How PAP screws up Singapore’s labor productivity with its “open door” policy to foreign workers
March 1st, 2010 | 
Author: OPINION
There is a lot of hype in the media lately about “productivity” which reflects a subtle shift in the PAP’s labor policies. What makes the change unusual is that the PAP leaders have been harping on the need for Singapore to continue importing foreign workers during the last few years.
As late as January this year, PAP’s octogenarian leader Lee Kuan Yew said in an interview with the National Geographic magazine that it is a “good thing” that Singapore welcomes so many Chinese immigrants as they are more “hard-driving” and “hard-striving” than locals.
Senior Minister Goh Chok Tong added that the number of foreign workers may increase in the next few years though the rate of inflow may slow down.
DPM Teo Chee Hean said yesterday that Singapore has made “good progress” in the past in its productivity drive which is why ”we have been able to move our economy forward and have good jobs for many Singaporeans.”
What “progress” is DPM Teo talking about when Singapore’s productivity had hardly grown during the past decade?
According to a press release from the Reform Party:
“In manufacturing alone our productivity grew by an average of 0.7% p.a. over the period 2000-08 whereas South Korea, Taiwan, Sweden and the US managed 7.4%, 5.2%, 4.8% and 4.6% respectively over the same period. Out of a group of 17 economies we were second from bottom.”
A recent Wall Street Journal editorial revealed that Singapore’s low labor productivity is a direct result of the easy availability of cheap foreign labor.
Companies have few incentives to invest in innovation and research to boost productivity as they can easily cut labor cost by employing foreign workers.
While in other developed countries, safeguards are put in place to protect the interests of local workers, Singaporeans are expected by the PAP to compete directly with the foreigners who are definitely cheaper than them, but not necessarily faster or better.
As noted in the graph below, Singapore’s labor productivity took a plunge from 2004 onwards when the inflow of foreigners started to pick up:
[Source: Kojakbt, 3in1kopitiam forum moderator]
This coincided with the beginning of Prime Minister Lee Hsien Loong’s tenure when he announced his ambitious plan to increase Singapore’s population to 6.5 million people by 2030 via immigration.
Without warning, the floodgates were opened to allow foreigners into the country indiscriminately. Whereas in the past, the foreigners given a permit to work in Singapore were either highly qualified or filled positions shunned by Singaporeans, they are now competing directly with them for limited jobs.
The foreign levy for foreign workers is so low that it hardly deters employers from hiring foreigners. The quota or dependency ration placed on the number of foreigners a company can employ is easily circumvented by getting earlier arrivals to take up PRs.
As citizens and PRs are both lumped together under the same category of “residents”, a company can theoretically employ 100 per cent foreigners without a single citizen so long the quota of PRs is met.
Now all of sudden, Prime Minister Lee Hsien Loong wants to raise Singapore’s productivity rate from 0.7 per cent to 3 per cent per annum – how is this target possible when our productivity has been falling consecutively for the past three years no thanks to the influx of foreign workers?
It is highly unlikely that Singapore can boost its productivity and growth rates which have been popped up artificially by cheap foreign labor.
Prominent economist Paul Krugman described Singapore as a “Paper Tiger” way back in the 1990s in his landmark article – “The Myth of Asia’s miracle”
Krugman wrote that Singapore’s productivity and growth were achieved through a “mobilization of resources that would have done Stalin proud”. but as they are based largely on one-time changes in behavior, they are unlikely to be repeated:
“Over the past generation the percentage of people employed has almost doubled; it cannot double again. A half-educated work force has been replaced by one in which the bulk of workers has high school diplomas; it is unlikely that a generation from now most Singaporeans will have Ph.D’s. And an investment share of 40 percent is amazingly high by any standard; a share of 7O percent would be ridiculous. So one can immediately conclude that Singapore is unlikely to achieve future growth rates comparable to those of the past.”
In the same manner, the room for Singapore’s continued growth in the next few decades is limited unless there is a giant leapt in labor productivity and innovation.
