Cheap foreign labour to spur economic growth – think deeper and harder

By Irene Choo

I haven’t bought the new book “Hard Choices: Challenging The Singapore Consensus” yet but after reading Mr Vikram Khanna’s stimulating insight of the hits and misses, published in The Straits Times, 29 August 2014, I better book one soon.

It is undeniable that our guest workers have contributed significantly to our economy, in particular the construction workers, janitors, cleaners, medical care and domestic workers who physically help build this city, keep our streets clean and orderly and relieve us from unproductive chores such as housework. While I appreciate deeply all the niceties in life made possible by foreign workers, I am also worried about the social-economic price of our “addiction to cheap foreign workers”.

According to a recent survey conducted by TWC2 and posted on the Strait Times Forum on Aug 25, 2014, as many as one-third of our low wages foreign male workers, or about 130,000, suffer some form of wage theft, from partial to full denial of pay. Unscrupulous practice to keep operating cost low include denying overtime pay, forfeiting paid leave, unauthorised work for other companies, illegal deductions such as “forced savings”, “penalty fines”, “insubordination”, “kickbacks to keep the job” and more.

The estimates provided by the above survey may be just the tip of an iceberg since it does not include female workers, “domestic servitude”, workers who are “not contactable” as well as workers who are too ashamed to share their plights.

Is MOM aware of this, or just turning a blind eye? There were anecdotal cases where MOM reportedly told the workers that the employer is penalising them as a deterrence for other colleagues to lodge similar complaints.

In fact, Jolovan Wham, executive director of HOME, was once quoted as saying, “If it is a pay-related dispute, the government official assigned to the case may mediate against the interests of the workers, even to the extent that labour laws are not adhered to. If an employer refuses to pay up even when a court order has been issued, there is little a worker can do. Without any income, pursuing justice is an uphill battle.”

Unfortunately, such alleged offence is not restricted to mom-and-pop shops. International enterprises and state contractors are accused of similar charges too. Shanghai Tunnel Engineering and its Singapore subsidiary Shanghai Tunnel Engineering (Singapore) were identified by MOM for failure to pay some of their workers accordingly. Both companies are involved in several Land Transport Authority MRT projects.

Even when the perpetrators are prosecuted for not paying or underpaying workers, often, the punishment is hardly commensurate with the crime. For example, the recent prosecution of Woolim Plant Engineering & Consulting and Yi Hoe Construction shows that the fines they received was much less than the amount that they got away with. Can such penalties be adequate deterrence for future violations?

It is obvious by now that many employers steal migrant workers’ wages, and often do so with impunity. While underpaying or not paying workers help keep labour cost artificially low, it also disrupts the equilibrium of local labour market by encouraging unfair competition against local workers and keep wages “depressingly” low at the low end.

Hence, the purported relations between wages of our lower-skilled workers and immigration is not completely baseless. Even if the influx of foreign workers is not the root cause of declining real income and widening income inequality, it does have negative impact on wages, especially at the lower end.

The fear of Singaporeans losing out to unfair competition from foreign workers should not be taken lightly as invalid complaints and chatters. Similarly, it would be unfair to blame the foreign workers. These workers could be coerced to accept wages that are much lowered that the declared amount, forced to work overtime without overtime pay and live in slavery-like condition that is beyond our imagination.

We need the foreign workers to feed our economic growth as much as they need us to feed their families back home. But exploiting their vulnerability to feed our zealous pursuit of “cheaper, faster and better” economy is callous and violates humanity. Let us also be mindful of the accompanied criminal activities such as money laundering to hide the illicit profits of human trafficking.