The failed Singapore labour and manpower policy, period!

Posted on October 3, 2012 by

I have written about the pethetic state of the immigration policy by the overpaid Singapore Government and its civil servants (Singapore population can’t keep rising – The flawed liberal immigration policy of Singapore). Let’s look at the failed labour policy that leads us to the mess today.

In Todayonline’s “Survey: 8 in 10 Singaporean SMEs having trouble hiring“, ASME President Chan Chong Beng was quoted “some of the pay that SMEs are offering are just too low…..They have been spoiled by the influx of cheap foreign workers.” This nails the problem right on its head. Eminent businessmen Ho Kwan Ping had articulated a similar view (see Ho Kwon Ping on Singapore’s immigration and labour policies) recently.

MOM and the Government have no incentive to cramp down the cheap labour policy:

it is a lucrative income when the Government can make average SGD$210-500 per head per month from each foreign worker that works here, multiplier that by several hundreds thousands of these workers and the amount is staggering. Assuming $500 levy per worker and we have 500,000 workers at any one month (which is much lower than fact), the Government will be collecting 250million per month, and this does not include the multiplier effect on additional income the Government generated from transport, housing, GST collected etc.
The availability of cheap labour in the region and a generation of Singaporeans and employers addicted to below market rate cheap goods and services.
The policy has not hurt the votes yet

The side effects of this failed policy are

widening rich-poor income gap, with the lower income group’s income has been declining over the last two decades (see Minimum wage has no place in Singapore)
Year of neglect in improving productivity, as a result, the productivity has been declining instead of increasing due to the availability of cheap labour.
Strain on infrastructure
Worsening status on low paying job and a lazier new generation

Here are the proof if you need convincing.

One of the many get rich programs adverts you will find daily on local newspaperswhy the need to dig up road and cover up again and again?
why the need to paint the tens of thousands of houses every few years? which country do that?
why the need to keep tearing down perfectly good buildings and rebuilt them since the labour costs are dirt cheap?
Repeated building and tearing down from man made barriers and make-shift night markets. Need proof? Just see the pictures I have taken recently below.
My gut feel is half of the locally bred Singaporeans are engaged in non-productive, value creating jobs from insurance agents, housing agents, travel agents to full time bloggers, MLM, SPA and beauty shop owners, full time traders, full time trainers (so called internet entrepreneur) to train even more people to quit their useful jobs (pic right). There is something serious wrong with tax regime which disincentivise abled bodies to work in productive works which the economy is crying out for.
Overly-staffed civil service which hogs talents and useful workforce who can otherwise contribute to GDP rather than spending time writing and revising papers and come up with all kinds of useless campaigns and initiatives and wasteful projects (such as the Garden on the bay, ITE 9th wonder).