As the economies of China, India and other Asia countries become more advanced, it will be more difficult to lure their citizens over to Singapore.
For example, Malaysians and Filipinos workers are getting more expensive now and Singapore employers have to switch to Chinese, Indian and Burmese workers to keep the labor costs low.
Unfortunately, given Singapore’s export-oriented economy and its over-dependence on foreign direct investments, it will not be easy for the Singapore to wean off its chronic addiction to foreign labor.
The investments made in R&D are unlikely to bear fruits without a major revamp in Singapore’s political economy which is dominated by state-linked companies thereby stifling the emergence and growth of a vibrant SME sector.
In a recent speech made at the Civil Service College, prominent MIT political economist Professor Huang Yasheng urged Singapore to “rethink” its state management model which has “milked this system for all it is worth.”
“The private sector is the best way to grow the economy. It has the most productive, most innovative and entrepreneurial culture. The state-owned enterprise system doesn’t give you that….You are already hitting the wall. Retaining this strategy could mean sacrificing future growth that is possible only through a bigger, more dynamic private sector,” he said.
He also opined that Singapore should expand its private sector in order to compete with China and India:
“Maybe a better way is for the government to fund more basic research and then allow universities, private equity firms, venture capital firms and rich individuals to take care of the rest. That is because even when the state sector is well managed, it is not as innovative as the private sector, he says. From a technological development point of view, you need a bigger private sector to compete, to come up with new products, processes and technologies, to better compete with India and China.”
Without liberalizing both the economy and political landscape to allow for freedom of speech and independent thinking to thrive, it is foolhardly to expect the PAP’s one-dimensional and unimaginative approach to boost productivity to work.
It is time the PAP realizes that it is part of the problem itself and that it is becoming a stumbling block in Singapore’s future development.
Posted in Opinion
48 Responses to “How PAP screws up Singapore’s labor productivity with its “open door” policy to foreign workers”
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Great article. I was just reading about Uncle Teo msg to the pasir ris residents and was truely wondering if we had really increased our productivity. I believe the chart shows clearly that the government have an extremely flawed method of measuring productivity. It seems to have pegged productivity against the whole population, so as to justify the influx of cheap FT. Truth is the productivity had actually fallen. Those FT did not bring in any of their families, thus productivity will definitely increase. The chart had proven without discretion that comparing productivity per worker, our productivity had actually decreased for some years already
Looking at that graph, i will confess i have lost the last ounce of confidence in the system.
Can the leaders do an overhaul of the manpower policies for the sake of the country?
LSS, Gan KY are you able to respond.
Is there a Youtube version of this article? More visually stimulating helps in digestion of the info.
Good article.
KNOW THAT…
1. GCT as PM DID NOT Monitor Productivity. And PROOF of this is his recently flag up of IT having averaged only ONE Percent in the last TEN Years!!!
2. And neither DID LHL Monitor Productivity as DPM and after taking over the PM Baton from GCT!!! Also… LHL only in the 2nd half of last year… told a group of Lady Professionals that “… HE… CANNOT STOP THE NUMBERS FROM COMING IN”!!!
3. They are all ‘real-smug-smart’ AREN’T they”!!! As CAN’T even have the common sense to ask “The WHAT IF” questions to know THE Pros AND Cons of applying a new Policy!!! HWERE GOT PLANNING Hah??? WHY??? Because they begin and end just STARING at THE “DOLLAR SIGN” WITHOUT Any Common Sense!!! YO and YO YO!!! SING song and TALK cock!!! Like how to FIX the opposition if more comes into parliament!!! NUTS or NERDS!!! WHO ARE… THE Real DAFTS???
“Now all of sudden, Prime Minister Lee Hsien Loong wants to raise Singapore’s productivity rate from 0.7 per cent to 3 per cent per annum – how is this target possible when our productivity has been falling consecutively for the past three years no thanks to the influx of foreign workers?”
This is wrong as explained by RP.
Things have fallen so low. it is easy to have a 3% jump. Even with a 3% jump for the next 4 years, we only managed to catch up with the productivity level of the past while all the other nations grow their productivity further.
