Cutting service industry foreign worker quotas

Cutting service industry foreign worker quotas

I see that the Government is getting flak from all quarters for announcing that foreign workers quota for services sector will be cut. Businesses are upset as they feel they cannot employ Singaporeans for these jobs. The people are upset as they feel they don’t want these jobs in the first place, and demand that the government should protect PMET jobs instead.

These views miss the big picture.

It is impossible to protect most PMET jobs through quotas.

Most PMETS are employed in businesses that are globally competitive, not locally competitive. Putting a quota here does not ensure that a local will get the job – the job will instead move to another country. Worse, if internationally mobile companies are not able to employ the people they need, they will just move somewhere where they can and nobody will get employed here. No taxes will be paid here. The local companies in these industries are competing with their counterparts internationally – if they cannot hire the best talent, they will just get employed by their overseas competitors. The best way to protect PMETs is to continually train them, and make sure they are globally competitive. In a globalised world, these jobs cannot be protected by quotas.

This is different from lower-end jobs in industries which are local and compete only locally. If a local restaurant is unable to hire a foreigner, he is forced to hire a local, perhaps at a higher salary. It is very unlikely the business owner is going to shut down and go open a restaurant in another country instead – these are small businesses. There will be however some repercussions for Singapore AS A WHOLE. If our service sector is unable to meet manpower demands, we will suffer as a tourist destination for example.

There is however a more important consideration:

It is impossible for us to expect to have a country where all the best PMET jobs are only filled by locals, and the service jobs by foreigners.

This seems to be what some locals seem to want.

These are also the same people who want foreigners to do all the jobs they don’t want, and then magically disappear from our society and not be on our MRTs, our public spaces, our shopping malls etc. If we import lots of foreigners to do the jobs we don’t want, then they will live and play amongst us. And this will cause all sorts of social issues.

The right thing to do is to make these service jobs, quality jobs that locals can do. Jobs that locals can do with dignity. By cutting the quota, some companies will close. But others will be forced to pay higher wages to hire locals. Or innovate and be more productive, which will also create local opportunities

We must be prepared to pay higher prices for services too – eating out will be more expensive for example – but this is what Singaporeans have to do as a whole to ensure that as many of us can hold meaningfully paid jobs. And not rely on cheap foreigners to keep prices down for us, whilst expecting all locals to be paid good wages.

This is Lala-land wishful thinking.

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