The Real Reasons Why Singaporean PMETs Are Losing Their Jobs

(This is a shortened article of the article that I had published yesterday.)

On May 4 this year (2013), Prime Minister Lee Hsien Loong was quoted to have said that, “Polytechnic students have many good options after graduating and need not just aim for a university degree.”

National Development Minister Khaw Boon Wan had also said that, If they cannot find jobs, what is the point? You own a degree, but so what? That you can’t eat it. If that cannot give you a good life, a good job, it is meaningless.

Minister for Social and Family Development Chan Chun Sing also said that, “It’s not the degree or the diploma… that is most important.

But the truth of why the ministers are saying these is perhaps best captured by what Khaw had said: “What you do not want is to create huge graduate unemployment.”

Since 1998, the unemployment rate among Singaporeans who have tertiary education have grown tremendously to be the highest among all the high-income countries now (Chart 1).

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Chart 1: World Development Indicators

Things are even clearer when you look back to 1985 – from having one of the lowest unemployment rate among the high-income countries then, Singaporeans with tertiary education now face the highest unemployment (Chart 2).

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Chart 2: World Development Indicators

Interestingly, this also coincided with a sudden boom of people in Singapore with tertiary education, when there was a sudden spike between 2007/08 and 2009/10 (Chart 3).

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Chart 3: Global Education Digest

But do you know that even though we have one of the highest proportion of tertiary educated people in Singapore, the proportion of Singaporeans enrollment into local public universities is actually one of the lowest? Singapore actually has one of the lowest enrollment into public universities, as compared to the other high-income countries.

Singapore’s university cohort participation rates is actually much lower than the other high-income (Chart 4).

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Chart 4: Report of the Committee on University Education Pathways Beyond 2015 (CUEP)

Thus if there is comparatively so much fewer students going into local public universities but there is such a massive proportion of people with tertiary education in Singapore, then where is this huge additional pool of tertiary-educated workers coming from?

Four reasons:

(1) Singapore’s CECA Agreement With India Does Not Protect Singaporean Workers

First, as I had discussed before, do you know that in the Comprehensive Economic Cooperation Agreement (CECA) between The Republic Of India And The Republic Of Singapore, there are clauses which allow easy access for foreign workers from India to work in Singapore, because Singapore is not allowed to “require labour marketing testing” for the entry of these workers – so Singapore is not allowed to enact policies that protect Singaporean workers over foreign workers (Chart 5).

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Chart 5: Comprehensive Economic Cooperation Agreement (CECA) Between The Republic Of India And The Republic Of Singapore

Also, these workers have “been allowed to bring in their spouses or dependants (and Singapore is required to)… grant the accompanying spouses or dependent of the other Party the right to work as managers, executives or specialists.” (Chart 6)

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Chart 6: Comprehensive Economic Cooperation Agreement (CECA) Between The Republic Of India And The Republic Of Singapore

Of course, it wouldn’t be illogical to assume that India would not be the only country where such clauses exist to protect foreign workers over Singaporean workers. Of the other agreements that Singapore had signed with the other countries, which other agreement would also allow for such an easy entry for their workers to compete with the Singaporean workers in the job sector of “managers, executives or specialists” – jobs which Singaporean PMETs also take on, but would thus face significant competition due to the lax border policy?

(2) The Lack Of Levies And Quotas For The Employment Pass Disadvantage Singaporeans

Second, do you also know that when companies hire workers on Employment Passes (E Pass), they do not need to pay additional levies on these workers or adhere to any quota (Chart 7)?

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Chart 7: Ministry of Manpower Levies & quotas for hiring Foreign Workers: E Pass employment is exempted from levies and quotas

To qualify for the E Pass, foreign workers are required to “earn at least $3,000“. This means that workers on E Passes would directly compete with Singaporean university graduates and PMETs, whom starting pay is $3,000.

Thus as there are no levies or quotas to hire workers on E Passes, there is no restriction or disincentive for companies to hire foreign workers over Singaporeans in positions which require a degree – and this would necessarily put Singaporeans at a disadvantage. Has this contributed to the over-influx of tertiary-educated workers and the resultant high unemployment?

