Singapore, where are the foreign workers going?

by Hannah Norton15 Jul 2015
The growth of Singapore’s foreign workforce has slowed, and it now makes up around one-third of the total workforce, the Manpower Minister has revealed.

Responding to a Parliamentary Question yesterday about foreign workers, Minister of Manpower Lim Swee Say said the annual foreign workforce (FW) growth has moderated from 144,500 in 2007 eight years ago, to 34,000 in 2014.

“In other words, the growth rate has slowed from 19% year-on-year (y-o-y) to 3% y-o-y over the eight years.”

The government’s aim was to moderate the inflow of foreign manpower “at a pace that we can accommodate”.

“Currently, the foreign share of our workforce is about one-third. We intend to maintain this. This means that the pace of foreign workforce should grow broadly in tandem with the growth of our local workforce as we move forward.”

Lim was also asked how many foreign domestic workers have been hospitalised over the past three years and how many of them have hospitalisation bills exceeding $15,000.

“Employers of foreign domestic workers (FDWs) are required to bear the cost of any medical treatment incurred by their FDWs so as not to transfer this cost to other taxpayers,” Lim said in his written response yesterday.

“To help employers meet this obligation, we make it compulsory for employers to buy medical insurance with a minimum cover of $15,000.”

In the past three years, a total of 120 bills for day surgery and inpatient treatment incurred by FDWs at public hospitals, or about 2% of such bills, were above $15,000, Lim said.

Lim was also questioned by MP Yeo Guat Kwang about whether foreign worker levies “no longer serve their original objective but only erode companies' margins… [and] whether reducing or doing away with the levies will benefit the Singapore workforce”.

Lim responded by saying that the levies, together with other measures such as the sector-specific Dependency Ratio Ceiling (DRC), serve three purposes – “manage the demand for foreign workers (FWs…  encourage productivity gains, and …level the playing field for Singaporeans rank-and-file workers to sustain real income growth.”

“DRC alone is not sufficiently responsive to the diverse needs across industries and companies,” Lim said in his oral answer.

“Set it too high and we will not be able to moderate the inflow of FWs. Set it too low and it will be rigid, and we will hit SMEs the hardest. Hence, we need to complement the DRC with FW levies to strike a better balance between a rigid quota cap and a flexible price mechanism.”

The challenge faced by all firms is to adapt to our new economic and manpower landscape, Lim said.

“On MOM’s part, we [will] lower the foreign worker levy for skilled work permit holders. This is to encourage employers to upgrade the skills of the workers, including work permit holders, so as to achieve higher productivity.”

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