In time to come all our graduates’ certificates are worth as much as toilet paper. All those FT on S-pass are degree holders, and they are so much cheaper! Please vote out the MIW before you will see citizens begging, basking, becoming maids in their own country!
“While in other developed countries, safeguards are put in place to protect the interests of local workers, Singaporeans are expected by the PAP to compete directly with the foreigners who are definitely cheaper than them, but not necessarily faster or better.”
See, other countries government look after their citizens first and foreigners after that. How come ours not like that?
Puluzzing. Better to be born in other countries
If all local citizens have a good job , all other things will fall in place nicely .
1 ) marriage
2 ) birth rate
3 ) housing price
4 ) cpf contributions
5 ) GDP growth
BUT NOW , IT LOOKS LIKE EVERYTHING ELSE IS FAKE BECAUSE MOST LOCAL CITIZENS DO NOT HAVE A GOOD JOB . THE NUMBERS FROM THE PAPAYAS ARE ALL FAKE ..
Great job TR!!!
Keep on hammering on this issue until the PAP is hammered out of office!!!
The problem with Scholars Adminstrators and Politicians who get into Parliament via the Backdoor is that they are completely divorced from the actual situation at ground level and do not have an inkling on REAL productivity and even if they do because their Political Masters (the Highest paid in the World) expect them to “carry” out their policies these fawning and psychophantic servants protect their obscene salaries just do not bother to rock their own boat.
Cheap Labour does not mean higher Productivity…period.
PAP should raise their own productivity first !!
Look at our LKY – paid millions of dollars and only do forecasting work !
LHL – need so many senior minisiters to help him and yet paid so many million dollars again !!
Shameless PAP !!!!
How come I didn’t hear any “rebuttal” by Bootlickers or Ministry itself on Kojat’s findings using his Graph of Productivity vs Foreign labor ?
Does it mean, Kojak and Reform Party analysis is RIGHT ?
Why, Mumb all of a Sudden ????
Will the mistakes be perpetuated further?
Or will the sleeping “paper tiger” wake up from its slumber, realize its mistakes and seek to correct them?
Maybe, the “paper tiger” needs some waking up by the people??
//Sawdust
when there are fake certificates for NUS/NTU/SMU, these papers have become fake.
You never hear the same things with Harvard/cambridge and the likes.
Showing non-Apathetic readers here the graph no use wan.
The majority Apathetic are out there , unreachable by virtue of their conscious effort not to read such articles.
I hope LTK or Sylvia or Chiam pose this graph to any PAP person in parliament and demand for explainations.
Its when we have a strong need to get answers to questions like this one that reminds us that singaporeans should have voted more opposition in to parliament.
singaporeans, look what have you done.
the best thing that PAP can do for Singapore right now is to step down gracefully while they still can, otherwise we will just have to boot them out via the ballot box
VOTE FOR CHANGE, VOTE PAP OUT, VOTE OPPOSITION
I really salute the writers in this forum. You create awareness.
More importantly, you made the Govt wake up and connect to the ground finally. I remember reading an article on rented flats to foreigners. Today I read that they are already subleeting flats to Singaporeans, finally. Sometimes it maybe that those civil servants never feedback to their political masters. So it is not the fault of the PAP elite ?Ministers lah. so dun blame them. They are still doing a good job. We have not seen any good alternatives.
LEt’s just hope what they do is not for just for the elections….
Good Article. Pls continue the good job lest poor naive folks are brainwash by Shit Times.
Thanks to TR and other alternative voice site the PAP have finally taken notice that majority of people are very unhappy about their policies and are doing something finally,but unfortuntely not enough and a bit too late.
If the internet can make the PAP wake up and notice the grounds of dissatisfaction is swelling imagine what will happen if there is a very much enlarge oppositions in Parliament.Therefore we must take action now VOTE FOR THE OPPOSITION maybe the PAP will still be in control this coming term at least they will govern more in accordance with what the people wants.This term may not see a change in Garment but hopefully we will have a New Garment in the following term.