Not only that, the Ministry of Manpower had also explicitly stated that, “spouses of Employment Pass holders can (also) work in Singapore, adding to the competition.”

(3) The Fair Consideration Framework Will Not Protect Singaporeans

Third, the PAP government had recently announced the Fair Consideration Framework which they would like to use to “persuade” employers to consider Singaporeans fairly before hiring Employment Pass (EP) holders”.

But as I had written previously, this “framework” doesn’t have any bite because the MOM had said that it “does not review the merits of a firm’s hiring decision, as the firm is best placed to decide on which candidate can do the job“. Essentially, this “framework” does not fundamentally change the nature of hiring practices in Singapore. Employers are still allowed to advertise on different platforms on job openings, they are still allowed to interview foreigners concurrently with Singaporeans, or even interview foreigners only, and they are allowed to hire foreign workers without any justification.

Thus the broad policy measures created by the PAP government will in no way protect the employment of Singaporean degree holders over competition from other countries.

(4) Over-Influx Of International University Students In Singapore

Finally, as I had discussed in an article earlier this week, the PAP government is bringing in foreign students on scholarships – 20% of each batch of undergraduates are foreign students, of which 52% are given scholarships. Are the rest of the 48% also on some form of financial assistance? Also, “upon graduation, scholars are obliged to work in Singapore or Singapore companies for up to six years,” which again is competition with the Singaporean university graduates.

Playing our role in educating our friends from neighbouring countries is a role that Singapore can admirably perform but the question to ask is – if there are also deserving Singaporean students for scholarships, why is it that only less than 6% of Singaporeans are on scholarships, when 52% of foreigners are on scholarships? And if there is already a saturation of degree holders in Singapore, shouldn’t the PAP government focus on grooming the students in Singapore instead of creating a glut of degree holders in Singapore, by importing even more foreign students in Singapore, who eventually compete in jobs that Singaporeans are losing?

This is no wonder that Lee, Khaw and Chan would go to such great extent just to convince Singaporeans that a polytechnic diploma is a more viable “option” than a university degree – there is growing unemployment among tertiary-educated Singaporeans but instead of managing the inflow of foreign students and workers in Singapore, they have instead asked Singaporeans not to further their education. Is this what a responsible government should do?

Not only that, if “a diploma holder’s average starting salary is $2,000, while that of a degree holder is $3,000 (Chart 8)”, then by the PAP ministers asking Singaporeans to not pursue a degree, are they asking Singaporeans to also put up with earning lower incomes?

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Chart 8

As I’ve written before, Singaporeans already earn the lowest wages among the high-income countries. Thus this means that for degree graduates, their wages are already depressed, which would be even more so for diploma graduates. Diploma graduates are also more likely to see their wages depress or stagnate over their lifetime.

What this means is that if the PAP is serious about wanting Singaporeans to see a polytechnic diploma as a viable “option”, they would also need to ensure that Singaporeans are paid wages that are also “viable” to the standard of living in Singapore.

Finally, the more important question is not whether Singapore should produce more university graduates but whether our graduates have the skills and flexibility to work in the labour market?

Indeed, in the The Global Competitiveness Report 2013–2014 report, when compared to the other high-income countries, among the “most problematic factors for doing business”, a higher proportion of employers voted on Singapore as having the most insufficient capacity to innovate (Chart 9).

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Chart 9: The Global Competitiveness Report 2013–2014

To sum up, the increasing unemployment among tertiary-educated Singaporeans can also be attributed to the lax agreements that Singapore had signed with other countries and the labour policies enacted that can be exploited through the inherent loopholes. The solution would be to ensure that the agreements and labour policies provide stringent protection for Singaporean workers.

However, it is clear that the PAP government is resistant to do so. As such, they have decided to take the easy way out to persuade Singaporeans not to take university degrees. But this is at the expense of educating your own citizens and strengthening the local core and pool of tertiary-educated Singaporeans. It is surprising that the PAP government would be willing to compromise on the people’s education and Singapore’s long term future – a core population that is weakened in their education will threaten the foundation that prop Singapore up.

