Why Did The Fair Consideration Framework Only Cover Degree Holders?

The Ministry of Manpower (MOM) had announced the Fair Consideration Framework to ask employers to consider Singaporeans fairly before hiring Employment Pass (EP) holders”.

I found it peculiar as to why the MOM had decided to develop this framework only for Singaporeans competing for jobs with EP holders, so I decided to take a look at how many Singaporeans would be covered by this framework.

According to The Heart Truths, “in 2012, “university graduates who landed full-time jobs … earned a median gross monthly salary of $3,050,” which means that it can be considered that the E Pass wage level is pegged to the starting pay of a degree holder.”

70% of Singaporeans Will Not Be Covered By Framework

I then took a look at the MOM’s Singapore Workforce 2012 report and found that there were 29.4% of the Singapore resident labour force who were degree holders in 2012 (Chart 1).

photo 1 (18)

Chart 1: MOM’s Singapore Workforce 2012

This means that there are about 70% of the resident labour force who are not degree holders. Does this mean that about 70% of the resident labour force wouldn’t be covered by the new framework?

But I wanted to find out further – if the framework is developed for degree holders, does that mean that degree holders are the most at risk of unemployment, and which is why the framework is customised for them?

Singaporeans With Highest Unemployment Are Not Covered By Framework

I found Chart 2 below.

photo 2 (20)

Chart 2: MOM’s Singapore Workforce 2012

In Chart (A), you can see that the highest unemployment rate can be found among the youngest age group of those between 15 to 29. Their unemployment rate stands at between 4.6% to 8.9%, as compared to between 2.7% to 3.3% for the other age groups. Does this mean that our younger Singaporeans are being marginalised by the current labour policies? This would bring to mind that Acting Manpower Minister Tan Chuan-Jin had also admitted that ”entry-level salaries for Singaporeans have been stagnant over the past give year“.

I wanted to find out more about the educational level of this age group but there wasn’t a further breakdown.

But then look at Chart (B), this is when I was shocked. The lowest unemployment rate is actually found among the degree holders.

The unemployment rate for the other educational levels is actually higher! In fact, for those with a secondary education or lower, they have the highest unemployment rate in Singapore.

If those with lower educational qualifications are the most vulnerable in our workforce, shouldn’t this new framework be catered for them instead? Isn’t it misplaced that this framework is meant to protect (only) the degree holders?

Foreign Worker Levies Are Not Protecting Singaporean Workers

I then looked at the MOM’s press release on the framework and found this: “We have not made this (framework) compulsory for firms submitting applications for S passes or Work Permits, because there are other tools, such as levies and dependency ratio ceilings that spur firms to search for suitable Singaporeans before applying for an S pass or Work Permit.”

What the MOM is saying is that this new framework would not cover Singaporeans competing with S passes and Work Permits because there are already foreign worker levies and dependency ratio ceilings which protect the Singaporean workers. So, what the MOM is saying is that Singapore residents with primary, secondary, post-secondary and diploma educational level qualifications would not have as much trouble getting employment because of these additional “tools”.

But clearly, from Chart (B) above, these “tools” are not working because the unemployment rate is the highest among Singapore residents competing with the S passes and Work Permit holders.

Why Did The Government Want To Appease Degree Holders?

Which is thus very peculiar:

  • Why did the MOM create this framework to cover for degree holders when they have the lowest unemployment rate?
  • Why did the MOM not extend this framework to protect Singapore residents of other educational levels when they have higher employment rates?
  • Why did the MOM claim that the foreign worker levies and dependency Work Permits are enough to protect Singapore residents of other educational levels when it is clear that their unemployment rate continues to be higher?

It does make you wonder why the government’s foremost concern is over degree holders when degree holders already have the lowest unemployment rate. Also, why is there no further assistance to protect Singapore residents of other educational levels, when they are the ones who need the assistance more?

The question you need to ask is – why does the PAP government want to appease the voter segment who are degree holders?

Singaporeans With Highest Unemployment Are Not Protected

Next, I looked at another set of statistics which said the same thing.

