WSJ: Influx of foreign workers decrease wages of Singaporeans, labor productivity & quality of life
January 14th, 2010 | 
Author: Written by Our Correspondent
A recent editorial published by the respected international newspaper Wall Street Journal claimed that the relentless influx of foreign workers in Singapore has helped to depress the wages of ordinary Singapore workers leading to a lower quality of life. (read article here)
Due to the ruling party’s myopic immigration policies, the number of foreigners has increased to 36 per cent of Singapore’s population, up from 14 per cent in 1990.
“Between 2005 and 2009, Singapore’s population surged by roughly 150,000 people a year to 5 million—among the fastest rates ever there—with 75% or more of the increase coming from foreigners,” Wall Street Journal reports.
The influx of cheap foreign labor helps to keep GDP growth impressive since they help to cut business costs and create new demands for good and services in the short run.
A significant proportion of Singapore ministers’ exorbitant salaries is pegged to Singapore’s annual growth rates – the higher the growth, the more money they bring home.
Prime Minister Lee Hsien Loong earns an estimated $3 million dollars a year, more than 6 times the annual salary of U.S. President Barack Obama. Even a Singapore minister earns more than the most powerful man in the world and Singapore has a land mass of only 0.000073 per cent of the United States.
Wall Street Journal estimates that “a third or more of Singapore’s 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations.”
However their arrival has depressed the wages of blue-collar workers, exacerbating Singapore’s income gap between the rich and the poor. Singapore has the highest income-gap among the 30 most developed countries in the world as measured by the Gini Coefficent, comparable to some third world nations like Kenya, Russia and Tunisia.
A long-term devastating effect of the mass immigration is that it appears to contribute directly to the decrease in labor productivity as companies continue to depend on cheap imported labor to keep their profit margins instead of innovating to make their businesses more efficient:
[Source: Wall Street Journal]
“Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 207—a phenomenon that could eventually translate into lower standards of living,” said WSJ.
In an interview with Mr Kenneth Jeyaretnam, an economist by training and the Secretary-General of the Reform Party, he opined that immigration has “kept our economic growth high but, at a tremendous cost.”
Another economist, Choy Keen Meng from NTU added that “relying on foreign labor to help boost growth is unsustainable” and that a “better model would involve the reining in immigration and accepting that Singapore is becoming a more mature economy like the U.S. or Europe, with a long-term growth rate of 3% to 5% a year.”
But then, a decreased growth rate will hurt the pockets of Singapore ministers who have been justifying their astronomical salaries on the grounds that they have “delivered” economic growth to Singapore when GDP figures can be easily popped up artificially by increasing the intake of foreigners without translating directly to a higher quality of life to its citizens.
Though Singapore is able to lose billions of dollars of national reserves from investment losses suffered by its two gigantic sovereign wealth funds GIC and Temasek Holdings, Singaporeans receive few social welfare benefits from the ruling party which has won 11 consecutive elections by overwhelming margins since first assuming power in 1959.
Wall Street Journal recounts the plight of 58 year old Singaporean Lee Ah Lee who makes 850 Singapore dollars a month (about US$600) clearing tables in a cafeteria, saying that the flood of immigrants has made it hard to make ends meet by pushing down blue-collar pay in Singapore.
Despite rising unhappiness and resentment among Singaporeans at its pro-foreigner policy, the ruling party is adamant that the influx of foreigners will continue to increase Singapore’s population eventually to 6.5 million people.
At the rate the ruling party is replacing native Singaporeans by their new pets from China, India, Vietnam, Malaysia, Indonesia, Myanmar, Bangladesh and even Nigeria, many Singaporeans may end up like Lee Ah Lee in their twilight years, finding themselves replaced by “foreign talents” and have no choice but to continue working till they drop dead and die to finance the hefty housing loans of their over-priced HDB flats built by the ruling party.
Posted in Editorial
Be a prime mover driver at PSA.
Job advertisement by PSA.
Prime Mover Drivers
Remuneration:
You will earn a monthly salary of $1280 (with NS) and an average monthly gross salary of between $1600 and $1900, including shift allowance, overtime and incentive payments.
Ha ha ha!
Under Lee Kuan Yew’s feudal meritocracy system, Singaporean workers will all become modern slaves.
Hey, can someone show this piece of advertisement to his son, the PM of Singapore?
