JOBS FOR RESIDENT WORKFORCE

[Mr Speaker in the Chair]

Debate resumed.

Dr Amy Khor Lean Suan: I would like to ask the Minister to clarify that when the NTU's study was reported, the Ministry did say that the data on the ratio of new jobs going to foreigners and Singaporeans were classified data. But the Minister said earlier that the data on employment change, which he just presented, are publicly available and these should be the information used. May I clarify if these two sets of data are identical? If the numbers in Tables 1 and 2, which were given, were obtained from Table 1 of the additional supplement that was given earlier, they also help its new jobs defined, because from the data that were supplied earlier, it seems that that is aggregate data. So it would also include job losses. Is it not more accurate to reflect the actual number of new jobs created and not the net new jobs added for our purposes, as to which are the areas where locals could actually look at in terms of employment?

Dr Ng Eng Hen: Sir, if I may refer to the Tables which I have circulated. For Table 1, the overall figures, both for employment change and employment level, are publicly available. It is the proportion of local and foreign workers that we have kept it sensitive.

With regard to providing information in terms of jobs and employment change and employment trends, these are internationally accepted criteria, so that there is some standardisation when we are comparing country to country. What you do with the information, of course, you are at liberty to do so. And here, I need to make a point. If someone takes the information and says that yes, there are jobs within these sectors but he does not want these jobs in these particular sectors - in construction, domestic, manufacturing - that is his prerogative. But the Government must still give the figures as they are, so that there is some level of comparison. This is what we would continue to do so. But I have said that I am mindful of the problems on the ground, that Singaporeans need some time to adjust to jobs which they did not previously like, and that is where we have placed our efforts in trying to get them into these previous areas so that we can reduce the unemployment.

Mr Steve Chia Kiah Hong: Sir, the Minister has not addressed the questions that I have put up. Secondly, I would like the Minister to clarify the definition of "locals". Does it include construction workers who live onsite and Malaysian workers who commute daily between Singapore and Malaysia for work?

Dr Ng Eng Hen: Sir, locals refer to residents. Residents refer to Singaporeans and Permanent Residents. Permanent Residents form about 10% of Singapore residents. And of that 10%, aged 15-24, about half of them are economically active. So the proportion in which they occupy for resident unemployment would be less, about 5-6%. And at the top level, 10%, if all of them are economically active. But it is usually about 5-6%. I am not sure which question I have not addressed in terms of what Mr Chia has said.

Mr Steve Chia Kiah Hong: The question is whether the Minister can clarify his comment that foreign workers are being used to moderate the wages of Singaporean workers. And what are the other national objectives that the Minister was referring to?

Dr Ng Eng Hen: Sir, I went to great length trying to explain our labour market policies. But let me address his questions pointedly. What I did say was that foreign workers' wages do reduce our overall cost and that is how we make our businesses competitive.

As to national objectives, I have said that in terms of releasing data, from time to time, there are situations with the country of origin from which these foreign workers came, despite the most sensitive and cautious handling. And we want to be mindful of this before we release all our information.

Mr A Nithiah Nandan (Nominated Member): Sir, the Minister has said that 9 out of 10 jobs went to residents of Singapore. Could he give a breakdown of how many of them are Singaporeans and how many of them are PRs, and whether there is any other category in these figures?

The other point which I would like to raise is that he has mentioned that many Singaporeans do not wish to take up certain jobs. There seems to be a perception problem because, on the ground, the reaction is different. Many Singaporeans feel that they have not been taken in for jobs for various reasons. Even when retrenchments occur, particularly in our factory or workplace, Singaporeans are given the pink notice while foreigners are still working. So there could be varied reasons. But this kind of feeling creates a lot of unhappiness among Singaporeans. I think it is important to periodically advise employers to also explain how the retrenchment exercise has taken place. Besides that, there are a lot of jobs which the Minister has mentioned. Can he explain to us how best he could redesign jobs or is there any greater emphasis that is placed on redesigning jobs so that more Singaporeans could take up such jobs currently being taken by foreigners?

Dr Ng Eng Hen: Mr Nithiah Nandan has asked for clarification on the ratio of 9 to 1. I have given these statistics. It is correct that from 1998 to 2002, out of the 102,000 jobs, there was a net creation of 93,000 jobs. But if that ratio does not reflect the reality on the ground, it is so. That is not the figure in the first place to look at. What we should be looking at is the net number of jobs created and the resident unemployment rate. If I could replace our fixation with some numbers, then I would say, let us look at the total number of jobs that have been created. And the lesson must surely be this: that we have to create enough jobs at least for additional entrants into our labour force every year. And the way we need to do that is to grow our economy, restructure to be competitive, reduce our costs, and that we must do.

