SINGAPORE: To have zero growth in the foreign workforce may be a theoretical possibility but in reality, it is “very hard to achieve … without serious implications and trade-off” for the economy, said Trade and Industry Minister Chan Chun Sing in Parliament on Tuesday (Feb 4).
Mr Chan outlined three scenarios in his response to a supplementary question from Holland-Bukit Timah GRC Member of Parliament (MP) Liang Eng Hwa, who asked why Singapore cannot work towards zero foreign manpower growth.
In the first scenario, two new higher-paying jobs will be created from a new investment secured by Singapore. Without fresh foreign workers, the only way for this investment to materialise is for two Singaporeans to take up the new jobs.
But given how the local labour market is near full employment and labour force participation rate already among the highest in the world, there is “very little spare capacity”, said Mr Chan.
With that, chances are that Singapore may have to forgo this investment, he added.
The second scenario assumes that two Singaporeans have been put into the higher-paying jobs created by the new investment. However with zero foreign workforce growth, replacements will not be found for the job positions that have been vacated by these two Singaporeans.
This, in turn, renders the company with the unfilled roles unsustainable and could mean potential job losses for the other Singaporeans it hires, said Mr Chan.
The third scenario, which the minister described as “ideal” involves retraining workers and improving productivity to fulfil the labour demands of the new investment.
However, this is “not easy to do” as the opportunities for productivity growth differ across industries, he said, raising the example of services which have lagged behind the manufacturing sector in productivity.
The speed and scale in which workers can be retrained also depend on many factors, he added.
“Whether we can do it in time to catch the new investment is always uncertain.”
READ: Balanced approach to foreign workers needed to ensure continued creation of good jobs for Singaporeans: Chan Chun Sing
Singapore’s strategy is to “win (these) investment first” and then work hard to quickly upgrade the skills of the local workers so that they can take over these higher-paying jobs “as soon as possible”, said Mr Chan in an earlier parliamentary reply on how quality jobs are created for Singaporeans.
As part of the process of attracting high-quality investments, foreign manpower “at different skill levels” may be needed to complement the local workforce, he explained.
Otherwise, it could mean losing a quality investment, which can translate into the loss of economic competitiveness and good job opportunities for Singaporeans of this generation and the future.
“To grow our economy and job opportunities, we will always need a certain local-foreign complement, both in terms of quality and quantity,” he said.
Mr Chan also noted with Singapore’s low resident total fertility rate, the local labour force will peak over the next ten years even with the planned increase in retirement age.
“So while (zero foreign manpower growth) is a theoretical possibility, we should not take it lightly and assume that there are no serious implication,” he said.
“We must be careful not to crash the gears and make our enterprises suffer the consequences of the lack of capacity to circulate and regenerate capacity.
“We must also be cognisant of the ability and the pace which we can re-skill and upgrade our workers,” he added.
STRIKING A BALANCE
At the same time, the Government is cognisant that the foreign workforce “cannot grow indefinitely” and the strategy is one that “requires constant fine-tuning” to get the balance right for both enterprises and workers.
“Too many foreign workers … our local workforce feels overwhelmed. Too few, our local enterprises and workers are unable to achieve scale or competitiveness for the global market,” said Mr Chan.
He added that there is also the need to diversify the country’s foreign manpower sources so as to avoid being overly-reliant on one particular source from a business continuity perspective.
From a societal perspective, the Government needs to “manage the externalities associated with too high a concentration of any particular foreign labour source”.
“Singapore is a diverse cosmopolitan and inclusive society, but we must also not ignore the public discomfort that can surface with too high a concentration of any particular foreign worker group,” he said.
“We must manage the number and quality of the foreign (workforce) to strike a good balance between economic needs and social acceptance.”
Mr Chan also said the Government will continue to help Singaporeans improve their skills and productivity, through the formal education system and investments in training such as the SkillsFuture programmes.
Authorities will also ensure that Singaporeans are fairly treated at work. Errant companies who treat local workers unfairly can expect to face enforcement actions and penalties, he said.
ASKING FOR DATA TO UNDERSTAND THE GOVERNMENT’S PERSPECTIVE: WP
In his reply, Mr Chan had described the supplementary question by Mr Liang as one which has been raised previously, including by the Workers’ Party (WP).
To that, WP chief Pritam Singh said the party had suggested zero foreign manpower growth in the context of the debate over the Government’s Population White Paper in 2013.
“The position then was keeping the foreign workforce numbers constant, but if 1 per cent resident workforce growth was achieved,” said Mr Singh, while asking if there will be a debate soon on the country’s population policy.
Mr Chan responded that a 1 per cent resident workforce growth is “very significant”.
“Given our total fertility rate, it is not a given that we will be anywhere near this,” he said. “To what extent we can bring in fresh immigrants … this is also not a given. Whether Singapore can be the choice location for other people, is an open question.”
Singapore’s economic growth ahead is also not a given. The ongoing outbreak of the novel coronavirus, of one, will have a “significant impact” on the economy, added the minister.
Senior Minister of State for Trade and Industry Chee Hong Tat then sought clarifications from Mr Singh, including whether the Workers' Party supports the need for a local-foreign workforce complement.
Mr Singh replied: “All the time we asked for data is not data for the sake of data; it's to understand the Government’s perspective.
“Because it is not a case of throwing whatever the Government is saying out the window or turning up our noses at it. Certainly, we have to look at it very carefully and if the Government makes a compelling case, then there is no reason for us to be objectionable about it.
He added: “But it is certainly something we have to look at and that is why my initial question was about when are we reviewing the overall population plan, which was discussed in 2013 and the timeline is at the end of the decade.
“I think we will be in a better position to answer your questions and provide another perspective to the Government’s plans at that point.”
Tuesday’s session followed an exchange between Mr Chan and Mr Singh in Parliament last month, over a breakdown of the number of new jobs that went to Singaporeans, permanent residents and foreigners.
After which, Mr Chan announced statistics to show that out of the nearly 60,000 new jobs created for the local workforce between 2015 and 2018, about 50,000 went to Singaporeans and more than 9,000 went to PRs.
The Manpower Ministry also brought forward the release of an occasional paper, which showed labour market trends of Singapore citizens tracking closely to those of residents.