Singapore’s Foreigner Influx: Facts and Myths

by singaporearmchaircritic

This week the media published a report on the latest foreign workforce statistics released by Acting Manpower Minister Tan Chuan-Jin. A few days earlier there was another report on the Department of Statistics’ population data as at June 2012. The gist of the two reports is that the “non-resident” population, which encompasses foreign workers and other foreigners on dependent’s, long-term visit and student passes etc., has grown over the past year.

While the long and short of it may be gleaned from the reports, discerning readers will know better than to take the provided data at face value. To help us all see a clearer picture of the facts and myths about Singapore’s foreigner population and influx, I have compiled information on relevant government policies and statistics since 2010 in chronological order in my previous post.

My Table is here. Take note, in particular, of the parts highlighted in bold.

Facts and Myths

Let’s look at the facts first. The following charts show the population in absolute numbers from 2007 till date (sources: MOM and DOS).

Figure 1

As seen from above, the number of international students and dependents has grown significantly by an astounding 63,700 from last year. International students and dependents now comprise 17.4% of the total non-resident population. In comparison, this group of non-residents increased by 4,700 from 2010 to 2011.

Figure 2

Among the foreign workforce, S Pass holders increased by 14,200 this year (see Figure 2). Work Permit holders increased by 22,600 whereas Employment Pass (Q1, P1 & P2) holders decreased slightly by 700.

Now let’s look at the growth rates of these population groups.

Figure 3

Classifying the population groups into residents and non-residents, we can see that the growth rates of residents – citizens and PRs – are only slightly higher than the corresponding percentages in 2011.

Although the population of foreign workers in the non-resident group also grows by a slower rate this year, that of other non-residents – dependents and international students – is 32.4%, close to 13 times higher than last year’s growth rate of just 2.5%. The growth rates of this group appear highly erratic over the years; after peaking at 44% in 2009, it plunged to a negative growth of 4.2% in the subsequent year. This could be due to a sudden tightening of the inflow of dependents and students upon the realization that the floodgates were too wide-open from 2008 to 2009.

This about-turn shows poor policy planning. The lack of foresight also has other long-term repercussions on our population that may be hard to reverse.

Myth No. 1: Foreigners help to support our ageing population

In July this year, the National Population and Talent Division’s (NPTD) revealed that most of those granted PR (52%) and citizenship (62%) from 2007 to 2011 were NOT economically active. How and why did this happen?

We may deduce that these economically inactive new PRs and citizens were formerly dependents subsequently granted PR and citizenship. Since they do not hold jobs, these new PRs and citizens will only add to our burden as the population ages.

What about the government’s justification that we need the inflow of foreigners to prop up the ratio of working adults to each elderly?

This only applies to importing foreign workers who return home after their employment ends, and not economically inactive PRs and citizens who stay on in Singapore and eventually become part of the ageing population that needs to be supported by younger working adults.

And thus, this NPTD occasional paper has made a flawed argument by suggesting that “An inflow of 25K new citizens per year would keep the size of our working-age citizen population relatively stable” (p.7; emphasis mine).

But perhaps we need PRs, even if they are not economically active, to prop up our low birth rates?

Wrong again.

Census 2010 showed that PRs were having less babies than citizens across all age groups. In this case, the influx of PRs will further depress our already dismal Total Fertility Rate (TFR) and, in time to come, worsen the ageing of our resident population.

The startling jump in the number of dependents (and international students) this year may well be due to the rush to get approval for dependents entering Singapore before the stricter regulations kicked in from 1 September 2012 (see my Table).

Based on the facts that a majority of PRs and new citizens are economically inactive, and that the TFR of PRs is lower than that of  citizens across all age groups, the government has to screen this group carefully and be far more stringent in granting PR and citizenship.

Myth No. 2: Foreigners provide the expertise that locals lack

Figure 4

The government has claimed that foreigners help to “anchor jobs” for Singaporeans in two ways. One, by taking up low wage jobs that Singaporeans shun, and two, by providing the expertise that Singaporeans lack.

Fair enough. But what about mid-skilled jobs then? Are foreigners, i.e. S Pass holders, also competing with Singaporeans in more junior PMET positions?

From Figure 4, we can see that the growth rates of all categories of foreign workers have slowed this year, with that of the Employment Pass holders recording a negative rate of -0.4%. Although S Passes for mid-skilled workers also increased at a slower pace than the previous year, it still grew by 14,200 in absolute number.

According to Tan Chuan-Jin, “The ‘strong growth’ in S Passes is likely due to companies using them to bring in more junior-level professionals, managers and executives now that Employment Pass requirements have been tightened.”

I think there’s more to it.

Since July 2011, the qualifying salaries of S Pass and Employment Pass holders have been raised substantially. Effective from January 2012, there has been another round of increases. The qualifying salary of a S Pass holder is now $2000, whereas that of a Q1 Pass holder (the lowest grade of all Employment Pass holders) is $3000, up $500 from the qualifying salary before July 2011 (see Table).

It doesn’t take a lot to surmise that some unscrupulous employers, unwilling to pay an additional $500 to keep their foreign employee on Q1 Passes, have “downgraded” and applied for S Passes for the same employees upon expiry of their passes, or for new employees whom they would previously hire as Q1 Pass holders.

Since S Pass holders are “junior-level professionals, managers and executives,” it is hard to see why employers cannot find equally skilled Singaporeans to fill the positions. Or do employers prefer foreigners simply because Singaporeans are more expensive to hire with the employer CPF contributions?

If these mid-skilled junior workers are indeed scarce in some sectors, then let Singaporeans know which sectors these are.

Whatever it is, MOM should certainly keep its eyes wide open on this category of foreign workers and the companies applying for S Passes.

That’s all for now. There are still some issues to sort out based on the highlighted parts in my Table. I’ll deal with them in my next post.

(Note: This blogpost has been revised on 5 Oct based on a reader’s comment)