In terms of perception, I agree. We are working with various agencies to try to encourage Singaporeans back into these jobs. In terms of retrenchment exercises, we do handle it together with a number of agencies, including NTUC.

In terms of redesign, I would ask the Member's indulgence to leave that to be further elaborated under the Workforce Development Agency Bill.

Dr Amy Khor Lean Suan: Sir, I would like to ask the Minister two questions. Firstly, he made mention of what I proposed, that is, try and hire local workers before going on to foreigners. He says that that is more stringent than the dependency ratio. I would like to ask how is that so, because for the dependency ratio, the employer just needs to employ according to the quota. He can go ahead and just employ up to the quota available.

The other point is, looking at Table 2, the common perception is that locals shun jobs in the manufacturing and construction sectors. Obviously, there is truth to this. But if you look at the numbers, could it not also be that, because there is a quota available to employers to hire foreigners, when jobs are reduced in the manufacturing sector, he just goes ahead to employ up to the maximum number of foreigners and actually some of these jobs could be released to the locals if job redesign or some flexible system is actually implemented?

Dr Ng Eng Hen: Sir, the question to ask is whether the suggestion proposed by the Member will result in more Singaporeans getting jobs compared to our current dependency ceiling because there are many instances where Singaporeans have tried to hire locals, and they cannot. So if we implemented that, there may be a net loss of jobs for Singaporeans.

She also alluded to the figures on manufacturing and whether our foreign worker policy has actually facilitated the exit of Singaporeans. It would be a fallacy to consider that the number of jobs - it is a finite number - and every number that you push the foreign worker out, a Singaporean gains. It is not so. As I have said, beyond a tipping point, beyond a certain point, with rigidity within the labour market policies, the economic response would be either "I relocate" or "I shut down". So if we make it more difficult for employers to get the type of manpower they need, they would have to do their calculations.

But having said that, I am all in favour of Singaporeans moving back to manufacturing. Indeed, we have been working with a number of agencies, including MTI and EDB, to have a manufacturing drive. The Mayors would tell you if you ask them. We have been asking workers why they were afraid of the manufacturing environment and sometimes, you get interesting answers. They thought that when you don these bunny suits, there must be something contaminated about the atmosphere and, therefore, there must be something wrong with the atmosphere. So we have to correct misperceptions like this. We would continue to work and try to increase the numbers because there are jobs available in the manufacturing sector and there is a steady pipeline. We would increase our efforts there as well.

Mr Loh Meng See: Sir, from the statistics that were given, there is no clarity in the grades of jobs, in other words, the executives, professionals and the blue-collar rank-and-file jobs. We see that in recent years, more and more of the executives and professionals have been retrenched or have been displaced, and they belong mainly to the services sector. I am pleased to see that the actual number of foreign content has dropped in recent years. But may I ask the Minister what are the chances of this group of executives and professionals being able to get into the workforce again because this is really a very visible and conspicuous group of people.

Dr Ng Eng Hen: Sir, Mr Loh is quite correct in that observation. For the last few years, it has been the first time that professionals, managers, executives and technicians form a larger proportion of those that were retrenched. The figure was about 40% of those retrenched, and that is a sizeable difference compared to previous years. But, in aggregate numbers, the unemployment rate for those who were diploma and degree holders is still around the national average of 4-5%. It is higher than usual, but it is not different from the overall figure.

Do they face challenges in terms of re-employment? Definitely. We read articles continuously, in terms of white collar jobs being under threat. For those of you who have time, I would advise you to read the Straits Times' article by Chua Mui Hoong on page 12 where she graphically depicts the problems. Let me also quote to you from the Asian Wall Street Journal of Wednesday, 13th August. This was by Matt Murray. It reads, "Sluggish US Recovery Forces Many Workers To Lower Their Sights". I quote:

"In five years at Nortel Networks Corp., Jimmy Richter won a series of promotions and saw his salary more than double, to $94,000 a year. He figured the upward trend would continue. But the opposite happened.

He was laid off in March 2002, and expected to find a new job quickly. But Mr Ritcher, 30 years old, got no offers in the telecommunications industry, which was shedding thousands of jobs of workers. After six months, he ended up taking a supervisory job at a cable company even though it paid little more than half as much as his old job.

"I used to identify myself pretty heavily through work", says Mr Ritcher. "Now I'm just Jimmy. I have a job, and I am glad, and I'll do the best I can at it, but that's what it is: a job.""

So even in the United States, globally, jobs are at risk. We are under threat. What is our response? We will have to restructure and retrain. We will face the challenges head on and jobs will come back and the economy flows.