I am a proud support of PAP all these yrs. NOW, i am very unhappy with the Foreign Worker policy.
Drives down salary = Not enough money to find GF = not enough money to get married = no children = low birth rate in the country.
I strongly believe this affects across the board.
Productivity cannot come from high-tech machineries and better work practices and processes alone. If it can, productivity would have gone sky high worldwide.
Nasty bosses, managers and supervisors are the spanners in the works.
Screaming , cursing, swearing and sprewing expletives and vulgarities at subordinates like as natural as breathing are the products of our educational systems churning out selfish and self-centred spoilt brats, whho are destroyers of man.
There are many such educated hooligns in our midst.
A good suggestion:-
A vote for the PAP is a vote for the foreign talent policy which means more foreign workers to replace Singapore workers across the board. Therefore when come election vote wisely.
Does above sounds very familiar? Kind of tired of always being threatened PAP that a vote for Opposition is a vote for lowering housing prices, lower GDP etc.. We not stupid, we can also follow PAP threatening style.
Come election time, print and distribute above warnings to all households in Singapore.
@ Mr A good suggestion. We must be united! “Unity is Strength”.
They have been threating the old citizen who have no education in their background in the past fifty year. The younger generation must be aggressive againt this Pariah FamiLEE Goverment. Election time, Every orgin Singaporean must help to print & distribute above warnings to all households in Singapore especially the old citizen.We must bring the FamiLEE to court for murder & slaughter the innocent & defenceless fortus & sterilize the adult, Our belove Brother & Sister, The lost Generation. The FamiLEE must be Put to death.
How come the “MORONS-IN-WHITE” haven’t discover the anomaly that PRODUCTIVITY gain average about 1% over the last decade WHEN THE ENDLESS DRUM AND CHORUS CALL OF UPGRADING GOT LOUDER AND LOUDER BY THE MINUTE OVER THE LAST DECADE of qualification chase and skills learning?
The answer to that is the “skill upgrading” is either IDLE
RUBBISH POLITICAL TALK or the Government’s drive and support of upgrading spending a COMPLETE FAILURE which they DON’T KNOW WHY NOR INTERESTED IN DISCOVERING WHY.
As long as it is political rubbery talk and get votes – that REALLY MATTERS RIGHT? Or is it not?
Any simple mind can tell you that if you add different ethnicities together with no native cultural glue of mindset and mutual understanding, you are really mixing “oil” with “water” and “gas”. If gas “don’t talk” to oil and water below it, how can productivity goes up when “dogs” can talk to “cats” and both can’t talk to “rats” to get work done?? And when you add lizards, cockroaches, house fly to it in even greater numbers, PRODUCTIVITY DOES DOWN faster than the increase input contribution of these species in the workplace.
Is it not STAGGERING that some migrants and foreign workers needs training in basicliving English, how did they contribute to higher productivity at workplace?? The boss investing time, energy and focus in “hand holding”???
BUT OF COURSE, the lack of gel of different ethnicity depressing productivity was POLITICALLY TOO EXPLOSIVE FOR PUBLIC DEBATE in parliament because any compelling economic logic and surging evidence of productivity dilution of huge migration influx runs counter to political agenda of greater migration intake.
It is the case of left hand lying, the right hand must pretend don’t know. JUST KEEP SHOUTING PRODUCTIVITY DRIVE of UPGRADING but silent on how that upgrading is relevant to increasing productivity.
Wow, great idea indeed !!
“A vote for the PAP is a vote for the foreign talent policy which means more foreign workers to replace Singapore workers across the board. Therefore when come election vote wisely.”
Just imagine if we can truly have a grassroots movement, printing and distributing to all Singaporeans.
Why not it become opposition catchy line?
“A vote for the PAP is a vote for the foreign talent policy which means more foreign workers to replace Singapore workers across the board.”
Sounds good and effective.
From: Wo Hu Chang Long.
Agreed. There can be no more votes for the MORONS_IN_WHITE.
