Stagnant Wages? It’s Your Own Fault.
Or so the government and its mouthpiece want you to believe.
I am referring to the recent onslaught of insults hurled at the Singaporean PMETs (professionals, managers, executives and technicians) in a string of articles published by our national mouthpiece, insinuating or blatantly accusing us of not deserving our wages; not being “hungry” enough, and being “pampered, mediocre, expensive and timid.”
Apart from being a self-corrective measure to counter the arguments of an earlier, relatively critical (by Straits Times’ standards) commentary “When wages fail to grow along with economy,” these write-ups are yet another low blow at ordinary Singaporeans to absolve the government of any blame for the problems we face today.
Yet if we look at Straits Times reports on the job situation of our PMETs from the 1990s, it becomes very apparent that the plight of today’s PMETs is a result of myopic government policies since the 1990s, i.e. its pro-immigration policy, the constant kowtowing to businesses that fed off cheap labor, and re-training that had failed to equip workers with the necessary skills.
PMET Retrenchment in the 1990s
Amid concerns about how companies were “delayering” or removing middle level executive positions due to technological advancements, employment pass holders in Singapore increased from 50,000 in 1994 to 70,000 in 1997 while work permit holders surged from 300,000 to 450,000 over the same period.
As the floodgates opened wide, Singapore saw 10,956 workers being retrenched in 1996 – a record since the 1985 economic recession during which 19,529 workers lost their jobs.
When many began to question if foreign workers were taking away the jobs, then Prime Minister Goh Chok Tong repeatedly justified the government’s decision to import foreign workers in 1997 and 1998.
In his 1998 National Day Rally speech, he said:
We must continue to bring in international talent…In today’s much harsher environment, some Singaporeans are questioning whether this is still the right policy. Workers have asked union leaders why we do not cut down the number of foreign workers here, and save jobs for Singaporeans.
I know many Singaporeans are concerned about their jobs. Architects are having a tough time and many of them cannot find employment. Likewise lawyers and doctors. I have met recent graduates who have applied for several jobs in the last two months but have not been called for a single interview…
There will be more retrenchments before we come out of the slump. But chasing away foreigners, hoping to free up more jobs for Singaporeans, will only make our problems worse…
And so in 1998, 29,000 workers lost their jobs, among whom 5,830 were PMETs. The PMET job loss was three times higher than that of 1997.
Amid the soaring PMET layoffs, a concurrent report made baffling claims that there were more job openings for PMETs in September 1998, “due to an on-going restructuring towards higher value-added and knowledge based activities.”
In 1999, the Manpower Ministry revealed that there were 530,000 foreigners in Singapore, among whom 80,000 were employment pass holders. There were another 14,622 people laid-off in the same year, among whom 24% (3,509) were PMETs.
Retrenched PMETs in the 2000s: A Permanent Fixture?
From 1990 to 2000, Singapore’s total population surged by one million. Of this, the number of citizens grew from 2.6 million to 3 million while that of permanent residents grew from 109,872 to 287,477. The non-resident population increased from 311,264 to 754,524 over the same period (source).
In the first half of 2000, 7,903 workers lost their jobs and about 24% (1,896) were PMETs. This trend persisted and worsened in the first half of 2001, when 38% of those axed were PMETs. Over four years, the number of unemployed degree and diploma holders aged 40 and above increased three-fold.
Despite all the schemes, retraining and skills upgrading to help PMETs, the jobless rate of PMETs continued to climb.
By September 2002, unemployment hit a 15-year high of 4.8%. As many as 12,900 graduates could not land a job, doubling the number in 1998. A resumé to a human resource company reads, “I am a system engineer and I have been job hunting for months. My last salary was $4,800 but I will work for $1,800.”
A total of 40,903 jobs were axed in 2002.
Curiously, a 2003 report claimed that “The share of jobs for managers, professionals and technicians, rose from 29.5 per cent in 1992 to 41.6 per cent last year.”
Yet thousands of degree holders could not land a job. And middle managers were also vulnerable, many mired in long-term unemployment.
So the question is: where did the increasing share of jobs for PMETs go to?
Jobs Vanished? Or…
By March 2003, 89,400 people were out of job, and more than 50% were PMETs.
Reports claimed, yet again, that technological advancements were “leading to the demise of droves of middle managers.”
A former bank manager with an annual pay packet of $60,000 was unable to find a job even though he was willing to go for a $1,000-a-month sales clerk position. Some of his retrenched banker friends had become taxi drivers in desperation.
Another 55-year-old former bank assistant manager took a pay cut from $4,000 to $1,100 to become an assistant cleaning supervisor.
In July 2003, two Nanyang Technological University (NTU) economists suggested that foreigners took three out of four jobs created in the last five years.
The government swiftly denied this and claimed that out of 10 new jobs, nine went to Singaporeans and PRs and only one to a foreigner (??!!).
When some MPs demanded, rightfully, for a breakdown of the number of jobs that went to citizens and PRs, this was what Acting Manpower Minister Ng Eng Hen said:
“What difference does it make? The ratio is unimportant when jobs are created.”
Effective from October 2003, the CPF rate was cut again from 36% to 33%. In December 2003, it was reported that 95,500 people were jobless, with a record of almost three in 10 seeking jobs for at least six months.