Mr Iswaran: Mr Speaker, it seems to me that on this matter there are two aspects - the facts and the perception. The Minister has gone to some length to explain and lay out the facts clearly to us. Unfortunately, the outcome of this whole episode is that it has created a perception in the minds of many Singaporeans that the Government data in the public domain may not be giving the full picture, or the picture is not complete, and I agree with the Minister that this is an unhelpful perception, especially at a time when we should be focusing on the jobs and the economy and not on data and its interpretation as such. So I would like to ask the Minister in that spirit.

First of all, the data as presented in these tables are very compelling, but the Minister has said that only the top line is available in the public domain. So the question is, going forward, will the Ministry make available the additional lines which appear to make the case moot? That is the first question I have. The second is, in the job creation data that is in Table 2, broken up by sectors, it is clear that the services industry, particularly, has been a very strong engine of job creation. The services industry is a very diverse industry and I would like some clarity or granularity on these statistics here. Would the Minister be able to tell us at which part of the services industry is the greatest job creation because that might give us a sense as to how easily Singaporeans who are displaced from, for example, the manufacturing sector, can retrain and adapt themselves to the new opportunities?

Dr Ng Eng Hen: Sir, I thank Mr Iswaran for his views. He is quite right that a single ratio cannot encapsulate the economic reality of our job market. We would have to have a number of figures before we can do that.

In terms of more data, the point is that the information that I have given today may be new to some Members, but for those Members who had sat with me in the Job Task Force and the Economic Review Committee, we have gone through these figures many times. I have actually mentioned many of these figures in the House, maybe packaged differently, but perhaps it was less compelling because there was not a backdrop of controversy. So if there is any good, at least the controversy got us to focus on a few numbers, and we want to know the numbers very much more. The truth is that from day to day we are inundated with numbers. So I suspect that even though if I stood up and said these figures many months ago, many of you would have not even taken notice. But I take his point that we will try to do our public communications better and compel you to look at our figures. And the figures have been there. The resident unemployment rate, we said, has gone up. We have made no bones about the fact that foreign workers form a quarter of our population. Many Ministers have gone in public to say that there are 200,000 jobs excluding foreign workers, construction workers, and Singaporeans need to take back these jobs or take those jobs. These are not new facts.

As to breakdown of services, he can get the information publicly in terms of overall numbers. That is also available. But if Mr Iswaran would tell me what he wants, we will try to break it down for him so that it is simpler to understand and easier to encapsulate. But the information is there.

Mr Inderjit Singh: Sir, on the issue of the controversy, I would like to ask the Acting Minister, based on the data that is publicly available, would any researcher have made the same conclusion as the researchers from NTU made? Because I think the impact has been quite tremendous. People are now doubting both sets of numbers - the one that the researchers have given and the one that the Minister is giving us right now. My point is, based on the limited data that any researcher would have, would the conclusion had been the same?

Dr Ng Eng Hen: Sir, I have taken pains to show what data there is. I am not sure if Members have the time, but I welcome them to log on to our websites where all the data is deposited. The Advance Data Release document, census data, which I circulated for year 2000, if you look at that, it gives very clearly in absolute numbers what the resident population is, what the non-resident population is, from 1990 to 2000. So that is fairly clear. You do not need to do any derivation. The absolute numbers are there. But if you wanted a sectoral breakdown, here I am telling you a few statistical tricks, but if you wanted specific numbers of non-residents in goods and services producing industries, manufacturing, construction, etc, you can derive it. If you are an academic, you should be able to derive it. So in terms of 1990 to year 2000, we do. From time to time we also publish in terms of statements what the general numbers are. But all the overall numbers that you see, both in Table 1 and Table 2, are publicly available. The mistake was choosing the wrong data set. We have gone through that and there is no need to elaborate on that. So my short answer to Mr Inderjit Singh's question is that, at least for the overall numbers, you would be able to derive the same numbers that I am giving here.

Dr Wang Kai Yuen: To begin with, I would like to thank the Minister for giving a very comprehensive answer and giving us an opportunity to ask further question on his Ministerial Statement. I really do not want to make his job more difficult by exploring more the data, but since he has given the data in Table 2, I would like to draw his, and also fellow Members' attention to manufacturing. I am particularly perturbed by the figures. For instance, in year 1998, while there was a shrinkage, you see the locals shrunk by 19,000, foreigners shrunk by 7,000. In 1999, there was a growth and locals increased by 400, foreigners increased by 4,000. As you go down that column, you will notice a very distinct pattern and the conclusion I can draw will be very similar to what my fellow colleagues from the labour unions have pointed out, ie, Singaporeans seem to be the first to go, last to hire, in manufacturing.

