Tuesday, June 26, 2012

ESM Goh : Do Immigrants Create Jobs?

Yesterday night on his Facebook ESM Goh posted:

Do skilled immigrants create jobs or take away jobs from locals?…This
subject is a hot button issue in Singapore. It would be good if economists could
research this subject in depth. It would help advance debate on this politically
sensitive issue.” - ESM Goh.

In a way, Singapore has to go into ‘cold-turkey’ after years of allowing huge
inflows of foreigners.
Politics should be about having the courage to make the
best decision at any given point in time, and act on it” - PAP MP Tin Peh Ling [Link]

It is strange that ESM Goh is asking the question now since he was the one who allowed the large influx to take place under his leadership. Shouldn't such questions be asked before policies are implemented? The PAP very often sold us this idea that "foreigners create jobs for Singaporeans" to promote the FT policy - it is strange to hear now that ESM Goh is not certain this is true. I appreciate his desire to "advance the debate" - it is long overdue and Singaporeans now know that things cannot be taken at face value be it "foreigners create jobs for Singaporeans", "foreigners help to improve your income" and so on. If everything the PAP said about the FT policy is true, we should all be jumping for joy and asking for more ..more and more. But this is not the case and a real in-depth debate is long overdue - our dependence on foreign labor might have grown to the point of irreversibility and I believe there are now long term unavoidable effects that may be unfavorable for the majority of Singaporeans.

ESM Goh asks the question in a very broad manner that makes it hard to collect data answer the question - how skilled is skilled? What is the meaning "take away jobs" ? If jobs are taken away shouldn't we see higher unemployment?  Also at what level of immigration do we see jobs "taken away"? Has Singapore crossed this level? . I know with some level of certainty some of the effects of immigration on our labor market and have written about them in the past. Here is a summary.

1. Falling productivity growth.

Chart from [Link]. This is a trend that goes bat to 2003 and correlates with the large influx of foreign labor. Correlation in itself does not equate to causation and causation is hard to prove. However, the most viable explanation is once employers have access to cheap foreign labor, there is less incentive to change work processes to improve productivity. Even the ESC (Economic Strategies Committee) set up the govt put forth this explanation in Dec 2009 when the found that Singapore's labor productivity lag behind all major developed countries[Link].

2. Widening Income Gap and stagnant wages
The influx of cheap labor depressed the wages of our low wage workers. The real wages of these workers have remain stagnant for last decade. At the same time,  the GDP growth generated by the large foreign influx resulted in gains  concentrated in a small segment - corporate profits as a % of GDP grew to record levels and the top brass in corporations whose remuneration depends on profits rather than productivity were the big winners.

3. Structural Unemployment

One of the growing problems we see in recent years is that of structural unemployment.  With our liberal foreign worker policy, hundreds of thouands of young workers from India, China, Phillipines etc were added to our workforce. Our workforce demographics has been distorted by this high influx. With a large pool of young workers available why would employers try to retain or hire older Singaporean workers? Remember in the past we never had the structural unemployment problem because during the boomtime, employers will have a hard time find workers and they are 'forced' to hire older workers and give them a chance and retain these workers even when labor market conditions ease. This does not happen today because there is a large supply of young foreign workers. Along side the structural unemployment problem is that of structural underemployment - highly qualified taxi drivers, highly qualified people taking up menial jobs because employers refuse to hire them due to age even though they have the qualifications resulting in an under-utilization of our high skilled Singaporean labor.

4, Rising cost of living

The large influx caused our population density to rise to the highest in the world putting  a strain on our infrastructure like public trains and public places and driving up the cost of living sharply when it comes to cars and housing. 

When the PAP open the floodgates to cheaper foreign labor, the one thing that was certain was it would drive up GDP growth and it did - any economy that allows a foreign influx will expand. Many of our economic competitors have chosen not to go down this path at least not with the same magnitude as the PAP govt.  Developed countries that allow foreign labor to enter also have minimum wage laws to prevent its own citizens from being exploited.  One of the problems in UK was unscrupulous employers flouted the minimum wage laws to exploit foreign worker (see video in previous posting).