In the first quarter of 2004, PMETs again formed the biggest chunk (45%) of the 2,962 laid off. In 2005, an estimated 30,000 PMETs were out of job. According to a ST report dated 16 June 2005:
Employers have been lambasted for discriminating against them [retrenched middle managers] in favour of younger, cheaper recruits – essentially getting two, three energetic workers for the price of one … prejudice against retrenched executives aged between 40 and 50 is real…[there] is ample evidence of axed professionals who are ready to take huge pay cuts and still are jobless.
In December 2006, 8,100 PMETs were still unemployed. This was despite MOM figures which showed that PMET share of jobs had risen from 39% in 1996 to 47% in 2006 and that 173,300 new jobs were created.
Said Mr Sim, a retrenched IT manager who used to earn $7,500, “The pool of people looking for the same job is quite big now, compared to previously. There’s also competition from IT workers from China and India willing to do it for much less.”
In 2007, official figures showed that six in 10 of the new jobs went to foreigners, up from five in 10 in 2006.
The report claimed that “this has more to do with insufficient Singaporeans being available to fill the rising number of new vacancies, according to the report giving a breakdown of jobs held by citizens, permanent residents (PRs) and foreigners” (emphasis mine).
So what happened to the 8,100 unemployed PMETs who needed a job?
According to employers, the Singaporean PMETs could only blame themselves, of course.
Because local PMETs lacked the “skills relevant to the industries of the day,” “Bosses in trading houses and the infocomm, hospitality and retail sectors were thus hiring foreigners for middle management positions” (emphasis mine).
Hey presto! The “redundant” middle management positions that were supposedly vanishing in droves in the mid 1990s and early 2000s made a miraculous comeback.
The only problem is these positions were not for Singaporeans, who, after undergoing years and a myriad of skills upgrading, still did not make the cut in the eyes of the employers.
Is it because, as former National Wage Council chairman Lim Pin said, “Worker training is like trying to hit a moving target. The technology and skills required today are likely to be different from those needed five to 10 years from now”?
Or is it simply because employers prefer cheaper foreign workers?
We know that there are around 128,100 S-pass holders with a qualifying salary of $2,000 in Singapore in 2012. Their number has also grown by 14,200 from December 2011 to June 2012 (see Chart below). I have raised this question in an earlier blogpost and I will ask it here again:
Are cheaper foreign workers taking away jobs from Singaporeans?
Even Goh Chok Tong, who so strongly advocated bringing in foreign workers in the late 1990s, wasn’t sure anymore.
1. All sources are from The Straits Times unless otherwise stated. Executives focus on challenging wages to develop competitive edge, 27 May 1995. Preparing older execs for rapid changes – employers group to help mature executives cope, 18 Sep 1995.
2. Foreigners can propel two S’pores, 20 May 1999.
3. More older workers seek help to find jobs, 3 Jul 1997.
4. Manpower dilemma in an economic slowdown – Are the foreign workers taking away local jobs? 6 Sep 1998.
5. 5,800 execs lost their jobs last year, 16 Apr 1999.
6. Singapore labour – more jobs for those with higher skills, 5 Feb 1999.
7. Foreigners can propel two S’pores, 20 May 1999.
8. Paying what it takes for a first-class civil service, 30 Jun 2000.
9. NTUC to help execs cope with job changes, 13 Oct 2000.
10. More help for bosses hiring retrenched, 4 Oct 2001.
11. Downturn hits mature grads, 14 Sep 2001.
12. Courses launched to help laid-off workers. 19 Dec 2001; New scheme to help white-collar workers, 24 Nov 2001; More help for bosses hiring retrenched. 4 Oct 2001; NTUC to help execs cope with job changes, 13 Oct 2000.
13. More executives facing layoffs, 4 Mar 2002; No offer for 3 in 4 of those retrenched, 12 Jul 2002.
14. What do the grim figures mean to you? 23 Nov 2002; Record number of grads cannot find jobs, 14 Dec 2002.
15. What do the grim figures mean to you? 23 Nov 2002.
16. Another bad year ahead for the jobless, 15 Mar 2003.
17. There is no magic cure as lower-end jobs vanish, 15 Feb 2003.
18. You’ve got a degree. So What? 31 Jan 2003.
19. Job scene change, 7 Jul 2003.
20. Down but not out, 29 Jun 2003.
21. A year later, still a survivor, 29 Jun 2003.
22. Job-seekers, fussy? Not when reality bites, 12 Jul 2003.
23. Let us focus on getting jobs – Minister, 15 Aug 2003.
24. Let us focus on getting jobs – Minister, 15 Aug 2003.
25. CPF- 33% from October, 29 Aug 2003.
26. Labour market on the mend, 16 Dec 2003.
27. How older workers bounce back after they’ve been laid off, 15 Aug 2004.
28. Help wanted for white collar jobless. 14 Jun 2005.
29. White collar crunch, 16 Jun 2005.
30. The middle-aged, middle management squeeze, 16 Dec 2006.
31. More grads and skilled workers in workforce, 27 Jan 2007; How will Singaporeans react to influx of foreigners? 28 Feb 2007.
32. The middle-aged, middle management squeeze, 16 Dec 2006.
33. S’poreans losing out in job boom? Not so: MOM, 1 Mar 2008.
34. How will Singaporeans react to influx of foreigners? 28 Feb 2007.
35. Down but not out, 29 Jun 2003.
36. Should low-wage workers be afraid? 11 Jun 2005.