Friday, 8 May 2020

Low-wage workers: Are Singaporeans prepared to pay more for domestic services so pay and work conditions for the low-income can improve?

Coronavirus: All hands on deck needed to improve low-wage workers' lot
By Joanna Seow, Assistant Business Editor, The Straits Times, 7 May 2020

The COVID-19 outbreak has shone the spotlight on the plight of low-wage workers in Singapore.

They clean our estates, offices and hawker centres, they build our homes and offices, and they check for vital signs and care for our sick and elderly, among other jobs.

Many are in roles critical to our lives, but they labour often unseen and unappreciated in regular times. It has taken a public health crisis to highlight again how the treatment of these workers - many of whom are older Singaporeans or lower-paid migrants - leaves much to be desired.

In the debate last month on the supplementary budget measures to help Singapore through the crisis, several MPs highlighted the struggles of workers in sectors such as healthcare and cleaning whose wages do not seem commensurate with the vital importance of their roles, especially during a virus outbreak.

Workers' Party (WP) chief Pritam Singh called for a thorough review of what a living wage in Singapore ought to be for Singaporeans "who man our critical infrastructure and keep the country's heart beating", just as food security and critical supply chains are being strengthened.

Yesterday, the Government, National Trades Union Congress (NTUC) and employer organisations issued a tripartite advisory with recommendations on measures that service buyers and providers should adopt to ensure the sustainability of the security sector in view of COVID-19.

These include paying security officers and firms fairly, and looking after officers' workplace safety and health, such as by providing personal protective equipment.

This is the second such advisory - the first, for the cleaning sector, was issued last month - and others will be announced progressively, said the Ministry of Manpower.

This is a welcome move in signalling to service buyers that the welfare of workers must be taken into account when they evaluate contracts.

With many aspects of work being relooked due to the crisis, now is a good time to examine what needs to change about how we support low-wage workers.



WAGES

Wages remain an issue for this group, especially during this crisis. With the circuit breaker measures shutting most workplaces to stem the spread of COVID-19, low-wage workers are in an even tougher position if they are put on no-pay leave or laid off.

To help low-income Singaporean employees during the economic uncertainty, those on Workfare will receive a Workfare Special Payment this year of $3,000 in cash.

This was among measures announced in this year's Budget and enhanced in the supplementary budgets, which also include the one-off $600 Solidarity Payment for all adult Singaporeans.

Other efforts have focused on ensuring workers still get paid during the crisis, such as the Jobs Support Scheme, a wage subsidy that pays up to 75 per cent of the first $4,600 of gross monthly wages for local workers for nine months.

Economist and Nominated MP Walter Theseira also suggested in Parliament last month that all Singaporeans receive $110 a week for 12 weeks, funded through a temporary personal income tax hike of 4.25 per cent, paid next year when the economy is expected to have recovered. Under his proposal, dubbed the Majulah Universal Basic Income Scheme, the less well-off will benefit more from the scheme, while the high-income will help to finance it.

Beyond this crisis, however, the issue of low wages persists in certain sectors.

Observers say this is a chicken and egg problem.

Employers cannot find enough locals to clean estates, guard buildings or work on construction sites, for example, so they turn to foreigners willing to do the work at low salaries as the pay is still higher than what they could earn back home; locals shun these jobs because they feel the pay is too low and the progression too slow.

Even if some companies which employ outsourced workers like cleaners or security guards want to pay workers more, they risk losing tenders to competitors with lower prices. One cleaning company boss said he lost a project he had been working on for over a decade when a new company offered to do the work for much less.

If service buyers such as mall owners, condominium management committees or property developers look only for the lowest-cost contractors, there is little incentive for employers to pay staff more.

A slew of wage support schemes for workers have been introduced over the years. The Workfare Income Supplement tops up the incomes of those aged 35 and up and earning up to $2,300 a month. The Progressive Wage Model, which effectively sets minimum pay for locals in certain heavily outsourced sectors, has helped in recent years to push up incomes at the lower end.

Greater changes can come only when Singaporeans are prepared to change their habits and pay more for domestic prices which are now underpriced by the prevalence of cheap migrant labour.

Explaining this, Associate Professor Theseira said that in essence, Singapore is operating like a "trickle-up economy". "In other words, so that people can enjoy their cheap hawker food, massages, home cleaning and domestic services, there is this notion that we need to structure the economy around ensuring there is an inexhaustible supply of low-cost labour to provide all these services. I think laying it out in these terms makes it apparent how perverse that reasoning is," he said.



