The Pandemic Exposes the Fallacious and Mendacious Reasoning Behind the PAP’s Foreign Worker Policy
In a statement on 16 March 2021 Ministry of Manpower (MOM) revealed that total employment dropped by 166,000 in 2020. However more than 100% of this was accounted for by the drop in non-resident employment (-181.50000) while resident employment actually rose by 14,900..
MOM’s presentation of statistics is confusing to say the least, with the obvious intention of gaslighting Singaporeans. I have advocated for years that we need an independent Statistics Authority such as in the UK. For instance the drop in non-resident employment was nearly 13% of the entire non-resident workforce in 2019 and nearly 5% of the total workforce. This was the biggest drop in two decades! Yet figures from Statistics SIngapore show the total labour force (which is defined as the total of employed and unemployed persons over 15) only shrank by 29,000 while the overall unemployment rate only rose from 2.3% to 3%. Resident unemployment rose from 3.1% to 4.1% and citizen unemployment from 3.3% to 4.2%. Presumably the majority of the non-resident workers were repatriated after losing their jobs resulting in only a modest rise in unemployment rather than the 5% rise that should have occurred.
MOM’s statistics also show the participation rate (which is the employed labour force divided by the population over 16) actually rising between 2019 and 2020 from 68% to 68.1% which again is undoubtedly the result of unemployed non-resident workers being sent home. The participation rate of course looks artificially high compared to other developed economies precisely because some 40% of the workforce is non-resident and if they lose their jobs they are sent home almost immediately. While this flatters the overall unemployment rate, the resident unemployment rate is also artificially low because Singaporean NSmen will be counted as employed. Similarly those doing subsidised SkillsFuture courses of questionable merit will be excluded from the unemployment statistics which is one of the reasons why the Government is so keen on ensuring laid-off workers embark on “retraining.”
Compared to the US, which experienced a big jump in productivity during the pandemic, Singapore’s performance has been mediocre. Real value added per hour worked only rose by 1.3% in 2020 but real value added declined by 3.4%. This is largely the result of the Jobs Support Scheme (JSS), which kept people in jobs even if, as in the case of aviation and tourism, there may have been a permanent shift in demand. It would probably be better, as in the US, to provide unemployment benefits and universal income during this period, to allow labour to be redeployed to sectors with better future prospects. The actual fiscal impact of the JSS, like the new Jobs Growth Incentive, is obscure since a lot of the money flowed to Government-owned companies. One reason for it may have been to protect the positions and salaries of the PAP-linked, and in many cases related by marriage or blood, of the management of these companies.
What the Government cannot hide, and what these statistics tell us is the fact that a large part of the foreign workforce is unnecessary. The PAP have always said, and Singaporeans have mostly accepted, is that the elasticity of substitution between foreign workers and Singaporeans is low and therefore that they are not competing with Singaporeans for jobs. In layman’s terms, they are supposed to be doing the jobs Singaporeans do not want. In particular, the PAP have pretended that they do not keep wages and working conditions for Singaporeans lower than they would otherwise be, or at least not significantly. Instead the PAP have always said that the foreign workforce is complementary. These lies have been firmly put to rest by the pandemic. Employment of non-residents fell by 182,000 but the employment of residents (citizens and PRs) expanded by nearly 15,000. While it still does not explain why, if this is the case, the citizen unemployment rate rose a full % when the population did not change, this fact should finally lay to rest the myth, propagated by the PAP, that a foreign workforce of nearly the same size as the resident workforce is essential if Singapore is to prosper. If the PAP Government tries to return to the status quo after the pandemic is over, Singaporeans should wise up.