As our GDP grew so did the number of people who needed help to make ends meet (Workfare, charity etc). The longer we stay on the model the more dependent our economy become dependent on foreign workers and the harder it is for us to break the cycle. MP Tin suggests we go "cold turkey". ..."cold turkey" is no different from "shock therapy". For MP Tin who started her political career "naively" sticking closely to PAP ideologies and strongly supporting PAP policies to say this after seeing first hand what is going on at the ground, tells us how far down this road we have traveled. It is now so difficult turn things around and remodel our economy to maximise benefits to Singaporeans.  


Anonymous said...

Very good observation. Wonder why none of the brilliant, talented and very well paid pap mps bring this up. Have they forgotten that 60% voted for them? Could the 60% be like the children in the Pied Piper story?

Anonymous said...

Actually not to worry. For PAP that is.

Because whether cold turkey or not, foreigner create jobs or not, at the end of the day, PAP remains the best available party to vote for at every election.

But if I were a ordinary PAP MP, I will also say something like cold turkey lah. Nothing to lose right, tio bo?

In fact even if I say PAP govt did not do enough for poor Singaporeans, PAP won't sack me and call a by election, right?

I will still keep my MP post until 2016, right?

Anonymous said...

ESM Goh Chok Tong is having doubt of himself now. He jokes as well as Lim Sweet Say if not better.

Clear eyed said...

Dear Lucky

I am less inclinced to be charitable towards both ESM Goh and Tin Pei Ling. I see them both as nothing more than clowns mouthing from a script prepared by the Grand Master to create the illusion that there is no group think in the Party and that in fact the Party is made up of people of intelligence and conscience. It would be sad if Singaporeans were to fall for this trick and continue to vote for them.

Anonymous said...

I think unless a PAP MP commits an offence that fine more than $2000 or jailed, or dies, a PAP MP is guaranteed of his MP post for at least 5 years with a monthly $15000 allowance.

What do you think?

Anonymous said...

What kind of stupid title ESM?
Woody Goh mother of all lies, a failure during his term as PM.What kind of trash is he frowning about? To hell with him and his 80 clown jokers. Had them uplift the standard of Singaporean? Just get out of our sight.

Anonymous said...

I have come across a very interesting article.

Seems to me it is a very good reflection of Singapore's immigration policy:

Is Population Growth a Ponzi Scheme? by Joseph Chamie - The Globalist

Anonymous said...

Opps. Here is the link


Anonymous said...

Maximise benefits for who again? You mean the poor chap at the far far back of the queue.

Anonymous said...

It is the blind, deaf,cowardly and 'Tiada-apa' attitude of the 60.1% that is causing the 100% more pain.

Anonymous said...

Lucky please don't be taken for a ride by the PAP. This looks like a wayang show to me. People please don't be fooled by them. This is all a scam. Let 2016 be the final downfall of PAP.

Anonymous said...

2.1% unemployment rate is very misleading.

It has totally masked the number of former middle-class Singapore PMETs who are now employed as security guards, taxi drivers, clerks and technicians, all taking a pay cut of up to 75% of their former incomes.

Anonymous said...

Yes jobs created by immigrants FOR immigrants.

gm . 绿效精神 said...

Without serious stand to reduce the intake of foreigner, the fallacy of PAP strange believe in PR/ foreigner dependency will continue to be abused in Singapore (resisting minimum wage/ job quota/ ...).

The other challenges are how willingly ministries/ statutory boards/ GLCs/ DBS/ SIA/ SingTel and other local companies (in Singapore) will put the citizens’ interest to achieve meaningful growth together (till retirement/ death).



Anonymous said...

ESM GOH, Do immigrants create or take away jobs?

ESM GOH: oh, I dont know, I dont what to say (stomp,stomp his feet)

Lye Khuen Way said...

Since when have PAP ex-minister & serving MP start speaking their mind, so to speak?

Good if they have searched their souls and would like to be for once a MP for the people.

Many of us are however, too sceptical .

We sure live in a Brave New World......

Anonymous said...

We now have more comedians in the PAP

Its going to be an entertaining term til 2016.

Anonymous said...


ESM GOH, Do immigrants create or take away jobs?

DPM TEO, What do you think?

Anonymous said...

