Thursday, March 4, 2010

Raising foreign worker levy means depending less on foreign workers?


Chairing at the table was Mr Teo who was flipping through some papers in his hands. Ah Tan, Ah Lim, Ali and some other senior executives were seated at the table.

MR TEO: Ladies and gentlemen, today we're here to brainstorm on how to implement the foreign worker levy hike as a means to control their number. Boss has suggested implementing this levy increment carefully over the next three years. As you know, it is not logical to suddenly increase the levy by like a hundred dollars, thus we need to do it slow. Now we have to come up with a plan to implement it efficiently.
JESSICA: Sir, although the rise in levy is graduated over three years, there is concern expressed by some business leaders that this may impede the ability of companies to make more money as their capacity will be impacted. Currently they can sack their local workers and replace every one with three to four. With the levy, they may only be able to replace one with two.

Some others at the table nodded their heads in agreement.

MR TEO: Jessica, good point. But that is why Boss has not stressed enough on the importance of improving productivity!
JESSICA: But Sir, we can only teach the locals to be productive, and productivity improvements of local talent will not be immediate and it will take companies some time to implement longer working hours and money to buy more machines to innovate and achieve greater productivity.
MR TEO: How difficult can it be? All they need to do is to tell the locals that if they are not taking up more jobs, a foreign worker is always ready to replace them! That shall push the locals to work harder! As for the machines, just get second-hand ones!

Ah Lim put up his right hand. All looked towards his direction.

AH LIM: Er... so if we can make the locals work harder and increase their productivity levels, we don't need foreign workers anymore?
JESSICA (shaking her head): No, it doesn't work that way. Foreign workers can never be replaced by locals. It is especially difficult, in the short term at least, to change the mindset of Singaporeans to take up certain jobs in industries like construction which is seen as strenuous and dirty, and some services jobs that require long hours of standing like soliciting at Geylang.

Some men at the table nodded their heads in agreement. One of them appeared to have even whispered to the person next to him "And they're prettier too". Send put up his right hand. All looked towards his direction.

SENG: Jessica is right. We need these foreign workers. If we do not have enough manpower and other resources to take added new orders in the world markets, we may lose all our customers and business opportunities to our competitors very quickly. For example, everybody knows that a lot of those MNCs have shifted their operations to India. But if we can bring in the Indians from India, these MNCs will give us their business instead!
ALI: But I heard that those Indians are giving a lot of problems to those MNCs! They have long turn-around-time and make lots of mistake! They even openly refuse to work during the cricket season! They have low productivity! They're even more relax than us!
MR TEO (grunted): Ali, didn't you read the memo? We're only concerned with raising the productivity of the locals. Never the foreign workers! We all know how low their productivity is! Just take a look at the roadworks when you drive to work! Why are those simple roadworks taking such a long time to finish? Didn't you often see three to four workers looking at one worker working? So yes, we know they are damn slow, we know their productivity level is damn low, but they're cheap so it's okay!

Ali gave an "Oh!" apologetic look and scratched his head. A skinny man seated at the furthest corner slowly raised his right hand. Mr Teo frowned.

LOW: Sir, I'm just thinking... after we've raised the foreign worker levy, won't the businesses be inclined pass the additional cost to their customers? The F&B businesses could increase the prices of the food and drinks; the transportation businesses could increase the prices of public transport; the construction businesses could increase the cost of building our flats, and in turn to cover this cost, HDB could increase the price of our flats, making them even more unaffordable! We might be just adding this cost burden to the people!
MR TEO (raising his voice): Low, we are living in a world class city and so a high cost of living is expected! Just like we have a world class transportation, so our public transport is expensive! We are world class leaders, so our salaries are expensive! If the locals want to have lower cost of living, they can go to those filthy third world countries like Indonesia! Hey, they are the ones who complained about the influx of foreign workers, so we're now raising the foreign worker levy to slow it down!
LOW: But Sir, instead of raising the levy which still might not work, based on the reasons that I have just stated, why don't we just cut down on the number and forget about the levy? Just put up a policy that businesses must have a higher local to foreigner employment ratio, like ten to one?
JOSEPHINE (interrupting): And so how does Mr Low propose that we allocate the foreign workers quota efficiently to businesses without a levy mechanism? Would it be right for civil servants to pretend to know all about market demand and supply? Removing a levy is turning a blind eye to the social disparities they create!
LOW (frowned): What are you talking about? We are selected by the people, and our salaries are paid by their taxes to work for them! Why must we pretend to know? How can we pretend that we've done our job? If we don't know about market demand and supply, we just have to get out of our cubicles and do some homework! I'm sure a couple of meetings with the right people should do the work! I believe that we can control the foreign workers quota without a levy mechanism! Why must anything and everything in the country be controlled by levies and fines?
JOSEPHINE (snapped): Why must we impose the levy? Do you know how much we're making from these foreign worker levies? It's just like the COE and ERPs that our LTA colleagues implement! Frankly, we don't care what is the local to foreign worker ratio! I don't care whether the waitress serving my salad is a local or from China, as long as she gets my order right! The primary aim of this foreign worker levy is not to slow down the influx, but to make more money for our country! For all you know, this foreign worker levy hike might just be enough to cover our losses from GIC and Temasek!

Mr Teo slammed his right palm on the table and pointed his finger at Josephine furiously. He was in such a wrath that his finger was shaking. Josephine was stunned and stopped talking abruptly.

MR TEO (thundering): Josephine! How many times must I remind you that nobody in this office should talk about the GIC or Temasek investments?

A small stream of perspire trickled down Josephine's cheek.



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