the employment rate for prime working-age men in Singapore, despite a decline, remained higher than in many developed and Asian economies.

Despite all the above, we are giving out visas for foreigners to come to Singapore to seek employment, whereas most countries would require a foreigner to get a job before he or she can be issued a visa.

But of course, a foreigner who is here looking for a job, competing with Singaporeans, may also contribute to an increase in the GDP, as he or she has to spend money everyday!

By the way, Singapore has clinched another world number one title in the meantime: “...the employment rate of older workers above the age of 55 stayed at a high of 57.2 per cent – a record that was reached a year before. In fact, Singapore has the highest rate of older men working globally”  (“Older workers maintain high job rate despite overall decline in employment”, CNA, Nov 30).

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