"'Despite total population projected to reach 6.9 million by 2030, Singapore businesses will be impacted by slower workforce growth from 2013 to 2020 at only half of the average growth rate compared with the past three decades.
From 2020 to 2030, workforce growth is projected to decrease even further. This will constrain businesses and limit growth. It will have devastating consequences for many companies."
- Singapore Business Federation (SBF) Statement.
The SBF is now saying even 6.9M people is not enough. Businesses need more to guarantee they thrive. But every where else in the developed world businesses have learned to live with slower rates of population growth - they grow by innovation and using existing resources more efficiently by improving productivity. However, years of liberal labor policies that open the floodgates to cheap foreign labor, has caused our businesses to become highly dependent on the 3rd world for labor. Even the white paper which is considered extreme by so many is not enough to satisfy the business community here.
While I'm not one bit surprise, the SBF has again lobbied for its own interests, it tells us the interests of Singapore businesses have become divergent from that of ordinary Singaporeans. They want wages to be as low as possible to increase profits, and Singaporean workers will only benefit if we have a model of growth that elevates real wages. The PAP govt has already given too much to businesses through years of pro-business policies allowing them to have the lowest taxes in the developed world, lowest protection and benefits for workers among developed countries, easy access to cheap foreign labor, no independent unions etc. We ended up with a large income gap and a 3rd world wages structure that is now causing the ordinary people to turn their backs on the PAP govt. After pandering to their every demand in the past, the PAP govt now finds that even small tweaks in policies is faced with stiff resistance.
No economy can grow forever, no unsustainable model can keep going without breaking. The longer we kick the can down the road, the more divergent the interests will be and the harder it is to transform and restructure the economy. There are things have to be done now to benefit ordinary Singaporeans otherwise the PAP will face rising rejection of its system.
Statement by SBF on Population White Paper
01 February 2013, The Business Times -[Link]
THE Singapore Business Federation acknowledges the importance of the Population White Paper's projections for the medium to long-term growth of Singapore. A shrinking and ageing workforce amid the backdrop of a stagnant Total Fertility Rate (TRF) will have serious implications for businesses and the economy. It is vital that Singapore achieves consensus and lends support to these important issues.
Despite total population projected to reach 6.9 million by 2030, Singapore businesses will be impacted by slower workforce growth from 2013 to 2020 at only half of the average growth rate compared with the past three decades.
From 2020 to 2030, workforce growth is projected to decrease even further. This will constrain businesses and limit growth. It will have devastating consequences for many companies.
As the number of Singaporeans in Professional, Managerial, Executive and Technical (PMET) jobs increase, there will be a shortage of local non-PMETs.
Many industries cannot be manned by mainly PMETs. For example, retail, food-and-beverage outlets and hotels will continue to need a large number of lower-skilled workers.
Currently, these sectors already cannot attract enough locals. In the future, the situation will be worse. Those establishments which cannot adjust will close. Jobs will be lost. Those who can survive will face tight labour supply and high labour costs. Singaporeans should be prepared for higher costs of such domestic services and lower service quality levels.
Moderate GDP growth of 3 to 4 per cent from 2013 to 2020 hinges on productivity growth of 2 to 3 per cent. There is risk that this growth will not be achievable if productivity cannot be improved from current levels.
Consequently, there is a danger of Singapore descending into a period of weak anaemic growth. This will have repercussions on wages, employment and Singapore's attractiveness as an international business destination.
Singapore's appeal as an efficient and attractive tourist destination will also be compromised. In such a scenario, we can lose our confidence as a dynamic city.
Mr Ho Meng Kit, CEO of SBF, said: "The reduction in workforce growth has very serious consequences for businesses. Some Singaporeans do not realise its impact but are seized with the prospect of an overcrowded island with 6.9 million people. We must explain to Singaporeans that many businesses will be in jeopardy if they cannot adjust to this demographic tsunami that will hit us.
"If businesses go under, jobs will be lost, Singaporeans will be affected. If businesses cannot raise productivity and sustain profits, they cannot afford to pay Singaporeans higher salaries.
"The population projections in the Population White Paper are already tough for companies. It is unthinkable if Singaporeans choose to further limit immigration and the number of foreign workers. This will damage our competitiveness and Singapore will lose its shine. We do not want to see our children working overseas because there are no more good opportunities here."
Providing an SME perspective, Mr Lawrence Leow, chairman of the SBF-led SME Committee, said: "The population paper has painted the harsh realities of Singapore's population statistics and their implications. Unfortunately, it is the SMEs that will be hardest hit.
"SMEs currently employ some 70 per cent of the local workforce. They are more than economic contributors as their sustained presence has (an) impact on the lives of Singaporeans. Many SMEs operate as subcontractors or across labour-dependent service sectors. The shift towards two-thirds of local workforce to PMET jobs and only one-third to non-PMET jobs is unimaginable for many SMEs' business model.
"A lot of SMEs whose operations cannot be moved offshore will be rendered out of business.
"This, in turn, has an even wider implication as many multinational corporations (MNCs) here rely on SMEs for services and as part of their supply chain. The net effect is that many more jobs could be lost. We urge the government to delay further tightening of foreign workers restrictions until there is clear evidence of small businesses succeeding in business restructuring and productivity increment