Do immigrants create jobs?

What do you think?
I don't want to give you the answer.

I want you to think.

Anonymous said...

Do immigrants give Singaporeans a Swiss standard of living?

A bit late to ask the question.
What do you think?

Anonymous said...

Hi Lucky,

I do not know the intention of this writer after reading his post but definately disappointed with the title of the topic he choose.

Could you please give your thought on this?



Anonymous said...

everyone should keep on chanting this in their mind until 2016
vote for opposition
vote for opposition
vote for opposition
vote for opposition
vote for opposition'

comes 2016, just go into the station and X in the space belonging to the opposition.

Anonymous said...

PAP is the one who open the floodgate to large number of foreigners. By doing so, PAP is the one who has cause all the problems that citizens of Singapore are facing. Now, PAP is the one who dare to ask the question whether immigration of foreigners to Singapore create jobs for citizens of Singapore.

By opening the floodgate to foreigners without knowing the serious bad consequence of the action on citizens of Singapore,

either PAP is darn incompetent

or PAP is good in acting blur

or PAP is just selfish to just want to grow GDP so that higher GDP lead to higher million dollars salary and higher bonus for the PAP

or PAP is negligent in failing to exercise their duty in the good interest of citizens of Singapore

or PAP is just plainly hypocrite in trying to earn some empathy from citizens of Singapore who are badly hit by the PAP's pro-foreigners policy and suffering as a result, thanks to PAP's flooding Singapore with wave and wave of foreigners.

Anonymous said...

Over the years until after the last GE, the pap top dogs began to believe in their own propaganda. That is why sometime, Singaporeans wondered whether these people are living in another planet.
Now they have wakened up but they have not landed on earth. They are still floating somewhere out there - LOST.

Anonymous said...

Can some righteous lawyers together to see the possiblity to take legal action against MOM which failed to perform his duty causing tons of singaporean lossing their jobs!!

Xianlong said...

"If jobs are taken away shouldn't we see higher unemployment?"

Hi lucky, u already know answer yourself. Person unemployed for few weeks gets drop from statistic. And of course their favorite of lumping PRs & citizens together.

Anonymous said...

The cancer has already spread, but there is no sign of LHL wanting to back down during his Labour day speech. Shock therapy is the best option to bring Singapore back on its stability, painful but necessary. As for influx of foreigners, such steriod must not continue otherwise Singapore will lost is sovereigncy to become truly independent of ourselves. A clever leader knows how to groom Singaporeans and built a force of local talent. A weak leader relied on short-cut growth and wipe out its citizens to do underpaid and underutilized job. Such vast difference of leadership we know which one best described Lee Hsien Loong style.

ah lian said...

You know Woody -- after opening the floodgates -- had the cheek to say the surge of immigrants had TAKEN THE GAHMEN BY SURPRISE. And even when our infrastructure's stretched beyond limits, the gahmen hadn't stopped the influx coz our booming economy needed them!

And this, according to Woody, was supposedly the "rational approach". And he urged us to see pressing issues like housing and transport in perspective...

I swear! I'm not making the ESM out to be more of an ass, or taking his words out of context. See ST article "Take rational approach to problems: SM Goh", 7 Sep 2010.

So, our multi-million dollar (Woody, haha) cabinet was TAKEN BY SURPRISE. Which means: there wasn't proper planning at all. That's why the non-planners didn't think to ensure that our infrastructure would be able to support the influx BEFORE opening the floodgates. Also, if there's any control in regulating the influx, will the non-regulators be taken by surprise in the first place?

What's worse, Woody seemed rather proud that the influx was so massive, more were needed to upkeep the economy. EVEN NOW, when many problems due to the FT policy have surfaced, the gahmen still think the way forward is to continue with the influx, and citizens should learn to live with "trade-offs".

Well, can't say I'm caught by surprise, since the gahmen have already shown themselves to be non-leaders of the people, with no ideas how to solve the problems they themselves have created.

Since Pinky had recently made known the gahmen's intention of bringing in more FTs still, wonder why the ESM and his coattail rider are relooking the FT policy. Probably nothing more than putting on an act. They're after all, the "action" party.