Like or Dislike:
0 
0
I really feel that WSJ editors should be our MPs
Like or Dislike:
1 
0
labour productivity falling while rate of immigration was high does not necessarily mean that the fall in labour productivity was a result of the high rate of immigration. it might just be due the slumping of the economy, where people were made to work shorter weeks, etc.
having said that, i think a more robust study should be done to determine whether there is indeed a causal link (and not just a statistical correlation) between the two.
Like or Dislike:
0 
0
The WSJ article is stating what most of us already know. But it fails to address 2 points.
1) Price increase of HDB flats caused by FTs. – I am still not convinced on this. After studying the data, I do not reach this conclusion. Many of these FTs are earning less than $1000 per month. That is how they are undercutting the wages of native born S’poreans. How than do they qualify for and buy a flat? Also, the entire real estate market is controlled by the GLCs like HDB, LTA, URA, etc. They decide how much the price is and how many units are build. This is not a true market economy when it comes to property, rather a monopoly. HDB has been deliberately slowing construction for the last few years, and even now, are mostly entertaining Build To Order units. They have deliberately caused this shortage knowing that it will drive up demand, and hence their ability to charge more for flats. This ripples out into the resale market.
2)The influx of these new immigrants – I have a problem with them as immigrants. I have no doubt they are economic opportunists. But unlike real immigrants, these people do not bring their families here, they do not start a new life here, they are just working a job that pays much more than in their home country. By living in crammed shared accomodations, they send their monthly surplus back home to support their families. If they had to bring their families here, they would lose their competitive wage advantage because they cannot work anymore for a pittance due to the high fixed costs of living in S’pore.
Like or Dislike:
1 
0
Singaporeans, this issue of the influx of blue-collared immigrants into Singapore competing with Singapore workers and the shamelessly high Ministerial salaries are the 2 most crucial issues that will see the PAP loose votes in the coming election.
Like or Dislike:
0 
0
I think WSJ people understands the problems better than our MPs because they are standing from a more objective viewpoint.
Like or Dislike:
1 
0
Please excuse my expressions but I need to use them to emphasize my point.
The truth is that poor people were told not, too long ago, not to fuck too much or face harsh penalties. The policy: To the poor, limit your fucking time so as to produce not more than 2 kids per family. To the rich, go forth and procreate. Fuck and continue fucking to produce 3 or more babies because you can afford to give your kids better education and future. So what happened? The poor fucked less and produced less. The rich also fucked less and also produced less because they were more interested in pursuing their own careers. So what happened? We have a birth rate of 1.1 per family which is among the 5 lowest countries in the world. And this policy went on for many years without anyone telling the king that Singaporeans were not fucking enough. Instead we were still told to sacrifice more fucking time and work longer, just like the foreigners.
So what happened? We have a fucking big problem caused by the PAP. So big that we will become extinct in not too distant future unless we bring in foreign workers with foreign babies to replace those who were never born because of PAP “Don’t fuck too much” policy”.
So who bears the brunt now? Singaporeans. What went wrong? A govt who could not solve a simple fucking problem.
The mind boggles.
Like or Dislike:
4 
0
is life sustainable in Singapore?
in 1980s to 2000s, we work to eat and eat to live.
in 2000s thereafter, we work to pay our house and if there’s some more money, we spend to give our children additional classes. If there’s some spare change, then we’ll eat. Its just not a proper life Singaporeans are living. From a 110sqm 4-rm public housing at under SGD20k (Max 5 years loan) to a 90sqm 5-rm flat at over SGD500k (Max 30 years loan).
From 5-year to 30-years…enslaved by the mighty housing loan! its just a pity our mighty ministers still claim its affordable.
Maybe in 2015, the Public housing minister will bring in a 50-year loan so people can afford to pay for their lease-hold public housing that cost SGD1mill. Still affordable!
How about ERP that is tracked by GPS as soon as the engine of the car starts?
The Education Minister should implement a compulsory Teritary education system and make it legally binding for teritary educations to pitch a 10% annual school fees increment. This will certainly allow the ministers to peg their salaries to the best private service professionals! (By the way, how many ministers have quitted and worked in a non-GLC or TLC company, earning similar pay scales?)
Like or Dislike:
0 
0
Hi cheezeoff,
Your expression is indeed colorful and though I do not agree with the F…words I totally agree with you.
It was a human disaster implemented by the PAP Govt. with vigor and the sadness I feel for the MP who stood up against it from day one and eventually stepping down owing to his conscience Mr.Augustine Tan till today still doing God’s work for the sins of the govt. which he was part of.
