Historical wage growth 1.3%? FCF level playing field?

The Real Singapore

Nov 2, 2013


Wages expected to rise 4%?

I refer to the article “Wages set to rise 4% this year: HR experts” (Straits Times, Nov 2).

It states that “On Tuesday, the Monetary Authority of Singapore (MAS) said during its biannual macroeconomic review that the labour market will tighten and wage growth will be strong. It said overall wages are projected to rise by more than the historical average of 3.3 per cent annually for this year and next.”

Historical wage growth 1.3%?

Using data from the Department of Statistics, the historical annualised inflation from 1980 to 2012 was about 2.0 per cent.

So, since the historical average of overall wages was 3.3 per cent annually, does it mean that real wage growth over the last 32 years was only about 1.3 per cent per annum?

1% wage growth this year?

Since “The MAS expects consumer prices to rise by 2.5 to 3 per cent this year”, even if the increase in wages is 4 per cent as is being predicted now, the real increase in wages for the year may only be about as little as 1 per cent.

Influx of foreign workers?

To what extent has our liberal foreign labour policies in recent years contributed to the paltry rise in real wage growth?

Well, I think I got the answer in the same day’s newspaper when I read the article “PMEs’ best protection – the ability to adapt: They should focus on sharpening their edge and updating their skills” (Straits Times, Nov 2).

FCF  is about fair competition and not protection?

It states that “I worry that many have failed to register the point that the FCF is about fair competition and not protection.

It would be a tragedy if Singaporeans start to cling to the FCF as they would to a security blanket, and allow its introduction to lull them into a false sense of comfort.

For it is unrealistic for citizens of a small, open city state to expect the Government to protect them from competition.

Any form of protection can at best shield local PMEs temporarily. If companies are prevented from hiring the best people they can find, regardless of nationality, they may well review their operations here and consider relocating.

Far better for Singaporean PMEs to focus instead on how to sharpen their edge and update their skills and know-how, to keep employers interested and eager to recruit and retain them.

Such ongoing adjustments to rapid change in the labour market are the new reality for governments, employers and workers alike.

PMEs are no exception.

Their best security blanket is not protectionism but their own ability to accept and adapt to change.”

Level playing field?

How do Singaporeans who have continuously upgraded their skills and adapted, compete with the flood of foreigners who may be cheaper because they are willing to work for lower wages, cheaper because employers may not have to contribute CPF,  males who may not have national service reservist liability, females who may not get pregnant (work permit holders are not allowed to), are stuck with the same employer for 2 years (thus, no turnover problems), more qualified – experienced – younger and willing to work for cheaper pay and longer hours, etc?

You call this “ It is not about tilting the playing field in favour of Singaporeans, nor about keeping out foreigners with the skills and talents companies need”!

You call this “It is about creating a level playing field upon which local and foreign PMEs can compete fairly, on the basis of their skills, experience, attitude and other factors that have a bearing on their suitability for the jobs on offer”!

You call this “It would also be a mistake to pin the blame for the growing ranks of unemployed, middle- aged PMEs on foreigners when the source of the problem is most likely not discrimination, but a mismatch in skills”!

I am at a loss for words! – I am abhorred by such remarks which represent the mindset of our leadership in the Manpower Ministry and labour movement!


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.