Anonymous said...

immigrants running food and shop biz in sg, they go hired FTs to be the cooks waitress, waiter and sale person, as we all know, all this jobs are shunned by singaporean,then we need more immigrants to become the shoppers and diner as LKY once said sg need young people to buy cars, ipad, iphone... so the more food and shop biz spring up, the more immigrants flooding in, this is like a vicious circle. and we can see we are not only bring in young people, we bring in middle age and elderly immigrants, making the aging issue even worse. singapore economic is all about consuming, more consuming.

Anonymous said...

The surge in immigrants resulted in the needs for more jobs so as to cater to these immigrants. E.g. Immigrants have kids so more teachers are required. Unfortunately because of the high influx there arent enough singaporeans to make up for the teachers required, leading to more immigrants required to fill up the jobs. This is a vicious cycle as it affect all industries across the board. The government should stop using the excuse that singaporeans are shunning certain jobs because there are just too many immigrants who created the new demands. Try putting 10 goldfishes into a fish bowl meant for two. How long can they survive?

Anonymous said...

Well. Like what LKY said, if you are not happy with the candidate vote him out. Marine parade voters, I hope you guys know what to do.

Anonymous said...

Do more voters get more angry and frustrated with PAP since GE 2011?

Apparently not, judging from Hougang BE 2012.

So another 60% for PAP in GE 2016? Most likely, if the Hougang trend is repeated and continued all over of Singapore.

So does it matter what Lucky Tan say?

Or what Tin Pei Ling said, not said or don't know what to say?

What do you think?

Anonymous said...

Two points:

1. The plunging productivity trend (there is no growth from 2007 hence the word "trend" instead og growth) since 2007 is truly amazing, and corresponded well with the opening of the flood gate.

2. I do not like the term "structural unemployment". I tell a short story to illustrate why "structural" is an economics equivalent of the medical term "idiopathic" (meaning the doctor is totally clueless). Between 2002 and 2004, all local banks were forced to restructure to lower operating costs to prepare for the foreign banks entry with the new licences for retail/commercial banking. Every of the 3 major local banks and POSB had a task force of mid-level bankers focused on improving productivity thru IT, BPO etc while still holding their full time jobs in their banks. When their job was done and the changes started to bear fruit in better productivity, a60% to 70% of these highly experienced mid level managers were retrenched, replaced by cheaper filipios and indians. Some found work with foreign banks, others moved overseas mostly to Australia or China. Now the MAS wants the banks to give priority to train local bankers.

The moral of the story is this: there is no such thing as structural about the reternchment of the mid level local bankers, because the opening of the floodgate created this "unemployment", today, the MAS is finally realizing their "welcome FT" policies have finally created the big fat hole of the dearth of local bankers at the mid and senior levels. Whose fault was it? Were these retrenchments "structural or man-made" by govt policies? Of course the foreign bankers are pushing back, they are protecting their own kind! Once they are entrenched, they never leave.

Anonymous said...

Retired Singaporeans that have little pension - I mean the cpf payments that come up to about $400 to $600 a month - will suffer without the foreigners. They rent their rooms or flats to the foreigners to get income that will support their daily needs in food, transport, medicine, housing, etc. You won't see the elderly voting against the PAP soon: they need the foreigners.

Anonymous said...

Most comments here reflect what is wrong with Singaporean online 'society' in general: Narrow-mindedness and a delusional belief in all sorts of conspiracy theories.

You can have a PAP MP says exactly what you want to hear and you still reject it. If that isn't a narrow mind I don't know what is.

Anonymous said...

If PAP don't even want to listen to old and well regarded Prof Lim Chong Yah, why would PAP want to listen to young,"chio and love Kate spade" PAP MP Tin Pei Ling?

So what do you say?

Anonymous said...

"You can have a PAP MP says exactly what you want to hear and you still reject it."
Anon 27/6/12 09:46

It depends on who is the PAP MP.

PAP MP also got many types what, tio bo?

do not lie to your own people said...

Any growth fueled primarily by debts or immigrants come with a huge price. Unfortunately, PAP is too detached with the ground to understand.

Ng Eng Hou said...

