Cheap foreign labor in Singapore is just not cheap enough for General Motors

News flash: General Motors has relocated their headquarters from Singapore to China.

Apparently Singapore’s cheap foreign labor is just not cheap enough for General Motors. Singapore under PAP leadership have been exploiting cheap foreign labor to spur growth, but apparently this strategy doesn’t work any more. General Motors is not the first MNC who have left, Boeing chose Malaysia from Singapore as the preferred location for the manufacturing of their 787 Dreamliner [Source] in Feb 2012. More interestingly, Boeing actually labelled Singapore as a “second-tier” country in terms of technological capability and experience. This pretty much sums up how Singapore’s position in the eyes of Multi-National Companies.

Singapore is losing its edge

Singapore is lagging behind countries with first world infrastructures like Korea, US, Germany, Japan and Taiwan. In terms of IT infrastructure, the PAP has only just began to invest in building the fibre optic network, where Taiwan and Korea have already got them up and running a long long time ago. And when it comes to quality, Singapore have been recently plagued with so much boos-boos like having the trains breakdown [Source], expressway collapse [Source], ceiling collapse [Source], flooding [Source] and who knows what’s next. The drop in productivity is prevalent an indication that the Singapore quality is no different than that of Malaysia’s. All these coincides with the influx of cheap foreign labor, to much of the PAP’s denial of course.

A decade or so ago, Singapore prides itself as an Asian gateway for the Western countries. English-speaking Singaporeans were considered one of the world’s best workforce back in the 1990s. With the influx of cheap foreign labor, we have engineers and service crew who couldn’t converse in basic English. The drop in English standard has been reflected in a survey recently where Malaysians are perceived to have better English than Singaporeans [Source]. Anecdotally, we hear Tagalog, Chinese and Hindi everywhere in our workplace. The rot in Singapore English standard is just festering with the loose immigration policies of the PAP government. Other Asian countries like China, Malaysia and Indonesia have recognized the importance of English and have already started building up English as their second official language for business. Give Asia another 10 years down the road, even Thailand and Vietnam can possibly attain similar English standard as Singapore do. What language gateway is Singapore going to boast about then?

Solution? Cheaper labor

The addiction to cheap labor is very strong in Singapore businesses. PAP’s solution to Singapore’s growth has always been about cheap labor. This is a rat race to the bottom among Asian countries. Having the PAP in power means there is going to be a further depression of labor and more violations of employment laws. What the PAP have now is to ban private unions, ban protests and cut off channels of redress for employees. This has only resulted in unmotivated workers who are just passing time to do what is within their specifications. Going the extra mile and achieving better standards is out of the question especially when Singapore workers are usually overloaded with long working hours.

The fake soluton?

There is a fake solution we see from the PAP. Through the fake union NTUC, they called it “Progressive Wages”, and they do it by linking productivity to pay raise. So how does it work? Let’s take the bus drivers for example, their salary went up by 35% [Source] but they ended up having a 6-day work week instead of the usual 5. Henceforth, they are simply increasing the pressure in the cooker for workers. There is no intention to increase salaries after all.

Then the PAP also have a “Fair Consideration Framework”. So it basically nationalized job portals and set an almost non-existing 14 days waiting period for the employers to hire foreign labor. What has this in for Singaporean workers? The PAP has merely made it a slightly fairer for Singaporeans and foreigners to compete for employment, there is nothing done to make Singaporean job seekers attractive to be hired. A company just simply has to sit out 14 days, hey its no big deal. What about salaries? The crux of the issue has always been about low domestic purchasing power in this high cost of living. The PAP initially said having cheap foreign labor will lower the cost of living, but it turned out to be a lie as inflation just keeps going up every year and getting worse with more cheap foreign labor.

The Real solution?

Singapore has to steer its course and work towards being the Germany of Asia. Like Asia, Europe used to be fixated with cheap labor until the region decides to go for quality products to establish its brands. However, in order to produce quality products and services, we need a workforce who is well-paid. A degree holder working as a skilled machinist in Germany and Switzerland is nothing new and he is paid even more than his project manager.

For a start we need to implement a Minimum Wage and eradicate the cheap labor culture. We need independent and powerful trade unions who have the power to conduct protests, reject salaries offer and prosecute employers under the labor law. We need to make the rich pay more taxes because it is the people and environment that made them profits. Singapore must be people-centric, and this is where PAP fare very poorly at. The PAP have a very bad habit of equating human beings to machines and applying very simplistic solutions be it in labor or immigration policies.

But hey, asking the PAP to change is impossible, we should be changing the government in 2016.

Alex Tan Zhixiang

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