A vote for MIW is a vote for MORE FT coming to our shore to take away PMET jobs, confirmed plus chopped.
VOTE for OPP!
ypap can you please respond to this article?
As an employee in a non-manufacturing industry, I struggle to understand the relevance of the term “productivity”. If the general concept is less input for more output, then I guess that it means any of the following outcomes:
1. same pay, more work
2. less pay, same work
3. less pay, more work
It would seem there would be no incentive to be productive, except that the consequences would then likely be “no pay, no work” (i.e. get replaced by cheaper labour).
yeah man, fed up with stupid policy that downgrades local talent.
Let’s start a campaign with this tag line:
“A vote for the PAP is a vote for the foreign talent policy which means more foreign workers to replace Singapore workers across the board.”
PAP should know that when you pay peanut , you get monkey . Dont blame the FTs but blame the papayas who came up with this policy. ALL team should be booted out . Productivity problem is due to FTs , the papayas wont want to admit it , shame on them as a ruling party .
@doreme@hotmail.com on Tue, 2nd Mar 2010 12:35 am
shame on them as a ruling party??
That is so obvious but more importantly Shame on the citizens who voted them in the last time if they still do not wake up.
@ doreme@hotmail.com on Tue, 2nd Mar 2010 12:35 am
Productivity problem is due to FTs , the papayas wont want to admit it…”
OFF COURSE YOU ARE RIGHT!! BUT THEY WILL BE MIXED AND MATCHED TO PRETEND THAT FALLING PRODUCTIVITY IS PARTLY SINGAPOREANS WHO SPENT THEIR WHOLE LIFE UPGRADING QUALIFICATIONS AND SKILLS.
DID YOU SEE FOREIGN WORKERS (NOT STUDENTS) ATTENDING PART-TIME COURSES AFTER WORK TO IMPROVE THEIR SKILLS AND PRODUCTIVITY?
“Mr Goh was speaking at a dialogue at his Marine Parade constituency on Monday.
Addressing an audience of grassroots leaders and residents, he said for incomes to go up, productivity needs to follow suit, including that of foreign workers.”
http://sg.news.yahoo.com/cna/20100301/tap-829-sm-goh-says-budget-2010-transfor-231650b.html
How can foreign workers improve their productivity when they can’t even speak basic living English to attend skill training programs???
The truth about falling productivity HAS BEEN MUDDLED UP to tell a different political story.
VOTERS TAKE NOTE.
And of course, the more foreigners comes in, the faster productivity fell because quality contributions from Singaporeans got diluted more and more.
Here’s an example of productivity with the use of technology in Australia. Right now Optus is digging a trench under the footpath outside my office building where I work using a ‘mole’ driven by compressed air, i.e. the ‘mole’ is digging the trench on its own. There are only two workers on site to set it up and get it going. No ‘cheap’ labour here.
The funny thing about singaporeans is their perceived tolerance of all policies.
Which country is like this?
50 years in a row?
1st world. Democracy.
more good years.
If you were FT and had any common sense(wanting to make money and none of that self patronizing patriotic crap) you would have done the same and come to greener pastures.
Why not USA,Australia etc etc ,you may argue?Fuck,it is not because they are not talented enough.Use common sense ,people.Look,I shall demonstrate.
IT IS BECAUSE SINGAPORE IS FUCKING SAFE,SMALL AND THEY KNOW THE CITIZENS ONLY FORM OF COMPLAINING IS BY WHINING ONLINE.
If this was in another country,they would have to contend with blatant racism in their faces in everyday lives.Step into their shoes and understand the 2 important things in life.Surviving and making more money.
Unlike you morons,who continue living your lives under the very same government you people can’t stand being near with,I do what these FT do.
Go to their country and make a whole pile of cash. =D and then come back here enjoy it and do it again!
LKYandLHLtalks shit,
You are right. Our tertiary fees are not cheap though
Impose 14.5% Employer CPF Contribution Equivalent Levy on all foriegn workers. That’s fair.