The foreign workers who come are more of the displacing nature rather than playing a supplementary role, which is to fill up the gaps we have. Singapore's dependence on foreign workers is across the board, from the low-pay to high-pay ones.

So far, the foreign workers only enrich some people, those property developers and people who have places to rent to them.

In the animal world, when you bring a different species of living things to another place which is not their original home, they will either drive the local species of creatures into extinction or creating ecological imbalance.

In the corporate world, it has been shown if the new head of a company is succeeded by an outsider rather than by someone who is being internally-promoted to the job, this new head's performance is not as good as someone who is an insider.

The lesson here is this current way of introducing foreign workers will not help in economic growth. This current situation is unsustainable.

Singapore is just too small to continue accommodating well-educated taxi-drivers, property agents and remisiers, if this goes on.

So far,immigrants create more low-paying jobs, more structural unemployment and disguised unemployment!

Anonymous said...

"So far,immigrants create more low-paying jobs, more structural unemployment and disguised unemployment!"
Ng Eng Hou 27/6/12 14:29

Even so, PAP did not lose more votes since last GE 2011.

patriot said...

The lesser we hear of Holy Ghost the better. He likes to talk so much just because he is in high position.

It is very important for those at the highest hierarchy to think carefully and thoroughly before they even open their mouths.

What is happening in Sin is that those at top suka suka say things that come to their minds. And they do so because, anytime they suka suka U-turn or detour as they like.

No wonder our students cannot stand having dialogue or forum with them. I would not be surprised that one fine day, participants, students included will just walk out on them.


Anonymous said...

Please kindly take note when PAP ministers and MPs like to use these to your rational questions...

They will reply to you "What Do You Think!".

So what is our reply back to that inane question...it can be either...

A) What also do you think also?

B) FARK YOU UNSTAND LEETARDED "Servant" of Singapore and its people.

Good day all.

Anonymous said...

""You can have a PAP MP says exactly what you want to hear and you still reject it. If that isn't a narrow mind I don't know what is.""

Becos people know what is wayang and what is not wayang.

Some people need to do first to show it because their trust bank is low due to too much roti prata in the past. For TPL, it is the action of her party that ppl are looking at.

Some people always say and then back it up by doing it eventually. Then you can safely take what they say - as their trust bank is high. You will know this wisdom when you grow older & are mellow, if you are one of those who learn & not to be fooled by sweet talkers.

Anonymous said...

Does anyone still remember that singaporeans are not afraid of competition yea yea orchestra at the start of this foreigners please flood us quickly policy?

Anonymous said...

There are hidden cost of hiring low wage foreign workers.

Government is funding public facilities like SMRT (is it $900 million?) and SBS. This funding in turn comes partially from taxpayers like you and me. So when we are paying a $1.00 fare for a bus ride, we could in fact be paying $1.50 where 50 cents is from the taxes we pay.

A foreign low wage worker does not pay much taxes so when he takes a public transport we are in fact subsidising his ride. In fact whenever he uses any public facility we taxpayers are partially paying for him.

Some examples of subsiding by taxpayers
1. Police Force
2. SAF
3. Civil Servant Salaries
4. Roads (We pay so much road taxes and COE but foreign low wage workers are getting a free ride..)

One can argue that employers that hire foreign workers must pay worker levies and this in turn funds the government expenditure. But in the end who is really paying for the levies? Consumers like you and me! If you patronise a store with foreign workers, that store will have to recover the cost from charging more. If I hire a maid, I will have to pay for the levy.

Anonymous said...

To Anon: 28/6/12 08:33

Of course voters like you and me pay lah, taxes, levy, COE, bus fares or what not.

But 60% of these voters are OK with all the paying by voting PAP.

SO what do you think?

Anonymous said...

Once, I and many people are consider Local Talent (LT).

Since the opening of the FT flood gate, many of those Foreign Trash(FT) have become Foreign Talent(FT).

Since then, many people, especially those in their 40's and above have become Local Trash(LT) while our young generations are in great competition with those FT.

What kind of government do we have? I don't know.

Anonymous said...

"Government is funding public facilities like SMRT (is it $900 million?) and SBS."

Point of clarification.

SMRT and SBS are not public facilities.
They are public companies that are run for profit for benefit of shareholders.
Not for the benefit of taxpayers.

