Tuesday, 4 March 2014

Does Tan Chuan Jin really know how to resolve the manpower crunch?

Like many first world countries, Singapore faces a problem of manpower crunch in manual labor, especially in construction trades like carpentry, construction, painting and brick laying. It hampers growth in labor-intensive sectors and reduce the capabilities of contractor companies to take on more businesses. The singular fix-all strategy adopted by the PAP government to tackle the problem of manpower shortage has always been consistent for the past few decades - through the exploitation of cheap foreign labor. When Singapore needed more maids during the 1990s, the earlier PAP leaders imported them from Philippines. Today Singapore need more manual labor, and the newer generation of PAP leaders simply copy-paste the same solution their predecessors adopted by importing workers from India, Bangladesh and China. In fact, the new batch of PAP leaders believe that this solution of importing cheap foreign labor has few repercussions and is sustainable in the long term. This use-and-throw concept entails the PAP culture the ruling elites are so proud of - Pragmatism. When you need them, you use them and once they outlived their usefulness, send them home.

Unfortunately for the new batch of PAP leaders we see today, they amplified the pragmatic trait of their predecessors. Economic growth at all costs - the apex of Pragmatism in PAP. Young leaders like the new Manpower Minister Tan Chuan Jin believe that there is only one way to address the problem of manpower crunch and find the sweet spot of raising productivity. The rules are simple:

1) To relieve the manpower crunch, import more foreign labor.
3) To raise productivity, reduce foreign worker quota.
4) If nothing works, try convincing everyone your policies can never be wrong because you are a million dollar talent and policies simply need time to take effect then continue applying rule 1, 2 and 3.

Unfortunately throughout the 2 years Tan Chuan Jin has been Minister, productivity growth for 2013 remains at 0%. So just recently, Minister Tan seems to have awaken from his insanity and started proposing something a little different to increase productivity. He wants to introduce a Minimum Quota for skilled foreign workers, otherwise known as R1 Work Permit Holders. These skilled foreign workers are legislated by the Manpower Ministry to command a Minimum Wage of $1600 (not for Singaporeans sorry). Yet again, this is another single minded solution which like the 4 rules above, do not solve Singapore's problem of a manpower crunch. Playing with quota ratios and price of levies will just increase inflation and have no impact on productivity at all. There is no value added in these manipulations, Tan Chuan Jin will just end up with low productivity and low manpower availability.

The logical strategy of increasing skilled workers is to attract people, including Singaporeans, to take up training, internship and education of the specific trade. If there are still few takers, implement an attractive trade-specific Minimum Wage. Given how dangerous and tiring these manual labor can be, it should be an alternative for people with little education to strike it rich through sheer hard work and real risk taking. This is, after all, a Meritocracy that rewards hard work. The only reason why Singapore is facing a manpower crunch is because Singapore is not a Meritocracy. No matter how many bricks a bricklayer in Singapore can lay and how many hours he clock, he can never earn enough to retire comfortably. The Singapore system is a discriminatory one that rewards and relegates people according to their education. Many people are poor not because they are not willing to work hard, but because they have no alternatives to break out of their poverty cycle in Singapore as compared to countries like Australia and Canada. Until the day Minister Tan acknowledge the absence of Meritocracy in Singapore and recognize that the current salaries for manual labor is depressed beyond recognition, Singapore will forever face a manpower crunch.

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