WAY FORWARD

A sure way to improve the welfare of low-wage workers is to pay them more or pay more for their upkeep. But the question then becomes, who pays?

Apart from the service buyer and ultimately the consumer, employers have a key role to play.

For example, CHH Construction System managing director Nelson Tee, who employs about 40 migrant workers, said he pays a higher dorm fee to house them in supervisor rooms which have a lower density of beds.

NTUC assistant secretary-general Zainal Sapari said a mindset change is needed where workers must be willing to undergo training to raise their skills and productivity; service buyers move away from "cheap sourcing" and towards outcome-based contracting; and service providers which employ the workers do not bid for contracts at unsustainably low prices.

Migrant Workers' Centre (MWC) chairman Yeo Guat Kwang also suggested that employers, caterers and logistics professionals view the provision of food for migrant workers less as a cost to having them here and more as a longer-term investment in their health and well-being.

Indeed, the living conditions of lower-paid foreign workers were highlighted recently when dormitories became huge clusters where the coronavirus has spread. The outbreak highlighted the cramped and poorly maintained living spaces of some of these workers, and their low-quality catered meals.

Manpower Minister Josephine Teo assured Parliament on Monday that the Government will see how housing standards for migrant workers can be further raised.

The general public, too, may need to accept higher prices, for the sake of a more equitable society.

WP's Mr Singh alluded to this when he said in Parliament, "it is time our workers who keep Singapore clean are paid far more respectable wages, with Singaporeans ready to play their part too".

Second, more can be done to empower low-wage workers, such as making available job and training opportunities and salary information.

NTUC has a U Care Centre to support low-wage workers and some of its unions represent cleaners, security guards and other workers with lower pay, who can be local or foreign. Its MWC is among non-government organisations which provide assistance specifically to migrant workers.

Transient Workers Count Too executive committee member Debbie Fordyce suggested making it easier for migrant workers to change employers without having to return to their home countries or fork out money to middlemen or the prospective employer.

Currently, they need their employer's approval to be transferred, or must wait until their work permit is near expiry.

Finally, the jobs that low-wage workers perform must be improved. They can be redesigned to use more technology, such as cleaning robots and centralised security systems already in use at some firms. Such systems make work less strenuous for workers and improve productivity, which can raise wages.

Technology adoption has been slow to catch on due to cost. But the current outbreak may be the push that is needed.



Alexandra Hospital is piloting the use of robots to deliver medicine and meals to patients diagnosed with COVID-19 or those suspected to be infected with the virus in its isolation wards.

More than 200 ultraviolet disinfecting mobile robots made by local robotics technology firm PBA Group will also be rolled out in shopping malls and the healthcare and transport sectors by the end of the year.



Tackling the issue of low-wage workers' work conditions is pertinent as low birth rates and an ageing society mean Singapore's citizen population will likely decline, and the labour shortage in these sectors will get worse if nothing is done.

The number of Singaporeans aged 20 to 64 is expected to peak at 2.2 million around this year and then decline, even with immigrants.

EVERY WORKER MATTERS

While it is tempting to reduce workers to simply digits counting towards a foreign worker quota, or numbers reported in labour market statistics every quarter, the current crisis is a good reminder that every worker is a human being.

They build, heal, clean, guard and toil in many other ways that keep the country running.

Singaporeans, firms and charities have rallied together to donate essential items like masks to migrant workers after hearing about their plight. More than $1.2 million has also been raised through ground-up campaigns such as #HOMEFORALL Migrants and an initiative started by local social media personality Preeti Nair.

After the crisis, the challenge to improve the lot of these workers - local or foreign - also requires all Singaporeans to support a change that sees them as valuable additions to the workforce, who deserve fair wages and good living conditions.





















How can Singapore reduce its reliance on foreign labour?
Ask: NUS Economists
By Hui Kai Lung and Ivan Png, Published The Straits Times, 8 May 2020


Q HOW CAN WE REDUCE OUR DEPENDENCE ON FOREIGN WORKERS?

A The COVID-19 epidemic in the foreign worker dormitories is a sharp reminder of the cost of Singapore's heavy reliance on foreign workers. The maximum ratio of foreign to local workers ranges from as high as 7:1 in the construction and process industries, to 3.5:1 in the marine industries and to 0.6:1 in services.

For this to change, we should first reconsider the desired outcomes of our economic, social and other policies. With the economy, the target might be growth, as measured by growth of gross domestic product (GDP).

GDP is the difference in monetary terms between the value of output and the value of inputs. That difference is made up of profit, wages and rent. The Government takes part of these through tax.