SMRT and SBS are not your grandfather's companies.

Anonymous said...

"Politics should be about having the courage to make the
best decision at any given point in time, and act on it"

I think you might be making a different take on what she says. She is saying that we need cold turkey but she did not in any way explicitly affirm that her party made a bad decision.

I find it sort of rude that Tin Pei Ling would suggest that the unhappiness on the ground is the result of a handful of vocal citizens. I coined the term : opening of floodgates, on your blog. It was not to be vocal. Rather, to express the reality. As an MP, she should be aware that there are a lot of Singaporeans who stlll are reluctant to speak up. There is implicit pressure not to speak up in Singapore. So, I don't think it is fair of her suggest that the vocal lot are a minority and when she does that, she caricatures the reality on the ground.

There is a silent majority in Singapore today. And there're a silent 40% majority on this 647 sq km island.

Anonymous said...

'Bu jian kuan cai bu liu lei' meaning unable to feel the pain and sorrow till disaster struck.

Pappies are so sinfully remunerated to talk cock during their terms that few or any are able to empathize with the suffering lot.Within their few hours of meeting with those seeking helps, they are only exposed to limited number of people. There should be many that do not get the chance to see their MPs.

In any case, these(MPs) are the people that hardly walk around by themselves. They are in high society and always go to events that are specially arranged for them. How much do they see suffering? And even if they do, can they understand the plights?

The building of more and more rental flats does show that Singaporeans are having problems. And parliamentarians should know. BUT does that makes the Housing Minister speaks with more conscience?

Anonymous said...

"In any case, these(MPs) are the people that hardly walk around by themselves. They are in high society and always go to events that are specially arranged for them. How much do they see suffering? And even if they do, can they understand the plights?"
Anon 28/6/12 12:36

Actually no need to walk around lah. Every 5 years, if majority still vote PAP to give PAP 93% seats in Parliament, not good enough meh?

What do you think?

Anonymous said...

When the pap government pump in state or peoples' money into smrt and sbs, it is treating them as public institution. But any profits earned does not go back to the people in the form of cheaper fares. It suddenly become private again because the money goes into shareholders pocket. This is so unethical. Talk about raiding national reserves and nigerian scam?

Anonymous said...

All the above

Anonymous said...

Singaporeans are a strange lot.
They want change for the better,
but are unwilling to work for it.
Always expecting someone else,
always waiting for something else,
they hope and they wait,
for others to do a Hougang,
for others to do an Aljunied,
while comforting themselves,
in estate upgrades and candies.

Until that change,
there will be no change,
for Singaporeans are a strange lot,
who want more, but just cannot.

Anonymous said...

Unemployment rate is not going to be a good indication of whether Singaporeans are being displaced in the workforce since the total number of workers in the statistic includes foreign workers too.

Not sure how to find the statistics or how to find out how they're measured, but i do remember this being talked about some years ago. Plugging the link here with some quotes.

"High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/2373ee60-9300-11da-ab7b-0000779e2340.html#ixzz1z8lTcoRs

The government decided last year to revise the measurement of unemployment to include foreign workers who have temporary work permits, including construction workers living on site and those who commute to Singapore from Malaysia.

"The revision has the effect of reducing the overall unemployment rate as...(the) total labour force is now larger, taking into account full coverage of the foreign workforce," said the ministry of manpower, which compiles the statistics."

So as long as they keep importing foreign worker at a rate faster than they are leaving + Singaporeans being displaced, the unemployment rate will go down.

Not a very useful statistic huh?

Anonymous said...

Oh.. the link http://www.ft.com/cms/s/0/2373ee60-9300-11da-ab7b-0000779e2340.html#axzz1z8l5Zzoe

Anonymous said...

a country is like one big footbal field. starting from zero player, you keep on adding one player on both sides and the game may get more & more exciting until it reaches its critical point when another player added to the field will jam up the whole match and play.

Anonymous said...

They already have the answers and the numbers. They only tell anyone when they choose to say, by pre-packaging in a way that does not say anything in substance. We have seen this countless time. Some examples are in comments above. Some of these numbers are so damaging to reveal in full that they would never be disclosed.