The better way to create well-paying jobs for Singaporeans

In Parliament yesterday, Trade and Industry Minister Chan Chun Sing addressed the issue of striking a balance between hiring foreigners to grow the economy and fairness to the local workforce. Excerpts of his response to questions by Mr Pritam Singh and Mr Liang Eng Hwa follow.

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.

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 (professionals, managers, executives and technicians) 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 bring in only 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.

How do we grow our existing companies and bring in new investments that can create good jobs for Singaporeans?

THE INVESTMENT QUESTION

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 far-fetched? No. It has happened before indeed in every generation throughout our history as an independent nation.

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.

Today, the same thing is happening with the ICT (information and communications technology) 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.

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? 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 (one).

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.

A FAIR, LEVEL PLAYING FIELD

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.

This is why MOM (Ministry of Manpower) has the Fair Consideration Framework and is continually updating the system to ensure a fair, level playing field for Singaporeans. MTI (Ministry of Trade and Industry) 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.

WHAT THE FIGURES SHOW

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.

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.

What about growth in earnings? Growth in real average monthly earnings for employed locals was 3.2 per cent per annum during this period. Higher than the 2.4 per cent per annum in the preceding three years. Higher than most other advanced economies, such as the US (0.5 per cent per annum), Japan (0.8 per cent per annum) and Germany (1.2 per cent per annum).

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 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 globe.

A version of this article appeared in the print edition of The Straits Times on January 07, 2020, with the headline 'The better way to create well-paying jobs for S'poreans'. Print Edition | Subscribe