COMMENT When I talk to my Malaysian and Singaporean friends, the conversation often gets to the very wide subject of whether Malaysians who settled in Singapore are better off than if they had stayed in Malaysia.

One day, we kind of agreed to narrow down the debate to what may really matters. Have the wages of those Malaysians who settled in Singapore, gone up?

But it may not be an issue for those who are doing well.

It is generally understood that most of the Malaysians who first came to Singapore to work were generally lower-income, lower-skilled and less-educated.

Most came initially under a work permit (salary below S$1,800 [RM4,302]), with lesser Malaysians under S-Pass (salary S$1,800 to S$2,499 [RM5,972]), and employment-pass
(salary S$2,500 [RM5,974] and above).

They form the smallest numbers among all Malaysian workers in Singapore.

After a short period of three months, Malaysians can apply to become Singapore permanent residents (PRs), like the Malaysian husband of my Singaporean friend who recently married him, and is not even staying or working in Singapore.

In fact, the statistics show that Malaysians form the largest group among all PRs in Singapore. About one in four (23 percent) of the resident population – Singaporeans and PRs – were not born in Singapore.

Of that 23 percent, about half (45 percent) are from Malaysia.

Some Malaysians eventually decide to become citizens because of the higher subsidies for public housing, healthcare etc, for Singapore citizens compared to Malaysian PRs.

Unfortunately, the statistics for this category are not published in Singapore. Are the stats available in Malaysia as to how many Malaysians have become Singaporeans?

Are Malaysians better off?

So, how do we evaluate the economic status and well-being of those Malaysians who settled in Singapore as PRs, citizens or long-term dependent or student passes, who may be finding it hard to make ends meet in Singapore?

Well, let’s look at the latest wage increase, jobs assistance and financial assistance statistics in Singapore.

Social welfare

The number of Comcare (Singapore’s social welfare assistance scheme for needy families) applicants dropped by 11 percent in the first nine months of this year, compared to the same period last year.

In one news report, the example was given of a recipient, Mdm Lee, 78, who had stopped working six years ago as a cleaner, earning about S$400 (RM956) to S$500 (RM1,195) a month, receiving S$360 (RM860) a month to pay for her rental, bills and food, but the maximum duration of assistance given under this fund is three months.

Why is it that the maximum duration of assistance given under the fund is three months?

Are there similar three-month limits in Malaysia’s social welfare system for needy people like Mdm Lee?

Wages

According to a news report in 2007, in the last 10 years, the starting salaries of all occupational groups rose – except one.

That group: cleaners and labourers saw their median monthly starting pay fall 30 percent between 1996 and 2006 – from S$860 (RM2,055) to S$600 (RM1,434).

At the bottom of the heap were office cleaners and aircraft loaders. They start with a monthly pay of S$500 (RM1,195) and S$550 (RM1,314) respectively.

Anecdotally, many of the cleaners and labourers I have met are Malaysians because under the Singapore foreign workers quota, about five Malaysian workers can be employed to every one worker from a non-traditional source like China, and also because most Malaysians speak the local languages more fluently and are able to assimilate better in Singapore.

Singapore labour economists blame two forces: competition from low-skilled foreign workers and the growing trend of outsourcing.

The plight of low-wage workers – with stagnant or shrinking pay packets – is an issue the Singapore government and labour movement have been grappling with for some time.

Malaysians suffer from declining wages?

Three years ago, the Job Recreation Programme (JRP) was set up to boost the productivity and pay of low-skilled jobs in several sectors in Singapore, from cleaning to construction.

Now, after three years, the latest available data indicate that the wages of the job category, cleaners, labourers and general workers, continue to linger at S$650 (RM1,553).

And coincidently, the third highest unemployment rate, at 5.3 percent, was in this category, and productivity also fell in the last three years.

Hence, it may now be poignant to revisit the Singapore labour chief’s remarks made three years ago, as they may affect Malaysians working in Singapore too:

“Mr Lim Swee Say, the labour chief, said he suspected the easy entry of cheap foreign workers in some sectors has reduced the incentive for employers to improve work processes and raise productivity, since it is easier and cheaper to hire cheap, than to invest in better work processes.

“But he made clear he was not opposed to foreign workers, saying that they contributed to the economy.”

The population of foreign workers, particularly lower-skilled workers, rose to record highs over the three years in Singapore.

Historically, Malaysia has also allowed millions of low-wage and low-skilled foreign workers into the country, which may have suppressed the wages of Malaysian workers.

“The downward pressure on the wages of low-wage workers will continue to be there for some time as there is no shortage of low-cost, low-skilled workers in the world,” said the report.

“There is no shortage of low-cost, low-skilled workers in the world”, but other countries do not allow so many to enter, like Singapore.
How many new foreign workers did Malaysia let in, in recent years?

“Different countries look for different solutions – from a minimum wage policy and closing the door on low-skilled foreign workers to paying foreign local workers the same wages. But Mr Lim calls these ‘easy solutions’ that do not necessarily work.

“He wants Singapore to focus on raising productivity. ‘When their productivity goes up, their pay will also go up without eroding business competitiveness.'”

Minimum wage

Similar remarks were made this year by PM Najib Razak who wants the 1.2 million government employees to raise productivity so that the government can work out a better deal for them including pushing up their salaries.

He said: “Their wages will be adjusted as we go along, provided productivity goes up. What is important is that the economy gets stronger, government revenue gets stronger”.

It is easy for the Singapore labour chief to say “these ‘easy solutions’ do not necessarily work”, but the stark fact and reality remains that none of the solutions tried by the Singapore labour movement has worked at all.

By the way, on Dec 2, 2010, Mr Lim once again gave the assurance that the bottom 20 percent of the Singapore workforce will also get help to improve their wages.

In this connection, at least in Malaysia, the implementation of a minimum wage has been passed by the Malaysian Parliament, and the dependence on foreign workers has not been rising at double-digit growth rates like in Singapore.

Next week: Part 2 – Is S’pore’s job market really booming?