The thousands of babies terminated @ KK for only $5.00 with no questions asked is a sin that is unforgivable and may the souls of the little one truly resting in the arms of God rest in peace.
Like or Dislike:
0 
0
@PeterL-cheezoff
Some folks’ lives are worth more than others even though they have spent more years than most other joe on earth.
Poor innocent “NEWTON” or “BUFFETT” or “GOH KENG SWEE” may actually had been in the making if not for the horreddous
killings of so many yet=to-born babies.
Trust us,the citizens who could have sufferred then,to be still the ones to bear the consequences of some smart chaps’
brutally unwise decision/s.
The current FT policy that displaces honest hardworking citizens would probably end up being our “responsibility” now for not being ‘cheaper and faster’ and later,when the policy itself failed when there is a mass exodus,we would still be blamed again for not being gracious or like some said ‘xenophobic’.
Did we “sack’ folks for losing loads and loads of taxpayers’ monies o has it now become thier “sole” property?
Singapore,oh,Singapore,where are we heading?
Even less qualified foreigners are now looked upon by the policy-makers who dare even to look down on us…
Things here are getting more and more upside down!
Like or Dislike:
0 
0
The growth of foreigners had increased the economy of Singapore and the GDP. Since ministers obscenely huge salaries are pegged to the GDP, the more foreigners the better for them.
They don’t have to worry if there are loses due to incompetency in investment by GIC and TH because this does not affect their salary. Their salaries are not peg to loses or their ill treatment of their people but mostly the GDP. The GDP grows but our people never grow, they say mainly we are not hard driving and striving then the PRC.
Once they bring more foreign workers into Singapore, they will be able to up their salaries because of increase in GDP. Singaporean become poorer is like you die your business, who care if you die on the street or jump from high rise building. They even get their minuscule lackey coming to tell us to leave Singapore if you are unhappy. This amount to driving out their own people out of their country.
Like or Dislike:
0 
0
Other than what is mentioned in the article, the influx of foreigners will eventually lead to an overall more chaotic Singapore which the Government may not even be able to control. The consequence might be a disaster.
The evidence is clear. As you see on the daily news, there are more and more crimes committed by foreigners here. Vietnamese pickpocket gang, PRC Chinese’s drop money gang, Indian prostitute killer, and so on. Years back, we do not have so much of such a problem. But this is only the tip of an iceberg.
With many of the these foreigners receiving little or no education, or having grown up in communist societies, in regions where morality and integrity are unheard of, or living in places where killing a human being is like sacrificing a goat, what would you expect from mixing such people into the Singaporean community of which have been taught their exact opposite? We are mixing ink to a glass of milk.
Sooner or later, we will have problem. These people does not believe in what we believe. They do not listen and have no fear (like many of us does) to the Government. Now, they are in a quantity that is significantly large to create huge problems. If something acts against their wishes, I do not see why they will not protest, destroy, or even kill. At that time, are we able to clear the mess? I am not trying to blow a problem out of proportion. But in every disaster, there are signs. I am afraid that the signs of our disaster are only starting to show.
But of course, I am not saying every foreigner here in Singapore is a potential criminal. But the evidence shows that more and more foreigners are committing more and more crimes in Singapore. Are we bringing in workers or criminals?
Like or Dislike:
0 
0
Blind pursuit of economic growth is meaningless especially when it is achieved by cheap imported labour. We are not big countries like the US, Canada and Australia. Bringing in low level migrants in our small island is dangerous. This sampan is rocking, society wise.
Like or Dislike:
0 
0
I hope the nexr GE will come by soon.
Like or Dislike:
0 
0
do we really need a critical mass of 6.5 million by 2015 in order to survive and compete in the world ? has the pap forgotten that small is also viable and is beautiful. we will have less social problems and our limited resources can be put to better use in looking after our local citizens.
Like or Dislike:
0 
0
good point on FT raising prices of HDBs. how can a bangladeshi or mainland chinese worker earning 1k a month in a food court clearing dishes, afford to buy a 245k two room flat? who is kidding who?
i take offence with what mah says – that HDB must be pegged to market prices. excuse me? isn’t HDB’s original and fundamental philosophy is to provide public housing at affordable prices for the man in the street? why are we paying private prices for what is essentially a public service?
Like or Dislike:
0 
0