Suggestions to limit the issuance of Employment Passes (EPs), while not a far-fetched one, may be unwise, said Manpower Minister Josephine Teo on Tuesday (1 September).
Responding to Members of Parliament (MPs) who sought clarification on her speech in the parliamentary debate on the President’s Address, Mrs Teo said that imposing a quota on EP holders may result in Singapore losing “many of the top-quality investments” to competitors.
It is thus a better move to implement salary criteria to balance the need between hiring high-quality migrant professionals, managers, executives and technicians (PMETs) and the need to buttress the Singaporean workforce over time.
“We must therefore not miss the woods for the trees, by focusing narrowly on keeping foreigners out, and missing the larger picture of growing the pie and giving Singaporeans the chance of the best slice,” she said.
The recently introduced minimum salary hike, said Mrs Teo, will push EP holders at the lower-end of the salary scale to the higher threshold of the S Pass, which will then make such workers become subject to the quota.
She added that a good number of EPs were downgraded to S Passes after the former’s salary requirement adjustments.
Mrs Teo also highlighted that quotas are applied by her ministry to Work Permit — alongside levies — as the number of such workers are higher than those holding EPs.
There are around as many as 737,200 Work Permit holders as of last December compared to around 190,000 EP holders as of June this year.
Mrs Teo noted that the COVID-19 pandemic’s impact on the economy has contributed to the reduction of EP and S Pass holders by 22,000 between January and July this year.
Sengkang Group Representation Constituency MP Jamus Lim sought clarification from Mrs Teo as to whether “simply slowing down the rate of new EP and S Pass holders is sufficient to ensure that local PMETs do not get displaced”.
“Even if the rate of issuance has slowed, as Minister Teo has shared, it’s misleading to actually compare the two.
“For instance, a 20 per cent increase from 50 people, for example, is 10 people. But a 10 per cent increase from 200 people is, in fact, an increase of 20 people, which is larger in absolute terms,” he said, highlighting how “the slowdown in the rate of EP and S Pass issuance is less dramatic than Minister Teo claims”.
The Workers’ Party (WP) MP also posited that many PMET positions “may already have been secured by foreign talent, and that it is no surprise that the number that is now required actually goes down”.
Mrs Teo, however, replied: “I merely stated the facts. I did not say that one contributed to the other.”
“What does it take to help Singaporeans stay in employment, stay out of unemployment, and over time to achieve income growth, to achieve retirement adequacy? Those are the four things that MOM is always looking at. Then we ask ourselves what is the best way to achieve these outcomes,” she added.
Netizens, however, appeared to be dissatisfied with Mrs Teo’s reasoning, and stressed that imposing quota for EP “is not only sensible, but an effective direct tool in curbing the overpopulation” of migrant PMETs in Singapore.
One commenter opined, however, that “too many restrictions” may deter foreign companies from setting foot in Singapore, and argued that the Ministry of Manpower (MOM) should monitor companies’ hiring of migrant PMETs more closely.
Mrs Teo’s previous announcement on her ministry’s plans to increase the salary criteria for the two work passes garnered a multitude of disgruntled reactions among Singaporeans.
Many commenters called upon MOM to put in place stringent quota for the two passes, particularly EP, instead of simply raising the salary criteria.
They highlighted that multinational companies (MNCs), for example, may still not be deterred from hiring migrant professionals, managers, executives and technicians (PMETs) in place of their Singaporean counterparts.
Others also urged the Government to impose higher levies on firms that continue to hire migrant staff and heavier penalties against employers found flouting the work passes’ requirements by using false declarations.
Many commenters also proposed increasing the wages of local workers — or even introducing a minimum wage — and to instate more policies that will create more employment opportunities for Singaporeans.
One commenter argued that raising the minimum salary requirement “means forcing employers to think why they need to spend so much money” on FTs instead of local workers.
They added that companies are beginning to prefer hiring Singaporeans “for a more stable workforce” and will not “take the risk of faking documents or relying on yearly renewal of EPs”.
One commenter said that the new minimum salary requirements may push companies to hire Singaporeans over “foreign talents” as “it might no longer be worth the administrative time and effort” to hire the latter.
However, the absence of a Central Provident Fund (CPF) contribution requirement for FTs may still render the increased minimum salary requirement ineffective.
In a TOC interview by historian Thum Ping Tjin in July, Leong Sze Hian — financial advisor and People’s Voice Party Jalan Besar GRC candidate in the recent general election — similarly posited that firms lean towards hiring foreigners due to the absence of a CPF contribution requirement.
He argued that the CPF issue, however, is not the primary driving force behind companies opting to hire migrant staff over locals, but rather the low turnover rate.
“The foreign worker is typically on a two-year contract. You can torture the guy, break all the rules, [and] they cannot run to another employer,” said Mr Leong, adding that such workers are often bound by agent fees back home.
A local worker may leave or lodge a complaint to MOM more easily, he said.
Mr Leong said that government policies have contributed to the unequal playing field in the Singapore manpower landscape.
“I mean, look at your National Jobs Bank. There is no disclosure of how many of the jobs actually go to Singaporeans,” he said.