The action hurts low-wage workers such as cleaners and security officers, says NTUC leader Zainal Sapari.
Labour MPs have largely avoided criticising employers and their practices openly in favour of raising concerns behind closed doors.
But outspoken National Trades Union Congress assistant secretary-general Zainal Sapari yesterday hit out at businesses that have outsourced their work without heed for the lot of low-wage workers, many of whom are hurt in the process.
"Outsourcing has led to market failure, contributing to the depression and stagnation of wages of many low-wage workers such as cleaners, security officers, to name a few," Mr Zainal wrote in a blog posted on the labour movement's website yesterday.
Cheap outsourcing forces contractors to lower their bids to win contracts, and lower bids mean lower salaries for workers, said Mr Zainal.
He cited his unnamed aunt as an example.
The retired carpark warden saw her monthly salary steadily rising from $235 in 1977 to $1,459 in 2005, which is the equivalent of $1,877 today.
But carpark enforcement is now outsourced, and wardens earn only $1,000 to $1,200 a month. "Can they earn $1,877? Good luck with that!" he wrote in the blog.
Mr Zainal said the majority of businesses are not "demons exploiting their outsourced workers", but they are willing to stop cheap outsourcing only if their competitors also stop doing so.
To these employers, he said: "Thanks for the support, guys! But really, how much would it affect your competitiveness given that the costs of buying such services would be very small in relation to total operating costs and rental income received?"
Mr Zainal also criticised management guru Peter Drucker, who in the 1990s coined the phrase: "Do what you do best and outsource the rest."
"I wish Peter Drucker had said this instead, 'Do what you do best, outsource the rest but don't outsource your responsibility!' "
The blog post was titled "Peter Drucker, do you know what you have done?"
It came two weeks after Mr Zainal called in Parliament for the law to be updated to make it compulsory for employers to follow National Wages Council (NWC) guidelines on pay increases for low-wage workers.
If it cannot be made mandatory for all, at least make it so for the cleaning, security and landscape sectors, which hire a large number of low-wage workers, he had said.
Since 2012, the NWC has recommended four rounds of pay hikes of at least $50 and $60 for workers earning up to $1,000.
But only about six in 10 private- sector employers gave low-wage workers earning up to $1,000 a minimum suggested pay increase of $60 in 2014, Manpower Minister Lim Swee Say told Parliament last month.
The NWC, which meets annually, is expected to issue its wage recommendations around the middle of this year.
Mr Zainal's blog is at labourbeat.org
This article was first published on Feb 14, 2016. Get a copy of The Straits Times or go to straitstimes.com for more stories.