//Titty McTits on Tue, 2nd Mar 2010 1:58 pm
Because of the minimum wage in Australia, foreign workers hired by Aussie biz are paid just as well as the locals. Eg. it is not uncommon for an IT worker from India to be paid up to 5 times more than what they could get in their home country. Typically about AUD71K per year excluding superannuation payment by employers.
Ask yourself, how many times have the Chinese PRC waiter or sale person mess up on your order or food?
Isn’t it obvious that productivity on this island has taken a nose dive?
This is the first time a developed nation degenerates into fourth world.
INTERNATIONAL COMPARISONS OF MANUFACTURING PRODUCTIVITY
http://www.bls.gov/news.release/pdf/prod4.pdf
MyNemesisJonas I think you’re refering to service, not productivity.
Anyway, wanna know why productivity going down? Because young singaporeans aren’t prepared to take on production jobs, because they think they’re too educated and too skilled for such work.
Ask yourself, how many of the young singaporeans that you know of would readily pick up a broom and earn their buck as a sweeper, or toilet cleaner, factory packager, or those jobs which 40+ to 50+ aunties and uncles do?
Precisely, because aunties and uncles do them, the young singaporeans think these jobs aren’t glamourous and not worthy, even if it puts food on the table. Young singaporeans are so pampered that they think its a given right to hold a job. For goodness sake, earn that right. Work your @ss off and prove that you’re better than the foreigners, instead of job hopping whenever your boss or work gets hard on you.
And we blame the government for low productivity rates? That’s just funny.
x12831
That is true.
I have an uncle who came from India,settled in Singapore ,got married,worked his way up to a director level of a tech firm and then decided to pursue better opportunities in Melbourne.
In his own words.FT come to India and stole their jobs,Singapore offers good pay and security and obviously he moves here .Now Australia provides something even better and he becomes filthy rich.
That is how the world works now,and I don’t think people can handle that sort of change very well.If I can get better opportunities in frigging Mongolia,I would.Now,if someone has a family,well too bad.Unless you can bring the entire gang over,which was what my uncle did.
That is life.Unfair.But you know what?You as the individual can make it fair.With a bit of luck.If not,you are fucked.Try anyways!
Impartialsuperboy I think that you are mistaken.
The layman definition of productivity could be taken as one person washing 100 plates a day compared to one person washing 200 plates a day; the latter being more productive. The national productivity problem that we are facing is a function of GDP output and number of workers. If you are producing $100Billion of output with 1.5million people or 2million people; the former will be more productive. As output cannot catchup with the increase in population. national productivity drops. As wages and standard of living has a direct relation to the national productivity, the standard of living for the people should have degraded since 2004.
The young generation lack of fighting spirit is a seperate issue.
PAP are doomed, Singapore minorities are fed up with stupid foreign talent policy, let’s say 60% of minorities are voting against PAP, we have approx 0.6×35% = 21% voting for opposition + die hard opposition fans of about 30% + 10% swing voters against PAP, we approximate 61% victory for opposition.
Opposition just have to follow PAP scare tactics (vote for opposition mean lower economic growth, lower salaries) and keep harping – (A vote for the PAP is a vote for the foreign talent policy which means more foreign workers to replace Singapore workers across the board.) Oh, yeah and opposition candidates don’t do funny things to screw up.
PAP tried to lower costs while they kept their eye off quality.
Failed. Productivity nose-dived.
Now these multi-million-dollar fools want to raise productivity while stuck with lowered quality and lowered motivation due to cost-cutting measures pressed into general society.
Good luck.
Well, at least Singapore is still 1st world in terms of ‘productivity’ talking.
What is productivity? What is the debate about? In Parliament itself?
What should be the first assignment for DPM Teo Chee Hean’s National Productivity and Continuation Education Council?
He should ask what is the productivity of the $13000-paid MPs and their Ministers when some of them take cat naps in Parliament with mouth wide opened in deep slumber, isn’t it?
Is it possible to wake them up to what is true and real productivity when sleeping on the job, isn’t it?