Forum Letter Reply to TODAY: Priority to create job opportunities, sustain wage growth for citizens

We thank Mr Freddy Liew and Mr Kelvin Seah for their views and suggestions in "Please shed more light, MTI" and "A clearer picture of trade-offs is needed" (Oct 1).

We agree that it is important to study the full costs of immigration. We are careful in bringing in foreign manpower at a rate that can sustain wage growth and create job opportunities for Singaporeans.

As suggested by Mr Seah, we adopt a targeted approach to bring in foreign workers. We consider each sector's manpower needs, the skill sets of our local workforce to fill those jobs and the types of foreign workers needed to complement locals.

A combination of quotas and levies is used to manage the inflow.

For example, we allow a higher ratio of foreign workers to local workers in the construction sector to support our housing and infrastructure needs.

Foreign workers in the marine and offshore sector take on lower-skilled jobs to help these companies stay competitive and support the employment of locals in higher-skilled jobs.

As discussed in the Occasional Paper, Singaporeans are increasingly better educated and will aspire to higher-value jobs. We will need to support local workers by complementing them with foreign workers with different skill sets.

The Government works closely with unions and employers to help low-wage Singaporeans upgrade their skills so that they can take on these value-added jobs, which would typically pay better. The Government has also introduced measures such as the Workfare Income Supplement Scheme, the Workfare Training Scheme and the Goods and Service Tax Vouchers to help these workers.

Mr Liew pointed out that some countries have higher income growth than Gross Domestic Product growth.

Singapore is a small, open economy; our wage levels are largely subjected to international competition.

Our experience and empirical data from developed countries show that economic growth is positively related to wage growth. The benefits of economic growth have filtered down to all groups, including lower-income households. From 2006 to last year, the 20th percentile saw real household income growth of 2.2 per cent per annum.

The average unemployment rate for lower-educated residents also remained low: 3.4 per cent over that period, even as foreign employment grew at a faster rate. Economic growth is needed for the opportunities and benefits a vibrant economy brings. It will also provide us with the resources to assist lower-income households.

We hope that our Occasional Paper on Population and Economy contributes to the population discussion, so that Singaporeans can better understand the trade-offs and collectively decide on a course for the future.

Mrs Cindy Keng
Director, Corporate Communications Division
Ministry of Trade and Industry