S’pore shouldn’t reject investments just because it results in more foreigners. But hiring must be meritocratic.
Soft truths to keep Singapore from stalling.
Minister for Trade and Industry Chan Chun Sing delivered a speech in Parliament on Monday, Jan. 6, in response to questions from Member of Parliament Liang Eng Hwa and Worker’s Party chief Pritam Singh.
He spoke about the importance of balancing locals and foreigners in the workforce and how Singapore should not turn away investments that can create good jobs for locals.
He also added that the real competition is not between Singaporeans versus foreigners, but Team Singapore versus the rest of the world.
Here, we reproduce an edited transcript of his speech:
By Chan Chun Sing
Mr Deputy Speaker Sir, let me address Mr Liang Eng Hwa’s three questions holistically.
That is the reason why I think it is useful for us to consider both the ITM questions and the Total Factor Productivity questions together because all these questions pertain to our strategies to grow our Singapore economy and create good jobs for Singaporeans.
Mr Pritam Singh alluded to this issue of the benefits of our growth towards Singaporeans and non-Singaporeans.
Let me take the second question first, which is fundamental.
Singapore’s economic growth benefit S’poreans more than foreigners
Have economic growth and job creation benefited Singaporeans? And more importantly, as Mr Liang Eng Hwa asked, have economic growth and job creation benefited Singaporeans more than foreigners. Mr Deputy Speaker Sir, the short answer to both questions is a resounding yes.
This Government puts Singaporeans at the heart of everything we do. We pursue growth not for growth’s sake. We pursue growth so as to improve the lives of Singaporeans. I believe Singaporeans understand and support the Government’s position.
At the same time, I also acknowledge the anxieties that lie behind the Member’s question. Responsible political leaders must try to allay those anxieties, not prey on people’s fears for political advantage.
We have all met Singaporeans who are concerned about the future, especially in times of economic uncertainties. Some may have been displaced and are looking for a new job. Others may still be employed but worry whether they are ready for the future.
In short, we worry whether tomorrow will be better than today.
To fellow Singaporeans, I say this: We understand your worries, and we will walk this journey together with you. This Government will always have your backs.
That is why we invest so much in SkillsFuture and programmes like Adapt & Grow and the Professional Conversion Programme. That is why Continuing Education has long been our priority. If we take 20 years to prepare for our first jobs, it is not enough for us just to assume that over the next 30 to 40 years of our career lifespan, we do not need fresh injection of training and skills.
We do all this to help you prepare for future jobs, so that those currently employed remain future employed.
As I have always said when I was in NTUC, we are not satisfied to put today’s unemployed in today’s jobs. Neither are we satisfied with today’s unemployed in tomorrow’s jobs.
We want to prepare tomorrow’s unemployed, put them in tomorrow’s jobs, ahead of time.
We are also aware that mature Singaporeans in the middle of their careers may be more anxious about the future. Many of them may not have done any upgrading since they started work 20 years ago after their studies.
I want to assure this group of Singaporeans that the Government will do more to support them in staying skilled and employable, both now and for the future.
We will talk more about this in the Budget. It is not just about lifelong employment, it is about lifelong employability.
Getting the workforce balance right is never ending
The crux of the Member’s question is: Have we gotten the local-foreign workforce balance right? Not just in terms of quantity, but quality too.
These are questions that the Government and our economic agencies constantly ask ourselves.
Too few foreign workers, especially PMETs with skills required by our growth sectors, means that our businesses cannot seize the opportunities out there and in the process create better jobs for Singaporeans. Too many, and there will be push back, especially if Singaporeans feel unfairly treated.
It is a never ending balancing act with difficult trade-offs.
I often ask Singaporeans: if they can only bring in one more foreigner to complement our Singapore workforce, who will they bring in? Someone who is above our national average, or someone below our national average?
The most memorable answer that I have ever been given is by a young student who told me that we should bring in “the above average one to grow the economy but below me.”
This summarises the fears, concerns and aspirations of Singaporeans. We know we need the above average foreigner to complement our domestic workforce, so we can build a more competitive economy and provide better jobs with better pay for Singaporeans.
But we also know that these foreigners will compete with us and we need to provide some safeguards for our people. This is an evergreen challenge.
A job paying $7000 vs another paying $10,000
How do we grow our existing companies and bring in new investments that can create good jobs for Singaporeans?
Suppose a Singaporean worker is earning $5,000 today.
We bring in a new investment that can create two new jobs – one paying $7,000 and another $10,000.
The Singaporean can only get the $7,000 job today, because he does not yet have the skills or experience for the $10,000 job. Should we take the investment?