In Chart 3 below, once again, you can see that the highest unemployment rate among the Singapore resident population can be found among the “clerical, sales & service workers” and the “production & transport operators, cleaners & labourers”. The unemployment rate for these two occupation categories is 5.3% and 4.1% respectively, as compared to 2.3% for the “professionals, managers, executives & technicians”.

photo 3 (14)

Chart 3: MOM’s Singapore Workforce 2012

Again, you can see that the Singapore residents competing with the EP holders are already better off, while the Singapore residents competing with S pass and Work Permit holders are the ones who need greater protection.

So again, this begs the question – why did the MOM not create this new framework to cover the workers who need the coverage the most?

Singaporeans Most Discouraged To Seek Work Are Less Educated

Finally, I also came across Chart 4, which explained why Singapore residents were being discouraged from seeking work. I wanted to understand what would explain the unemployment.

photo 4 (10)

Chart 4: MOM’s Singapore Workforce 2012

What stood out for me was what the MOM had reported that, “Less educated residents with below secondary (1.0%) and secondary (0.6%) qualifications had higher incidence of being discouraged than those with post-secondary or higher qualifications (0.2 to 0.3%). As a result, the majority or seven in ten (70%) discouraged residents in 2012 had at most secondary qualifications.”

So, this means that 70% of the group of people who were discouraged to look for work were those who had secondary educational or below qualifications. According to Chart 1, they would make up at least 40% of the Singapore resident population.

And if you look at Chart 4 again, you can see that over the past 4 years (2009 to 2012), this group of people had higher levels of being discouraged. What had this coincided with?

So, based on the above evidence and statistics, is it not clear that the lower educated Singaporeans are the ones being disadvantaged by the increasing labour competition in Singapore? They exhibit the highest unemployment rate and are as well the most discouraged from seeking work.

If that is so, shouldn’t any new initiative to protect Singaporean workers be customised for them, or for that matter, cover all Singaporeans, and extended to them as well?

The Poor Are Being Systematically Disadvantaged In Singapore By The Government

In a survey conducted in America, it was found that, “the poor who choose not to work aren’t necessarily doing so out of laziness, but because they have other obligations: they’re trying to take care of relatives, they’re ill, or they’re attempting to make their way through school.” This means that there are structural issues at home or in our society which prevents the poor from seeking work. In this is the case, shouldn’t we provide more assistance to allow them to meet these “obligations” adequately and be able to seek work?

Indeed, in a survey on poverty attitudes released by the National University of Singapore’s (NUS) Social Work Department on Wednesday, it was shown that “the working poor in Singapore are not getting enough pay to make ends meet”. In fact, “there are more than 300,000 Singaporeans and permanent residents who earn less than S$1,500 a month (excluding employer CPF contributions) despite working full-time.”

It was also found that, “85 per cent said these jobs are not paying enough for them to support a family” and that “such jobs are lowly paid to begin with”.

What’s more, “about 60 per cent of respondents said the Government is not spending enough to help the poor”.

Certainly, the chronic state of poverty that the poor are stuck is in a great part due to a lack of attention by the PAP government. There aren’t enough financial assistance from the PAP to support the poor. At the same time, new introductions such as this Fair Consideration Framework leaves them in the lurch as well.

There Needs To Be A Minimum Wage Law In Singapore

But more importantly, the chronic low wage problem has to be dealt with, with a minimum wage law. Indeed, according to the Today newspaper, “Experts at a dialogue session also made a call for a minimum wage, saying that it was one way to force firms to pay workers decent wages.”

Also, in a previous article on The Heart Truths, it was also found that more than 90% of Singaporeans are in favour of having a minimum wage in Singapore as well.

Yet, the PAP had been resistant towards implementing a minimum wage law. Already, there are 90% of the countries in the world which have minimum wage laws.

As such, there is a clear need to address the problem of low-wage issues and poverty in Singapore with clear and immediate steps. Also, any new introductions should also ensure that the poor in Singapore, as well as the sandwiched group would also be adequately covered.

