Mahathir’s ‘S’pore poor country’: Statistically speaking? (Part 2)


Are there any countries in the world that allow employers to hire 100 per cent foreigners? 

After writing “Mahathir’s ‘S’pore poor country’: Statistically speaking?” (Aug 15), I was so motivated by the comments in the original article by Khush Chopra, that I decided to do a part 2:

The raising of the salary threshold for S-Pass and Employment Pass a few years ago, may not alleviate the problems that Singaporeans may face competing with foreigners like Malaysians, as long as employers are allowed to have unlimited hiring of employment pass foreigners and up to 20 percent of the total workforce for S-pass, in most sectors.

Unfair competition against Singaporeans?

How does a Singaporean graduate compete with a younger Malaysian graduate who may be more qualified and experienced, and is willing to work for a much lower wage?

johor singapore causeway 070905Since employers do not have to make Central Provident Fund (CPF) contributions for foreigners, hiring a Malaysian on an employment pass at the minimum salary of S$3,300 (RM9,796) will enable the employer to save S$561 (RM1,665) a month.

Since foreign male workers like Malaysians do not have national service reservist
obligations, the employer does not have to worry about the up to 40 days of reservist training in a year.

Since most foreign female workers may be single and not pregnant when they arrive in Singapore, local employers may be less concerned about the four months of maternity leave and salary costs.

Also, foreigners generally cannot change employers during their typical two-year contract period. So, less turnover problems too for the Singaporean employers.

Increase in minimum wage

In effect, the minimum wage for foreigners like Malaysians, on employment pass and S-pass, had been increased, even though there is no minimum wage for the locals.

According to the Singapore Ministry of Manpower’s Labour Market Reports over the years, the rate of change in the growth of foreign workers in Singapore has been almost double that for locals (Singaporeans and permanent residents (PRs)) – and perhaps even higher for Singaporeans.

This may even be higher, if we account for the average of about 20,000 new citizens and 30,000 new PRs granted per year, as those who are working would automatically be reclassified as local workers.

These figures may indicate that the playing field may not be level for Singaporeans vis-a-vis foreigners, like Malaysians.

Employers can hire 100 percent Malaysians?

It is not uncommon to see a Singaporean employer hiring entirely non-Singaporeans, because under the foreign worker quota rules in Singapore, a company can have unlimited employment of permanent residents and employment pass holders.

This can be up to 20 percent of S-pass workers and 40 percent of Malaysian work permit holders in certain sectors.

For other work permit holders, such as those from China or India, the quota may be much lower, at generally 10 percent, compared with 40 percent for Malaysians.

NONETo illustrate this: A company can have 100 percent Malaysian permanent residents, 100 percent employment pass Malaysians, 100 percent mixture of Malaysian permanent residents and employment pass holders, 50 percent Malaysian permanent residents with 20 percent S-pass and 30 percent Malaysian work permit holders.

Are there any developed countries in the world that allow the unlimited hiring of foreigners, like Malaysians?

Most Singaporeans may have no issue with highly-skilled and highly-salaried foreigners coming to work in our country.

However, they may be concerned about the almost unrestricted hiring of lower-paid and arguably not much higher-skilled foreigners, be they Malaysians or others, who may be competing unfairly with Singaporeans for jobs.

These liberal foreign labour policies have resulted in about 47 per cent of the total workforce being non-Singaporeans, before accounting for new citizens.

Leong Sze Hian

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.