Income data may not tell full story

Income data may not tell full story

Professor Hoon Hian Teck's commentary ("Relook link between low wages and foreign workers"; Nov 27) provided data to show that the influx of foreign workers did not depress the real wage earnings of low-skilled Singaporeans, as is commonly believed.

The median real wage indicator used spans the whole workforce. As such, a number of well-performing industries, such as banking and finance, could have obscured the underlying trends in other sectors that faced challenges.

To illustrate this, from 2003 to 2008, gross monthly incomes fell by 0.6 per cent for workers at the 20th percentile, whereas median income growth was 7 per cent, giving rise to a gap of 7.6 percentage points ("Low earners' wages finally catch up"; Nov 30).

Furthermore, anecdotal evidence in certain industries, especially the food and beverage sector, suggests that the presence of foreign workers did suppress wages of low-paid jobs.

But this cannot be explained merely through income data because there are unique circumstances that drive salary-related decision-making in each sector.

For example, workers in restaurants work nine hours daily, but they have an "enforced" break of up to three hours for which they are not paid. So it is not uncommon for these workers to claim they work 12 hours daily. They also have to cope with a six-day workweek.

These sacrifices are not fairly factored into the wage package.

Conversely, non-resident workers, who do not have their families here, are understandably more willing to endure similar work conditions for lower pay.

There are ways to attract more Singaporeans to these jobs. One way would be to scrap the mandatory 10 per cent service charge, as most employers do not use the money to supplement workers' wages.

Tipping, which is a major source of income for waiters in the United States, on top of their fixed wages, should be introduced.

Automating the menu and ordering system with interactive IT systems linked to the kitchen is a laudable innovation. "Cashier-less" restaurants will be the next step.

In essence, it is more prudent to regulate the flow of non-resident workers by looking at the specific problems in each industry, and implementing structural changes to overcome that sector's manpower and productivity challenges.

Edmund Lam (Dr)


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