By SY Lee and Leong Sze Hian
It was revealed that foreign graduates in Singapore are waiting up to six months to get a job on average. (“Foreign graduates on S’pore govt bonds finding job hunt tough”, Straits Times, Apr 29)
A ministry spokesman spoke through ST that eight in 10 foreign students on MOE grants who graduated from a polytechnic or university in the past three years either started work immediately or applied to the ministry to start serving their bonds at a later date so that they could further their studies.
“The rest, she added, may not be bond defaulters as some could still be job hunting.”
20% bond defaulters?
Does this mean that about 2 out of 10 may be bond defaulters?
If they do not indicate after a period of time, say about 9 months that they have not started work, applied to further their studies or still cannot find a job. Should they not be classified as bond defaulters?
If so, why is the Minister of Education unable to even give an estimate of how many have defaulted on their bonds all these years? (Parliament report)
Foreign graduates cost more to hire?
It is stated that the minimum requirement for the higher-tier Employment Pass (EP) has been raised to $3,300, however many companies are not willing to pay that much for a fresh graduate.
But since employers do not have to contribute CPF for foreigners – they save 17% of salaries when they employ employment pass holders.
So, the equivalent salary of a Singaporean fresh graduate is $2,820 as it would cost the same as the employment pass minimum of $3,300 ($2,820 times 1.17).
However, the average gross monthly salary among fresh university graduates in full-time jobs in 2013 was $3,229, while the median gross monthly salary was $3,050 .
Therefore, these numbers may indicate that the perception being apparently promulgated in the subject news report that fresh foreign graduates have difficulties in getting a job, due to the higher minimum EP salary and preference for Singaporean graduates may be flawed – because hiring a foreigner on an employment pass at $3,300 is equivalent in labour costs to hiring a Singaporean at $2,820 – which is $478 ($3,229 times 1.17 minus $3,300) less than the average salary of a Singaporean graduate.
In other words, it may still be much cheaper to hire a foreign fresh graduate – not to mention the other advantages like males not having to serve national service, etc.
Why do you think that the real growth in university graduates’ starting salary is estimated to be negative over the last 7 years or so?
The article also touched on how the companies is opting for the alternative, which is to hire the foreign students on a lower-skilled S Pass, which has a lower salary requirement of $2,200 and offers lower chances of securing permanent residency. But many companies said that they cannot do so because they have reached the quota for S Pass workers.
This seemingly innocent fact may highlight the alarming issue that most companies may “max out” their S Pass quotas because foreign graduates may be more willing to work at such relatively low starting pay.
Why do you think that the median starting salary of polytechnic fresh graduates declined in real terms by an estimated 5 per cent over the last 5 years or about minus 1 per cent per annum?
End of the day, if foreign graduates are finding hard to look for jobs, would it not mean that local graduates might find it harder to look for jobs?