The question, however, is whether this Fair Consideration Framework is also worth its weight in gold. And the truth is, it is not. You can find out why here, which means that essentially, even as the poor and sandwiched group have been neglected by this new framework, it’s not like the PAP government had truly wanted to protect the degree holders anyway. It was lip service right from the beginning.

By Deborah and Roy Ngerng of The Heart Truths

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23 comments

  1. Kelvin Tan Tuan Wei

    Your conclusion seems to contradict your introduction. You are saying that the requirement to pay E pass holders a minimum of $3300 only protects Singaporean degree holders at the intro and you conclude that a minimum wage for “every” worker in Singapore protects Singapore workers.

    So does a minimum wage actually protect anyone?

      • Kelvin Tan Tuan Wei

        I can phrase it slowly no problem. Let’s start with the requirement to pay E pass holders a minimum of $3300. Do you think such a policy benefit E pass applicants or Singapore degree holders and why?

      • Kelvin Tan Tuan Wei

        Haha nice reply. Okay I think it benefits the latter because it prevents e pass applicants from undercutting Singaporeans. It makes firms more willing to consider Singaporeans instead. Now how about u?

      • marcus

        What if the employer decides to hire this person on S-pass instead? Does it still protect the Singaporean degree holders?

      • Kelvin Tan Tuan Wei

        Of course the employer can still go ahead to hire the foreign applicant for many other reasons. My question is, “Do you think MOM implemented this “minimum wage” to help foreign degree applicants?”

        If you think foreign applicants actually benefit from this, then I guess we have to end the argument here.

      • marcus

        Ok. It doesn’t benefit foreign applicant. Neither did me nor Roy write anything like that. But the fallacy of your argument is if it is not A then it must be B when the reason could be C or D. Have you consider that MOM introduce this just for show?

      • marcus

        Do you have a degree? Do you understand the fallacy of your initial post? Or are you trying to confuse people here? Read again your first post and clarify what you mean.

      • Kelvin Tan Tuan Wei

        So we are back to my original point: If you believe that a $3300 minimum wage for all foreign e-pass applicants does not benefit the foreign applicants, why do you think a minimum wage for all Singaporeans will then benefit Singaporeans?

        Can you now understand why some readers may think that there is a contradiction, that both cannot be true at the same time?

      • marcus

        Your question is very funny. Let me phrase it for you. You ask if not A, then why B? A and B are not mutually exclusive. Maybe you should ask Roy to draw you a simple venn diagram to help you with your broken logic.

  2. Pingback: Daily SG: 27 Sep 2013 | The Singapore Daily
  3. AA

    I find it despicable that you are trying to pit degree holders vs non-degree holders based on your title and the contents of your essay. I believe your aim is to seek an audience with the majority whom are non-degree holders and to seek social unrest rather than analysis the problem from a fair point of view. It’s true that 3.Xk is the mean starting pay of degree holders but certainly diploma holders/professional qualifications/ITE etc. may earn this amount or higher with a few years of experience. Thus, I cannot agree with you that the new policy only protects degree holder. A fairer analysis will be to find the rate of unemployment based on various income bracket instead of making the assumption that this policy only protects degree holder which is the basis of your analysis of chart 1 and 2.

    • Roy Ngerng

      Hi,

      I am a degree holder as well. The aim of the article is not to draw distinctions between degree holders with non-degree holders. Please be very clear on this – at no point in the article did I mention that I say anything which would be discriminatory towards degree holders, and I make this very clear once again – at no point did I and would I ever say anything that would be discriminatory towards any particular group.

      Let me state clearly where the context of this article is – I was looking at the framework from a planning perspective that the government would take. Where did the government come out with the E Pass and S Pass wage limits? It is clear that they are pegged to the median wages of degree holders and diploma holders.

      However, as I had mentioned before, there are clear flaws in this policy:
      – First, the wage limit of the E Pass and S Pass did not move for more than 8 years from 2004 to 2011 – this has resulted in the starting pay of degree and diploma holders stagnating because they had to ask for wages which were depressed to a fixed wage level, which did not increase with the cost of living.
      – Second, this caused the wages of the other workers to remain stagnant as well.

