10 April 2015

Are Foreign PMETs displacing Singaporean PMETs?

10 April 2015

Are Foreign PMETs displacing Singaporean PMETs?

Just a few days ago, mainstream media highlighted the growth of our foreign workforce numbers over the last 4 years, stirring up a tangle of anxieties over foreign competition for PMET jobs with locals. Many are concerned that foreign PMETs have displaced Singaporean PMETs. But is this really the case?  

Singaporean PMETs generally enjoy positive employment outcomes

Let me put this into perspective. For the above to be true, the unemployment rate of Singaporean PMETs must have risen significantly over the years. Yet, the fact remains that the unemployment rate of Singaporean PMETs remained low at 2.9% in 2014.

Some may say that even with low unemployment, Singaporeans have to settle for lower paying jobs due to the competition from foreigners.  But if this is widespread, the incomes of Singaporean PMETs must have remained stagnant or even declined over time.  That did not happen. In fact, the real  median income (adjusted for inflation) of Singaporean PMETs grew by about 2% per annum between 2009 and 2014 while those of median Singaporean workers grew by 2.1% per annum over the same period.

So the PMET job market is not a zero-sum game.  With the economy continuing to grow, there will be more jobs for Singaporeans if firms are able to get the talent they need to invest or expand their operations here. 

Am I implying that there is no problem with our reliance on foreign manpower?  No. We do have to grow our foreign manpower at a sustainable pace.  And we have been tightening our foreign workforce policy since 2011 as part of our overall quality growth strategy.  What I’m saying here is that the assumptions that more foreign PMETs = more Singaporean PMETs unemployed and in lower paying jobs are not borne out in numbers.  Singaporean holding PMETs jobs, like any other occupations will face challenges as businesses restructure. What matters at the end of the day is whether one has the necessary skills required to perform the job.

We have slowed down foreign workforce growth

Because of our tightening policies, we have significantly slowed the pace of growth in foreign PMETs. The growth rate of Employment Pass (EP) and S Pass holders has slowed from 20% in 2011 to 4% in 2014 year-on-year (see the chart below). 

Chart 1: EP and S Pass growth and growth rates 2011-2014 (as at Dec)

We will ensure Fair Employment Practices

At the Conference on Fair & Progressive Employment Practices on yesterday, I explained that where there are instances of unfair practices, nationality-based or otherwise, MOM will undertake a proper investigation. We will protect the interest of our locals and not allow the festering of unfair hiring practices. However, we must allow for due process to take place so that the rule of law is respected.

We will step up support for Singaporean PMETs

Along with a growing economy, our measures to tighten inflow of foreign workers and ensure fair employment practices have brought about good employment outcomes for Singaporean PMETs. However, let us not be complacent. There are individuals who will need help to update their skills and find new jobs.

We want to help Singaporeans have the right skills to take on new and meaningful job opportunities being created.  We will enhance funding support for mid-career Singaporeans. Education and training subsidies for all Singaporeans aged 40 and above have increased to a minimum of 90% of training costs for courses funded by MOE and WDA. This is a substantial increase from the current minimum subsidy of 75% for MOE courses, and 50-70% subsidy for WDA-supported courses. We have also substantially increased the monthly salary support given to employers who hire PMETs in Professional Conversion Programmes, from the previous 70% of basic monthly salary, to 90%. This enhanced support is targeted at PMETs who are aged 40 years and above, or those unemployed for six months or more.

We hope the above will benefit Singaporean PMETs substantially and put them on a good course towards realising their dreams and aspirations.

Minister for Manpower and Minister for Social and Family Development
Tan Chuan-Jin

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