Lee, Khaw and Chan have not addressed the right question when they try to persuade Singaporeans to see polytechnic education as a viable “option”. Just because there is increasing unemployment among tertiary-educated Singaporeans doesn’t mean that the immediate solution should be to reduce the number of tertiary-educated enrollment. This is short-sighted, a knee-jerk reaction and not well-thought through.

Instead of the PAP ministers saying that Singaporeans should opt not to enter universities, the more apt response would be to look at how universities can be made more relevant to the needs of Singaporeans and to the job market. The Ministry of Education had noted that, “in Finland, the government expanded the higher education sector by creating a distinct tier of polytechnics/universities of applied sciences (UAS),… (where) their mission was clearly defined as providing vocational and professional training for labour market and industry needs… Students would typically graduate with a Bachelor degree after three to four years of study.” Thus there is a need to relook our understanding of what a university education means, and how it can be redesigned to not only expand the opportunities for Singaporeans, but to ensure that a university will continue to be relevant to the job market.

24 comments

  1. Hanafi

    I would rather you not create another version of the same article. It is confusing… now dunno whether to comment here or comment there.

  2. zhao

    Hi Roy,

    I commented earlier on your previous article. You edited the previous chart but I guess my point still stays, so I am going to repeat it.

    As your graph has stated, the percentage is for % of unemployed tertiary students out of total unemployment. So, considering that our overall unemployment is at 2%, compared to the 6%-9% in many other countries (or even higher in many European countries), we are okay in that respect no? I went to see the source you cited for myself, and the breakdown for primary, secondary and tertiary is 27, 23 and 50, which adds up to a 100%. So while it seems like 50 % of tertiary students are unemployed, it is actually only 1% (by rough estimates) of the entire working population that are unemployed and are tertiary students. The breakdown of percentages that you provide only shows the educational profile of the people who are unemployed in Singapore, and as you mentioned there is a sharp increase of tertiary students over the past few years which could explain this shift in proportion.

    I appeal to your common sense, as I believe that you are coming to a wrong conclusion, according to the diagram you provided and in your own words you stated,

    “Since 1998, the unemployment rate among Singaporeans who have tertiary education have grown tremendously to be the highest among all the high-income countries now (Chart 1). Things are even clearer when you look back to 1985 – from having one of the lowest unemployment rate among the high-income countries then, Singaporeans with tertiary education now face the highest unemployment (Chart 2).”

    The number that you have used is 50%. 50% leh! That means 1 out of 2 citizens with tertiary education is unemployed? Touch your heart and you know that it is not true. Furthermore, wouldn’t polytechnic education be considered tertiary education as well? So this does not support your view that the ministers are asking people to go to polytechnics as degree holders cannot find jobs.

    I hope you respond constructively to my comment as I believe that dialogue is needed on the education landscape. No system is perfect and I believe that the only way to improve is constructive criticism and not using flawed data analysis and skewed arguments.

    • Roy Ngerng

      (1) No – didn’t edit the chart, otherwise, I would put a note there.
      (3) Wrong – 1 in 2 of all workers unemployed have tertiary education, and not of all tertiary educated.
      (2) Unemployment statistics are much higher in Singapore than reported – 8%, or as high as the other developed countries:
      http://therealsingapore.com/content/unemployment-rate-singaporeans-could-be-79-not-38
      http://therealsingapore.com/content/why-are-singaporean-pmets-losing-their-jobs-here%E2%80%99s-why

      • zhao

        Hi Roy,

        Okay my mistake, I meant that you removed it from this version of the article, not that you edited its content.

        That being said, what is the point of showing that 1 in 2 of all workers that are unemployed have tertiary education? As you mentioned, this is due to the rapid increase of people who have tertiary education, which would understandably increase % of unemployed people who have tertiary education. Also, tertiary education also includes polytechnic students and not just degree holders and this would explain why a higher proportion of our unemployed have tertiary education.

