ON the face of it, the move looks straightforward enough. Singapore's job market is as tight as a drum, with unemployment at a 10-year low and employers in key areas like construction, marine, manufacturing and services scrambling for workers. So easing the rules on the entry of foreign workers, as the government has just done, makes economic sense. But clearly, it cannot be the final answer.
That's because employment is just one aspect of the country's complex socio-economic situation. On the economic front, the tight labour market is the direct consequence of a rapidly expanding economy that looks set to deliver strong 8 per cent growth this year, but at a cost.
Analysts predict that inflation could hit 5 per cent next year, uncomfortably high by Singapore standards. On the social front, job-hopping is once again rampant, while the task of quickly accommodating tens of thousands of new workers from overseas is a challenge in itself.
Easing the rules on foreign worker entry offers a quick, but partial, solution. Quotas have been substantially enlarged, while the proportion of S-pass workers, who have better qualifications and a higher minimum wage than work permit holders, has been raised. This latter policy will help ease the shortage of skilled workers and supervisors. High-earning professionals will also find it easier to get the new Personalised Employment Pass, which offers better conditions.
The immediate impact of these revisions will be a much enlarged pool of human resources, bringing relief to industries that have been crying out for workers. The moves would also help dampen, to some extent, the inflationary cycle of rising wages and prices.
However, as some employers have pointed out, the new rules might not be as helpful in some key industries. This is notably so in the burgeoning services sector where skilled workers are at a premium because of global demand. Factor in the upcoming integrated resorts and the government's own ambitious tourism targets, and it is clear that growing this particular pool of skilled workers will be a challenge requiring special attention.
But perhaps most importantly from a national perspective, any planned adjustment in employment policy has to consider the impact on the local workforce and populace. To what extent is the recruiting of foreign nationals freezing out local applicants? Is the mass hiring at the lower end of the employment spectrum affecting the wages of local workers and thus exacerbating income inequality?
Senior Minister Goh Chok Tong recently highlighted the challenges of helping new arrivals settle into Singapore society; should such efforts be stepped up with the anticipated influx of new workers? Such are the unavoidable issues of a geographically small country with a large proportion of non-local workers. But face them we must, with ingenuity but also sensitivity.
