The alternative news in 1 day? (part 16) – Labour cost to increase but would wages rise?

By Leong Sze Hian

Labour costs increase 20%?

I refer to the article “Labour costs could soar by up to 20% in some sectors” (Straits Times, Jan 1).

It states that “The double whammy of higher foreign worker levies and a manpower crunch could send labour costs in some sectors soaring by as much as 20 per cent this year.

The hit will come on July 1 when companies in the services, manufacturing and construction sectors face levy hikes of between $15 and $200 for each foreign worker on staff.

The pain will be felt particularly in the building game. Monthly levies will increase to a record $950 for each lower-skilled foreign worker hired by construction firms.”


Foreign workers’ levies to increase over $3 billion?

How much foreign worker levies is actually collected in a year?

In November 2012, Acting Minister for Manpower, Mr Tan Chuan Jin answered on the work levies collected, “The total foreign worker levies collected were S$2.5 billion for the Financial Year 2011  and S$1.9 billion for the Financial Year 2010”. (source)

Will it increase to more than $3 billion in 2013 and more in the years beyond?

How much of this sum will be used to help lower-income and unemployed Singaporeans?

How much of the tens of billions collected in the past has been used to help such Singaporeans?


But wage increase only 5%?

As to ”With low unemployment, potential nominal wage growth of around 4 to 5 per cent and inflation expected to stabilise at around 2 to 3 per cent this year, “real wage growth is on the cards for the man in the street and may come as relief to some workers”, said OCBC economist Selena Ling”- don’t you find it kind of strange that the subject article says that labour costs are expected to go up by as much as 20%, but wage rise is only 4 to 5%?

So, where will the difference of say about 15% go to? Into the Government’s coffers? But how does it really help Singaporeans when most of the rise in labour costs may not benefit them?


Higher inflation?

Will such a huge rise in labour costs be passed on to consumers by way of higher prices – and higher inflation which may lead to lower real wage increase?

Practically every year media reports say wages expected to increase?

In this connection, I estimate that real wage increase per annum, may have been less than 1% in the last decade or so.  For the 20th percentile, it may have been almost zero growth.

With regard to ”From August, firms that want to hire foreign professionals must prove that they have tried to hire Singaporeans by advertising in the government-run jobs bank. Firms with 25 or fewer staff, or those hiring for jobs paying $12,000 and above a month, will be exempted from the advertising rule”

How many employ 25 or less workers?- what percentage of the workforce are employed  by employers with  25 or less workers?


Why take so long?

Also, why do we need such a long time – almost a year year – just to set up a national jobs bank?After all, isn’t it just a web site to post the job vacancies available for those jobs within the salary range of the jobs stipulated, of larger companies with at least 26 workers?


Government should lead by example?

Are government agencies required to be in the jobs bank? If so, why not let them stsrt sfter 6 months from the time that the scheme was announced – and also start to show the statistics whether they are able to find Singaporeans to fill the job vacancies?

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