        Lastly, you cannot just refer to statistics like that and claim that unemployment is higher than reported. According to the two articles you posted (of which one was a link back to this article), the article that claimed higher unemployment rates say this

        “Taxi drivers are considered as self-employed. But many are doing this as they have no choice.”
        “When a woman takes care of home, she calls herself a homemaker. An unemployed woman may also call herself homemaker. Don’t know how many.”
        “When a person has stopped working in the older years, are called retiree. However some people in their 50s or 60s would prefer to call themselves retirees than unemployed. Don’t know how many.”

        Are you really going to use that as a concrete source of data? You might as well say, “Doctors wish they could be doing something else, don’t know how many” and consider them unemployed. The author then goes on to arbitrarily calculate a new unemployment rate (using don’t know how many as an estimate). How can you possibly use this as an indication of unemployment in Singapore??? Furthermore you said that this is as high as other countries. Unless you apply the same benchmark to other countries you cannot assume that our unemployment is as high as them!

        Looking forward to your answer.

      • Roy Ngerng

        (1) I summarised this article. I did not remove any information from this article. It’s a new article.
        (2) There is no open data in Singapore – Singapore does not have ready access to statistics for their own analysis, unlike in other countries. Doesn’t make sense at all to include housewives, NSF and retirees under “employment”. I would like to see the Ministry of Manpower (MOM) analyse the statistics for housewives, NSFs and retirees in all their reports – I don’t see that. In fact, I would like to see the MOM advocate to their employers to pay them “fair wages”, and if the idea is that they are not “employed” but conscripted, then why are they included in the employment figures?

      • Opinion

        This is the first time I’m seeing people use data from TRS. They are by far the worst socio-political website here in sg. TOC is much more reputable. Hell, even newnation.sg can be given more trust than TRS. Instead of citing a credible institution or academia, you decide to cite TRS. Just because no data is available does not mean you should just pluck some out of the cesspits of the internet. Like that I should just go around citing newnation and the onion and say that my data is true because its the only one available. And because internet says so then internet must be right.

  3. Roy Ngerng

    Dear readers,

    There are commenters who are coordinating an attack on the blog to discredit the blog.

    The aim of this blog is to bring out issues and to discuss them in a perspective not discussed before, to set us thinking. Readers are encouraged to continue doing your own research and to join the dots for yourself what is really happening in Singapore.

    Most Singaporeans know what’s really going on in Singapore and we know what needs to be done. I hope that with more awareness, we can work towards a goal that would be more beneficial to Singaporeans.

    Please discern the information on this blog and in the comments, and come out with a conclusion of your own. Be empowered with the information and the right to make your own decision.

    All the best!

    Roy

    • zhao

      Hi Roy,

      I’m replying to the message above as I can’t click reply there.

      The method to calculate unemployment is more or less consistent across other countries, data present or not. You cannot assume that we have 8% unemployment using your own metrics and compare it against other countries. If we followed your definition, unemployment in other countries would be considerably higher also. Also, housewives and retired citizens are not considered employed but economically inactive. I went to search and found a breakdown for the economically inactive segment of Singapore. You can see it in the list of data sets here: http://stats.mom.gov.sg/Pages/Labour-Force-in-Singapore-2012-Economically-Inactive.aspx under Main Reason For Not Working below. This is consistent with other countries as well.

      With regards to NSFs, they are by law prohibited to seek employment during NS and they are full-time NSFs who draw a (meager) allowance. Even if you contest their status as employed, they are definitely not unemployed and would belong to the economically inactive portion of the segment as their status as NSF do not allow them to seek employment.

      Looking forward to your reply.

  4. zhao

    I don’t understand how that is our issue here. Our initial topic was on tertiary unemployment. But fine I will indulge you on that front. Regarding NSF allowance, I would wager that the 480 (used to be 400 during my time) is definitely not enough as an income. However, 480 is not the net amount that is invested in each NSF. We have to include food (1-3 meals a day depending on whether you are stay-in a not) and lodging as well. I am not saying that these all add up to NSFs being self-sufficient on their own allowance. I was an NSF myself and understand the woes of being an NSF but I personally believe that with proper saving measures it is possible to get by for the two years they have to serve (without saving as it is an allowance not a wage).