Many businesses - both in manufacturing and services - are owned by foreigners, and so, the profit accrues to foreigners. As for wages, a part is earned by foreign workers.

A substantial part of construction - itself intensive in foreign workers - serves to reclaim land and build infrastructure for foreign-owned manufacturing plants. What is the net benefit of all this to Singapore?

As for non-commercial activities, parks and roadside landscaping enhance our quality of life. But we may have taken this to an extreme. The marginal benefit of grassing every roadside kerb and slope to a manicured state must be very low.

Security is another example. As the Government has emphasised, we should shift our thinking from the number of guards on duty to the actual outcomes: safety and security.

We can achieve safety and security with fewer boots on the ground.

Second, we should refocus on the economic principle of comparative advantage. It should be obvious that Singapore does not have a comparative advantage in labour-intensive production.

Yet, by admitting over 920,000 foreign workers (the number of foreigners on S Pass and work permits, excluding domestic helpers), we have slipped into labour-intensive production.

To avoid distorting economic fundamentals, all activities should be evaluated with full costing of foreign workers. That is the wage that Singaporeans would require for the same work.

Coupled with a focus on the net benefit to Singapore - rather than the GDP contribution - full costing might mean that we should exit some industries and shrink areas, such as marginal landscaping and security guards.

And consider the construction industry. Hong Kong and Singapore are similar in size, population and economic structure. However, less than 1 per cent of Hong Kong construction workers are foreigners. Yet, their contractors have built a city no less attractive or functional than ours.

With full costing of foreign workers, the construction industry will be smaller. One reason is a reduction in demand for construction, as we exit and shrink some industries and recalibrate desired outcomes in others.

What about construction for residential and commercial purposes?

With full costing of foreign workers, the cost of construction would increase sharply. Design and consultancy firm Arcadis estimates the cost of construction in Hong Kong to be two to three times higher than that in Singapore.

However, contrary to intuition, the prices of residential and commercial property would not increase to the same extent.

The reason is that the supply of residential and commercial property is a function of the cost of construction as well as the cost of land. When the cost of construction goes up, the price of land will fall.

Moreover, full costing of foreign workers would provide a strong incentive for builders to hire and train local workers, and for Singaporeans to join the industry. In Hong Kong, a bricklayer earns $238 a day, or over $4,600 if he works 20 days a month.

That is more than double the recommended wage at the top of the Progressive Wage Model in Singapore for cleaners and 50 per cent higher than the current wage of foremen in the building and related trades.

The COVID-19 outbreak has made clear that we need a fundamental review of the desired outcomes of economic and other activities as well as full costing of foreign labour. These will bring the numbers of foreign workers into proper balance, and even better, possibly create new jobs for Singaporeans.

Hui Kai Lung is Elman Family professor of business at the Hong Kong University of Science and Technology. Ivan Png is distinguished professor at the National University of Singapore (NUS) and principal investigator of Spire, a Ministry of Education-funded project on service productivity.















Reducing use of foreign workers - everyone can play a part

Almost 20,000 of the 700,000 foreign workers on work permit in Singapore are in the cleaning industry.

The Public Hygiene Council (PHC) has long argued that our heavy dependence on these, mostly low-skilled foreign workers to keep Singapore clean is not sustainable.

With the plight of foreign workers in Singapore dominating the news, it is timely for the PHC to reiterate its message that all Singapore residents must be more responsible for the cleanliness of our country. We must make good hygiene practices our daily responsibility.

Binning our trash, returning trays at hawker centres and flushing public toilets after use are practices that could help us reduce the number of foreign workers we need.

The way public eating places are run also needs to be revamped - including the infrastructural plan and layout of the premises, the design and installation of tray return stations, how the cleaners are groomed and trained, how the owners manage their premises, and how standards and guidelines are supervised and enforced.



These will result in cleaner premises, a more pleasant environment and quicker turnover of customers for stall operators.

These bold initiatives may be painful in the short run but are necessary to establish new norms that yield lasting benefits, such as a lower dependence on low-wage foreign workers.

We are far behind Japan, South Korea and Taiwan when it comes to cleanliness in public places. In those territories, cleaners are higher skilled and better paid. They wear smart uniforms and command the respect of society. They face no stigma. We would do well to learn from them.

The Government has repeatedly stressed that this is a time for us to reflect on what the COVID-19 crisis has taught us.

The PHC hopes that everyone will start taking public cleanliness much more seriously, because this affects us collectively and individually.

Edward D'Silva
Chairman
Public Hygiene Council
ST Forum, 9 May 2020


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