      I make myself very clear once again – that I am looking at this from how I am thinking the government is looking at this issue – and I do not agree that the government should create a policy that is discriminatory, that discriminates one group over another.

      And as I have also illustrated in this and other articles, we have to also look at which income level this new “framework” would not cover, and it would not cover 60% of Singaporeans. Thus this “framework” is flawed.

      So, please be very clear that at no point would I or will I create an article with discriminatory intentions. I have been through enough discrimination to understand how not to perpetuate on anyone else. And I am a firm believer of equality in Singapore. I am a firm believer of minimum wage as well as higher wages across the spectrum, regardless of a person’s educational level.

      Thank you.

      Roy

      • marcus

        Hi Roy, I am a degree holder too. And I support your argument for fair wages. Do you intend to join any political party? I think you have a good heart and mind. Please help Singapore. We need more people like you. Thanks.

      • Roy Ngerng

        Hi Marcus,

        Thanks for this.

        I have thought about joining a party, so that I can help to create a more equal and fairer representation in government. But that depends on how things progress and whether the parties believe that I am the right fit for them as well.

        Thank you for this. 🙂

        Roy

  4. Roy Ngerng

    Hi to all readers,

    To also clarify and be clear, I had written this set of articles on the ‘Fair Employment Framework’, because my aim is to show the loopholes that this “framework” has.

    Also, if the government is sincere about encouraging employers to employ Singaporeans “fairly”,
    (1) There needs to be much more defined and clearer articulation of what the guidelines and proof of workings are.
    (2) The “framework” should also not be discriminatory. It’s current format harks back to policies of “eugenics” that the PAP had created before. (Old habits die hard, eh?)

    To have a complete idea of what the “framework” is about, or not, you can see the links below:
    https://thehearttruths.com/2013/09/25/the-truth-about-the-fair-consideration-framework/
    https://thehearttruths.com/2013/09/26/the-fair-consideration-framework-is-just-a-new-job-recruitment-website/
    https://thehearttruths.com/2013/09/24/what-do-you-think-of-the-new-fair-consideration-framework/
    https://thehearttruths.com/2013/09/26/why-did-the-fair-consideration-framework-only-cover-degree-holders/

  5. Loke Fook Seng

    Employment rates may be just a reflection of the jobs availability in that sector or academic grade against demand for jobs rather than the degree of competition from foreigners. One additional set of statistics to look at is the ratio of foreign vs local working in that sector which should give us a clearer picture of where the keenest competition is and where action needs to be taken. Of course, competition alone without a high unemployment is not necessarily a bad thing but we need to analyse further whether that situation will hamper upward mobility of locals.

  6. Pingback: The Fair Consideration Framework Exposed: All You Need To Know! | The Heart Truths
  7. William

    I will never trust the PAP anymore, they come up with this wayang thing to “please” Singaporeans so that they can wayang their way to win the next election. Look at the huge influx of foreigners from workers all the way to senior executives that have come to Singapore to work all these years. It cause a huge uproar on housing costs, living costs, jam up the roads, mrt and buses and while these increased in foreign population and employment, many poor singaporeans out of job or got to go for a lower pay job like driving taxis when they were senior executives previously……so sad……
    Look around you, these foreigners who took up these jobs, is it true that no Singaporeans can do their jobs??? I highly doubt so. So why are they are here? Because of our government leg open wide policy to allow them in, many are cheaper than Singaporeans in terms of total costs paid by employers, many are here also because their own kind hire them, like a white caucasian person will tend to hire its own kind etc….
    Don’t forget also Permanent Residents are foreigners, they took up PR to avoid being labelled as foreigners so they can enjoy similar benefits like Singaporeans….. Singapore should do away with the PR scheme….these foreigners just want to earn the Singapore dollar and retire back home when its time.
    anyway I hope the PAP will lose majority in the next 2016 election!

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