    Going back to the issue, I really believe that unemployment is not as bad as you envision it to be (8% unemployment, loads of tertiary students unemployed). I really want to question your use of data and graphs and how you come to your conclusion. I understand we all have our own beliefs and viewpoints but if your viewpoints are built upon flawed data I think it is very irresponsible for you to sensationalize it and present it in this manner.

    • Roy Ngerng

      No – my question is – we spend two years of what we could have spend finding employment, and if so, should we be paid a wage that is commensurate to one who seeks employment? Is $480 what a person should earn, accounting for saving for now, healthcare, saving for retirement etc?

      Data is flawed because Singapore doesn’t have open data. Singaporeans are able to have an adequate picture because statistics such as theses are not readily available. Perhaps the question to ask isn’t whether we are able to analyse the statistics, but whether there is enough statistics to begin with.

      • K

        Sorry, but you seem to have a very flawed understanding of what NS is. NS isn’t a job. It is a responsibility that entails a sacrifice on your part. NS isn’t meant for you to earn money for healthcare or retirement, and that’s why you are paid an allowance rather than a wage.

      • zhao

        Hi Roy,

        The data is not flawed because of the lack of open data. It is flawed because of your selective usage and random correlations. Just because the data is not there does not mean you make up your own without any backing. Cross referencing your own data (which is already built upon shoddy interpretation) and other shoddy sources does not make your statement true. I really wish that you will revise all the assumptions that you have made and if it is untrue, perhaps edit it or remove it entirely. False reporting is very irresponsible.

    • K

      The TRS article stating that unemployment is as high as 8% in Singapore is crap. As you have pointed out earlier, homemakers, retirees and NSFs do not count as being unemployed because they are not actively looking for employment. This definition of unemployment is also used by other countries in calculating their unemployment rates.

      I am not sure why Roy is trying to change the topic to NSF pay, or why he believes that there is a “coordinated attack” on his blog when most of these so-called “attackers” are just pointing out the obvious logical flaws in his arguments.

      • onered

        I agree with you. It is laughable that the author always try his best to paint Singapore in a bad light, by citing doubtful sources such as TRS and ignores much more reliable statistics or estimates

        Roy, you are not making the citizens more aware about the current situation of Singapore, you are actually misleading them. You are clearly having an issue of selection bias here, stating information that reinforce you bias and warp view about the country and do not acknowledge others that do not.This may be contrary to your belief, most people are not trying to discredit your blog because they are pro-PAP, but because of the data that you use and the conclusions that you draw are always misdirected and filled with fallacies.

        Regards

      • Sgcynic

        Very interesting that onered’s WordPress page is blank. Almost as if an account,was created for an expressed purpose. Lol

  5. john

    Let’s not discredit Roy’s effort. As Roy has pointed out, the government does not provide all the necessary data for the public to scrutinise. Why is data being concealed and withheld?

    • choofrfreoer

      No government can ever provide all the necessary data because of tensions this may cause. Furthermore, there are always enemies beyond Singapore’s frontiers waiting to pounce on any weakness and stir dissent.

      Like if we had data on all the salaries of workers, we could find interesting trends between races. Who is to say this wouldn’t stroke racial tensions?

      And then someone with dysfunctional logic will go, “because I’m from xxx race, therefore I am discriminated in my job and earn less”, even though correlation doesn’t imply causation. This “discrimination” argument is always very persuasive because people will never blame themself like question if they deserved better pay; they will always choose to blame others.

      In fact, that’s exactly what Roy is saying for other articles isn’t it? Trying to draw causative links for merely correlated data without even investigating the cause. He says, “People come from xxx school, so therefore they are discriminated against when applying to enter university”, while failing to ask if the people in question indeed do deserve to enter university based on academic abilities.

      • Tong Hon Yee

        I don’t really agree that Singapore should censor its data just because it’s sensitive. For instance, data about racial trends can be put to good use by allowing us to understand the situation of different races and find ways to implement policies to bring about equal opportunity – I am not saying they should have equal outcomes, I am saying that it is possible that one race is systematically disadvantaged by lower endowments, for instance.

