Simplistic to Simply Say its Simplistic

Simplistic to say foreign workers depress local pay. (Straits Times, Aug 27)

IT IS 'very simplistic' to take the position that foreign workers depress the wages of Singaporeans.

Acting Manpower Minister Gan Kim Yong discredited this view yesterday in his reply to a question from Non-Constituency MP Sylvia Lim.

She said: 'It was reported that there was wage stagnation for the lowest income earners for the last 10 years, and the economists attribute the presence of foreign workers as a downward pressure on residents' wages. Does the minister agree with this assessment?'

Replying, Mr Gan noted that foreign workers form a big and growing pool in the services industry. Yet its wages were comparatively better.

'In 2007, total wages went up by 5.9 per cent in the overall economy. Services sector wages went up by 6.5 per cent, and this is a sector with growing numbers of foreign workers in 2007.

'Therefore the hypothesis that foreign workers depress wages is a very simplistic conclusion which may not be true,' he argued.

Ms Lim also cited an Institute of Policy Studies conference last year, at which economists called for a detailed study of Singapore's foreign-worker policies.

Will the Government do it, she asked.

Mr Gan said the Government constantly monitors the impact of foreign workers on the job market.

'We want to make sure that these foreign workers, while adding flexibility to our labour market, will not create a problem for our own local employees.'

This flexibility can be seen during a recession, when there would be a 'significant reduction' of these workers. But for local employment, the extent of the decline was 'much smaller', he said.

There was no need to do an independent study, he said, adding that his ministry monitors and studies the issue 'continuously because...we need to react quickly when the market changes'.

Ms Lim also asked if easy access to foreign workers in the services sector dissuaded bosses from upgrading the skills of locals.

Similarly, Madam Ho Geok Choo (West Coast GRC) asked if bosses think hiring Singaporeans would result in 'a loss of productive time' as they have to be sent for training.

Mr Gan replied: 'The presence of foreign workers does not hamper the training of our workers.'

A survey his ministry did last year shows the level of employer-supported training has been rising from 2002 to 2006 - 'a period when foreign employment also grew'.

He reiterated that Singapore has limited local manpower, adding: 'Foreign manpower has helped to augment our local workforce and enabled our economy to grow beyond what our indigenous workforce alone can support.'

NMP Sylvia Lim argued,
1) Lowest income earners haven't been earning any more than they did 10 years ago (reported to be so)
2) The experts (economists) blame it on the persence of foreign workers who depress wages

Mr Gan's reply,
1) In the services industry, (Is this where lowest income earners come from? hmm, I never knew that) wages were comparatively better even though foreign workers "form a big and growing pool". (can we swim there now?)
2) Proof? Overall economy, total wages went up by 5.9%, services sector wages went up by 6.5%.

Firstly, that detracts from the point that lowest income earners are suffering. Secondly, foreign workers are probably also forming big and growing pools in other sectors where the lowest income earners are hardest hit. Thirdly, people who lose their jobs because of foreign workers don't earn anything at all, so it's quite irrelevant to say that total wages has went up. Finally, inflation was 7.5%. That meagre 0.6% difference barely proves anything. If anything, the 5.9% and 6.5% figures just show that real income hasn't really been increasing. (7.5% > 5.9% or 6.5%)

Therefore, I conclude that the conclusion that "the hypothesis that foreign workers depress wages is a very simplistic conclusion which may not be true" is simplistic.

While I often find bones to pick with the dearth of talent many of our MPs suffer from, I am actually more in opposition to the way they justify their policies than the idea that these policies are truly bad. In fact, I pretty much agree with Alex Au in this article Selling Immigration.