Still chewing over the population debate

Grace Fu

Grace Fu stating clearly her priorities

I’m guessing Grace Fu hasn’t read the Institute of Policy Studies’ commentary  by the four economists from the Economic Society of Singapore, despite the Today paper finally giving it coverage two weeks after it was first published on 8 February and widely shared on social media. One of the writers, Donald Low of the Lee Kuan Yew School of Public Policy, had earlier condemned the Population White Paper for its lack of scholarship rigour, adding that, if it were a term paper, he would have absolutely no qualms failing it.

Or perhaps the civil servants under Ms Fu are unwilling to highlight to the busy minister a piece that rubbishes the myths promulgated by the White Paper they had painstakingly taken a year to gloss up to sell to Singaporeans. As a result, in countering the Workers’ Party’s just released Population Blue Paper, the minister continues to sprout tired rhetoric about businesses suffering and Singaporeans losing jobs as a result if we limit the growth in number of foreigner workers.

A few days ago, The Straits Times also carried an opinion piece by Linda Lim, a Singaporean professor of strategy at the Ross School of Business at University of Michigan, one of the top US MBA schools. Similarly, she raised doubts on the myth that fewer foreign workers will hurt growth and jobs. In particular, she questioned the accepted belief that we require hordes of foreign workers to build HDB flats in the construction industry, which in the US is a high-wage, high-skill, capital-intensive industry. So what we are seeing now is an increasing number of experts who are similarly tired of the PAP’s lack of fresh ideas, and taking turns to voice out against the flawed ideologies that it continues to champion.

To be honest, a lot of what these academics have written, other than being more coherently put across, are no different from what netizens, bloggers, opposition parties, and even former top civil servants such as Lim Chong Yah and Ngiam Tong Dow have said for the longest time — that businesses failing as a result of an over-reliance on cheap foreign labour is part of an economic restructuring that the country has to go through, better now than later, and that the results do not necessarily mean that Singaporean workers are worse off. The difference is that when these arguments are put across by netizens or opposition parties, they carry little weight and are shot down as hollow talk that fail to recognise the pains our SMEs are going through.

This continued discussion on the Population White Paper is an embarrassment to all the PAP MPs for their five days of empty debate where there was considerable lip service of empathy to the plights of Singaporeans but none of them, save for maybe Inderjit Singh, questioning the underlying economic assumptions behind the Paper. We are thus led to believe that either none of these MPs had bothered to speak to experts outside the government machinery, or they simply chose to ride along the party idea wagon. On its part, the Workers’ Party could have consulted members of academia and think tanks such as the IPS before the debate to inject more intellectual protein into what it said in parliament. It might be pleasantly surprised to find an increasing number of such people willing to supply it ammunition.

Our ministers are not fools, of course, and they constantly face increasing resistance from business lobby groups such as the Singapore Business Federation and the Association of Small and Medium Enterprises. Check out this simple Google News search and see all the news articles that come up on threats of failing businesses or companies moving out of the country. Naturally, it is the SBF and ASME’s job to safeguard the interests of the business community, but this is an area the government has to remain strong enough to stand against if it truly feels that tightening foreign labour is the right way to go. In his book The Price of Inequality, economist Joseph Stiglitz wrote that such rent-seeking behaviour from business and political lobby groups are one of the top causes of income inequality in society.

The Sunday Times today carried on its front page a picture of the CEO of Jumbo group waiting tables in one of his restaurants as a result of the labour crunch. I’m not sure he will be getting much sympathy from Singaporeans. For me, the message from the subsequent articles are simplistic and one-dimensional: diners are paying the price with poorer service, longer waits and higher prices as a result of a tightening of foreign labour. In short, you asked for it!

The paper highlighted the closure of TungLok’s Lao Beijing outlet at Tiong Bahru Plaza with a sign outside that explains that it has to close due to severe manpower shortage, as if to remind Singaporeans that it’s our fault for complaining of too many foreigners. We should be asking if these restaurant groups have over-expanded during the days of cheap foreign labour availability and are now paying the price. Over the years, they have reaped countless benefits of couse. No matter what, what is happening now is something Darwin would have approved of and there’s no point trying to protect these businesses as the four economists have pointed out.

However, there seems no escaping the fact that it will become more expensive to eat out in coming years, whether in restaurants or hawker centres. Sure, productivity gains could help reduce the need for workers and allow operators to pay staff more, but it won’t completely offset rising costs. Right now, we have a first world economy with developing world cost of dining out, sustained artificially by cheap foreign labour. Something has to give if we really want to arrest the growth of foreign worker intake and encourage more Singaporeans take up these F&B jobs.

But, similar to what the four economists pointed out when talking about healthcare spending, the higher dining prices you pay will go toward higher salaries for Singaporeans working in these restaurants, which goes toward addressing the income gap. So don’t complain too much when that happens, okay? Who knows, maybe if we eat at home more instead of dining out so often, our birth rates will also go up!