The Singaporean may feel frustrated. He may think he is being unequally treated because the foreigner earns more than him now.
We understand these sentiments, and we also want the $10,000 job to go to the Singaporean. But if we do not accept the investment for this reason, it will go elsewhere and both the $7,000 and the $10,000 jobs will disappear. The Singaporean will continue to earn just $5,000, and he will have fewer opportunities to rise to a higher-paying job.
What is even more important, his son or daughter, currently in school, receiving one of the best educations in the world, will not be able to aspire to both the $7,000 and the $10,000 jobs.
Which is a better outcome for Singapore and Singaporeans? Not just for this generation but for the next.
Is this analogy farfetched? No. It has happened before, indeed in every generation throughout our history as an independent nation.
We can learn from the previous generations how to approach this dilemma.
1970s case study: Our people did not get the best paying jobs immediately
In the 1970s, this happened when we went out to attract the electronics industry. Over a span of three years, the first three semiconductor companies in Singapore – National Semiconductor, Fairchild and Texas Instruments –created more than 7,000 jobs.
But our people did not get the best paying jobs immediately.
Indeed, many of our Pioneer and Merdeka generations worked under higher-paying foreigners. This was because they lacked the skills or experience at that point in time to take on the higher-paying jobs.
But we did not reject these investments as a result. Instead, we worked hard to learn and upgrade our capabilities.
And in time, we took over many of those higher-paying jobs – including the better-trained or educated children of the Pioneer and Merdeka generations. Many of those early engineers and technicians went on to become senior executives in this sector, and in turn mentored a new generation of Singaporean technicians and engineers in the semiconductor industry today.
Today, the same thing is happening with the ICT and software industries. ICT will underpin many other industries – banking, finance, advanced manufacturing, artificial intelligence and so forth. It requires highly specialised skills and knowledge.
When global companies like Google, Grab, Facebook invest here, the reality is that we do not have enough Singaporeans with the relevant skills and experience to fill all the jobs they create.
We have raised our intake for Computer Science in our universities in recent years but there is a limit to further increases. Not every student has the interest or aptitude to study Computer Science, and we also need to groom talent for other sectors in our economy.
Young Singaporeans who are coming out from the universities and polytechnics to join these new companies are better educated and have much better opportunities than the generations before.
So do we go out and attract these investments like Google, Grab and Facebook, not just for this generation but more importantly also for the next?
Accepting new investments is vital to create good jobs for locals
I say we do, and land the investment first. Just as our previous generation did in the electronics industry.
Create the jobs in Singapore first. Otherwise we lose the $7,000 job now and we may never get the $10,000.
Work hard to train our people and upgrade their skills to take over that $10,000 job as soon as possible.
But do not exploit sentiments to create envy, anger and frustration towards that foreigner who is now taking the $10,000 job.
I ask the House frankly: Do we agree with this approach? Do we hold that we should reject any investment on the grounds that the investment would result in more foreigners in Singapore, some earning more than Singaporeans in the same company? Should we reject investments like Google, Grab and Facebook?
I think most Singaporeans understand and accept why we cannot reject such investments on that basis.
Fair employment practices crucial to S’poreans
What Singaporeans want is a fair chance to get that $10,000 job as time goes by, if not as soon as possible. What Singaporeans do not want are unfair employment practices where Singaporeans are passed over because of non-meritocratic considerations.
The Government understands these concerns, and we stand together with fellow Singaporeans on this matter. This is why MOM has the Fair Consideration Framework and is continually updating the system to ensure a fair level playing field for Singaporeans.
This is our commitment. MTI and the economic agencies will watch over the enterprises to get them to train up and groom Singaporeans as part of their commitment to Singapore.
I believe the vast majority of companies know the deal. They play ball. They groom Singaporeans. Not just because we ask them to.
But because it makes business sense for them to localise and avoid concentration risks for business continuity, as well as to grow the Singapore ecosystem, and win the support and respect of generations of Singapore workers. That is how successful enterprises have done well in Singapore.
However, we know that there are some black sheep amongst the enterprises. Their employment practices must change. If not, we will come down hard on them.
They know this. We have taken action against them. And we will not hesitate to do so again.
Businesses understand the need to be responsible employers. They keep asking the Government to relax the foreign workforce controls because they want to expand their businesses. They tell us they cannot get enough Singaporeans to do all the jobs available.
Our answer to them is we can do this together, but you must also help us manage the sense of fair play and opportunity for Singaporeans. Our businesses understand this and they are responding.
