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Jobs policy aimed at favoring citizens

Foreign manpower
  • The Straits Times (15 April 2011) : Jobs policy aimed at favoring citizens
  • The Straits Times (11 April 2011) : Raising work pass salary thresholds may not solve problems

Jobs policy aimed at favoring citizens
- The Straits Times, 15 April 2011

In his letter of 11 April, Mr Leong Sze Hian lamented the competition faced by Singaporean graduates from foreigners for available jobs. The statistics show a different picture. Last year, the Singapore economy recovered strongly with overall unemployment rate falling to 2.2 per cent, and local employment growing by 56,200. Demand for Professionals, Managers, Executives and Technicians (PMETs) was especially strong with 20,300 job vacancies at the end of 2010.

2.   It is simplistic to presume that restricting the inflow of foreign talent will translate into more job opportunities for locals. In fact, foreign talent supplement the limited local manpower pool, especially in a tight labour market, helping Singapore to attract strategic investments and create more and better jobs for Singaporeans.

3.   However, the Government recognises that we need to attract foreign talent with the right skills to seize available economic opportunities. This is why Employment Pass (EP) and S Pass holders have to meet qualifying salaries which are comparable with local graduates or PMETs as well as possess acceptable qualifications. Raising the qualifying salaries for the EP and S Pass from July 2011 is part of the measures to progressively improve the quality of the foreign workforce. The increase in qualifying salaries will encourage employers to be more selective in their hiring of EP and S Pass holders who are of better quality and tilt the balance in favour of locals. Employers are not compelled to raise the salaries of existing foreign employees to meet the higher qualifying salaries as they can be downgraded to a lower work pass if they are eligible.

4.   Mr Leong may wish to note that employers are obliged to provide EP holders the same 12 weeks of maternity leave under the Employment Act. As for local males with National Service obligations, most employers understand and support the need for national defence.

5.   Besides the creation of jobs, we have and will continue to tilt the balance in favour of local PMETs by providing them with opportunities and subsidised training initiatives. For example, the Skills Training for Excellence Programme (STEP) was recently introduced to help PMETs broaden and deepen their skills and knowledge through heavily subsidised courses, scholarships and master classes/workshops. Raising the capabilities of local PMETs will help them become more productive and employable.

Raising work pass salary thresholds may not solve problems
- The Straits Times, 11 April 2011

Raising the salary thresholds for employment pass and S Pass ('Govt's strategy in helping low-paid Singaporeans' by Ministry of Manpower; April 1) may not alleviate the problems that Singaporeans may face when competing with foreigners, as long as employers are allowed to hire an unlimited number of employment pass holders, and one S Pass worker for every three local workers.

How does a Singaporean graduate compete with younger, more qualified and more experienced foreigners willing to work for much less pay?

As employers do not have to make Central Provident Fund contributions for such foreigners, they will save $640 a month on a foreigner with a salary of $4,000 on a Q1 pass. Foreign male workers do not have national service obligations, so employers do not also have to worry about the up to 40 days of reservist training in a year.

Most foreign female workers may be single and not pregnant when they arrive here, so employers may be less concerned about the four months' maternity leave and salary costs. Also, foreigners generally cannot change employers during their typical two-year contract. So, fewer turnover problems for employers too.

Because existing work pass holders are allowed a one-time renewal of up to two years for employers to meet the new salary thresholds, foreigners are effectively being given an 11 per cent and 12 per cent pay rise for S Pass and Q1 pass respectively, when locals had only a 0.5 per cent real median wage increase last year.