        Also, claiming that there are “enemies beyond Singapore’s frontiers waiting to pounce on any weakness and dissent” borders on conspiracy theory. Firstly, there is enough “weakness and dissent” to pounce on already. Secondly, I’ve not heard of secret agents using numbers to cripple and destabilise a government.

        Ultimately, if there’s one thing I agree with Roy on, it’s that we need more transparent figures. The comments section in one of Alex Au’s posts (http://yawningbread.wordpress.com/2013/10/27/one-quarter-of-singapore-households-below-poverty-line/) had the interesting insight that Hong Kong’s statistics actually want to be read, and are much more transparent and organised than ours. It’s yet another thing we can learn from HK.

        More data and statistics has more pros than cons. It means credibility and empirical evidence can (eventually) trump conjecture and flawed reasoning. It means information is not monopolised and abused – I’d rather data be hurled all over the place by everyone, than wielded by a single person to subjugate everyone else.

        Also, I feel that Roy is being quite brave in trying to draw causal links from the correlations he tries to observe. It’s ultimately a normal human tendency to draw causal links from correlated events: you do it all the time. What’s important, though, is that we are willing to revise our assumptions in light of new information and alternative opinions.

  6. zhao

    Hi Hon Yee,

    I do agree with you that the government should be more open in sharing data and allowing citizens to be privy of some of the things that are going on. However, my issue is with how Roy attempts to come up with his own conclusions using flawed and inaccurate data sets and assumptions. If you look at his blog posts, he constantly refers back to his own posts as proof and evidence as well as other dubious sources. Also, when he uses official data, he uses very selective data without considering the context behind it (see his post on CPF on adequate pension, and government spending on grants given towards university education). I appreciate his efforts in trying to create awareness for important issues in Singapore but frankly the rigor of his analysis is nowhere near reliable.

    Lastly, I totally agree that we must be willing to revise our assumptions, which is why a lot of the commentators are questioning his data analysis. Rather then resort to personal attacks I think it is important for us to discuss matters rationally and logically and if Roy is so stubborn to not remove or at least correct some of his assumptions then I feel that it is very irresponsible of him as he will mislead readers who take in his material superficially with sensational titles. It is easy to criticize mainstream media for distorting facts, but by doing it himself isn’t he being a little hypocritical? If we are going to be critical of mainstream media, we have to be critical of alternative viewpoints as well. Alternative viewpoints does not mean that they are the truth.

    Roy, the onus is on you to respond to these comments and reconsider and rethink the bold statements that you make. Unless you can back them up with concrete data, I really think you should consider removing them. Poor scholarship like this will come back to haunt you in the future and you don’t want that against your name.

    • Tong Hon Yee

      Hi zhao, I was responding to choofrfeoer’s comment, not yours. I don’t disagree with what you’re saying, but I’m tired of trying to have an objective discussion on The Heart Truths. After painstakingly dissecting his analysis and doing some of my own and correcting the misleading phrasing of one of his previous posts, he promised to make two corrections to his charts. However, as of this morning, three days after his promises, he has yet to edit the charts.

      In other words, good luck trying to make your point heard. I wish you all the best.

      If you want better analysis of current social and political affairs from an opposition perspective, may I suggest you visit http://yawningbread.wordpress.com For instance, Alex Au has done some work regarding a relative poverty line as Roy also has, but Alex has been much, much more transparent and objective in his methodology, freely admitting to the limitations of his conclusions but clearly stating the rationale for his figures and the reasons for the necessity of even a flawed measure.

      I decided to respond to choorfrfeoer’s comment and rebut his argument for transparency in the hopes that people like Roy can see that I’m not part of a coordinated effort to topple him. I’m actually just trying to be objective and reasonable, and will attack viewpoints in support of the government if they are not valid. And I do strongly feel that government censorship of such data (which is available in other countries) is indefensible.

  7. Pingback: Budget 2014: Three Things We Missed About The Budget | The Heart Truths

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