The govt is on the side of S’poreans
The Government is on the side of Singaporeans. We will grow our economy and attract investments to create more good jobs for Singaporeans.
We will continue to devote resources to help our people stay competitive through lifelong learning and skills upgrading so that they can continue to stay relevant and move into higher-paying jobs.
Unlike other countries, Singapore and Singaporeans do not need to fear competition. We know we have to remain open to the world. We know that a Singapore that is closed-in cannot survive.
We have the resilience to overcome challenges and the means to help ourselves. This is important. We have the means to help our workers.
Not many countries can say that. Not many countries have the political mandate, will or necessary resources to do that for their workers. That is why their workers push back against global integration, trade liberalisation and so forth.
But we are different. And we can continue to distinguish ourselves through our tripartite partnership to make sure that our workers are never left behind. When we seize the new opportunities, our workers will have every opportunity to get the $10,000 job as soon as possible.
So long as we have the drive and we stay united as one people, building on the strong tripartite partnership between the Government, employers and the unions.
We will win as Team Singapore.
Local employment has increased from 2015 to 2018
Overall, this balanced approach has worked for Singaporeans.
Between 2015 and 2018, local employment increased by nearly 60,000 for the whole economy.
The PMET share of local employment increased to 57 per cent – one of the highest rates in the world. It means that for every 100 Singaporeans in the workforce, 57 of them are in PMET jobs. One of the highest in the world, because we understand the aspirations of our next generation.
If 70 per cent of our people are going to graduate with degrees and diplomas, you can see the tremendous pressure on the aspirations for the next generation.
Our youth unemployment is among the lowest among advanced economies – testimony to the fact that our education system is providing the right foundation for our people to take up those jobs that are being created in the new economy.
This is not something that happens naturally in every country. In fact in many other countries, many of them in Asia-Pacific, youth unemployment is one of the most significant challenges for those countries.
What about growth in earnings? Growth in real average monthly earnings for employed locals was 3.2 per cent per annum during this period.
This is higher than the 2.4 per cent per annum in the preceding three years, and higher than most other advanced economies, such as the US (0.5 per cent p.a.), Japan (0.8 per cent p.a.) and Germany (1.2 per cent p.a.).
Raising productivity in Singapore
Let us not be complacent.
It requires a lot of hard work on the Industry Transformation Maps (ITMs). The ITM is a system that we put in place for us to pull together companies, trade associations, unions, government agencies, research institutes.
All five partners come together to transform the industries. Because the old way of competing through raising productivity just by increasing factor inputs of labour and capital can only go so far.
The next step of our economic development will require us to increase our productivity, not just through the injection of capital and labour but through innovation, the revamp of our business models, our internationalisation efforts, and the economies of scale we can achieve through expanding our economy not just in Singapore but beyond.
All these are important work for us to work together to use the ITM as a platform to raise the Total Factor Productivity (TFP) so that our workers can continue to enjoy sustainable real wage growth in the years to come.
We cannot open the floodgates, nor can we close our borders
Mr Deputy Speaker Sir, I hope that I have given you a comprehensive answer on the questions that both Mr Pritam Singh and Mr Liang Eng Hwa asked.
The answer is yes, we have done the right things by getting the balance right. The Government will continue to calibrate this balance carefully.
The balance is struck by considering three factors: The needs of our industries and enterprises, the needs of our workers of this generation and the opportunities for our children in the next generation.
If we get this balance right, as we strive for this Goldilocks balance, we must firmly reject more extreme positions.
We cannot open the floodgates and drown Singaporeans. But neither can we close our borders and reject foreigners in our workforce. Above all, we must firmly reject efforts to stoke anti-foreigner sentiments by spreading falsehoods or creating invidious comparisons out of context.
That is not the kind of politics we want – like far-right parties in the European continent stirring hatred and fear of foreigners for political advantage.
That is not how Singapore transformed ourselves from Third World to First. And that is not how a confident and capable Singapore should face the future.
The future poses many challenges but also offers many exciting opportunities. We will continue to work with Singaporeans to steer the Singapore ship through the stormy seas.
It’s Team Singapore vs the world
We will make sure that we will not allow opportunists to stir fear and hatred amongst ourselves.
The real competition is not between the Singaporean versus the permanent resident (PR) here versus the foreigner here.
The real competition is Team Singapore, comprising Singaporeans, PRs and foreign workers here, competing with the rest of the world to give our fellow Singaporeans the best chance possible to win, not just in Singapore but across the entire
So the wages of our Singapore workers will continue to grow faster than the rest of the world in other countries.
On that note let us work together to go through these difficult moments.
Top image via.