If you look at manufacturing specifically, Sir, over the 5-year period, while there is a shrinkage for Singaporean locals of 28,000-29,000, there is actually a growth in the foreign workers by 11,900. So, contrary to our guidelines in foreign labour and quotas, it seems like in manufacturing the employers seem to have preference for foreigners. Could the Ministry of Manpower look at this further and see whether there should be some adjustments in our employment guidelines?

Dr Ng Eng Hen: Dr Wang is quite right. We have looked at that information. I need to point out to Members that manufacturing also includes the marine industry. And wherever it is, in manufacturing, we have been trying to get Singaporeans back to where there are jobs. In other words, where there are fewer jobs created, let us try to put them where the jobs are. I do not think that we want to put ourselves in the position of apportioning blame. In other words, is it because of employer preference, is it because Singaporeans do not want it, or is it because of our foreign policy. To me, I am trying to get workers into jobs. And when you finally deal with the problem, there is a sense of equanimity.

So, in the previous exercise, we find that a particular wafer-fab electronics factory went on a roadshow and, out of a few hundreds, finally they could manage just tens of Singaporeans who entered their workforce. What were the reasons? We will look into them. We will see how we can change mindsets. There are a number of reasons. Sometimes it is transport related, sometimes it is shift related. But, whatever the problems, we will have to solve them if we are going to bring down our unemployment. But this would be a targeted effort and I am glad that Members too now are aware of it. So if you have residents, for example, who live in particular parts of the island where there are factories, encourage them to go into these factories. We will facilitate. They can come to MOM, NTUC or Distributed Careerlink Network where we can train them. If they are willing to go into these industries, for example, either precision engineering, production industries, we will place them, we will sponsor their training and we will get them jobs.

Mr Iswaran: Mr Speaker, Sir, I am following up on my previous question to the Minister. On data disclosure, my point really is, why not take the guesswork out of this? Because the Minister's point was that data is available in different forms and different contexts and if you had induced or done extrapolation on the information to get the numbers, my point is, given the level of public interest in this matter and the Government's clear position that, in fact, the foreign worker policy is a very defensible one, why not come out with the data and publish it openly?

The second point on services industry, just to clarify, the services sector is a very diverse sector. What I want to understand better was since there is so much job creation, is it in the higher-end in terms of professional services, which would make it difficult for those displaced from the manufacturing sector, for example, to retrain themselves, or is there greater job creation at the middle to lower-end, where perhaps this kind of transition is more easily accomplished?

Dr Ng Eng Hen: Sir, my reply to Mr Iswaran is that we do provide the information, as I have said. We conform to certain standards, but it would be very difficult to provide information for a specific academic research. In other words, we conform to a benchmark and on an overall standard we are ahead of the benchmark in terms of, as we said, access, periodicity and the comprehensiveness in terms of our information. We have said that the exact foreign worker numbers are sensitive and we continue to maintain that. I think it is to our interest to keep it that way. But, whether we will put out more timely and more figures, I think we will consider it.

In terms of jobs in the services industry, let me give you a smattering of jobs that are available now. There are 7,300 jobs available in the following areas and I will give you the numbers so that you will have a sense of where the jobs are. Out of the 7,300 jobs, 1,400 in wholesale and retail; 1,200 in community, social and personal services; 1,100 in business and real estates; 1,600 in financial services; 1,500 in transport, storage and communications; and 700 in hotels and restaurants. And, yes, there are 800 jobs also in construction.

Dr Amy Khor Lean Suan: I would like to thank the Minister for his very detailed and patient reply to our questions. But just to clear any doubts that the public and, including myself, may have regarding this recent controversy about ratios, I would like to clarify with the Minister if I am right to say now that what the NTU professors and the Ministry said about data not being available for them to make conclusions about the local and foreign ratio is incorrect because this information, as you have said, is publicly available.

Dr Ng Eng Hen: I had wanted not to focus on it, but let me elaborate just a little bit. What you can get from public information is the overall number and the shifts in pattern within a sector. Overall numbers are quite easily clear. What you cannot get is the breakdown in foreign and local numbers. And the reason is that if you can get a breakdown in local numbers then you can by deduction get it in foreign numbers, except for the document that I have distributed, in the year 2000, where we give it specifically. So, in other words, we will not give you annual data, we may give every five years, every 10 years. So that is the position. The first mistake was actually the overall numbers. Because they had used a different data set and the data set does not allow you the sensitivity to even arrive at the overall numbers. So that is one of choice, that is not one of our omission. That is really their commission where they chose the wrong data set.

The second mistake was to actually try to derive the numbers when someone tells you that you cannot derive the numbers. We had made it so and, in fact, my officers were just following policies. Our statisticians are quite smart at it. But if you are calculating flow, if you are off by 10,000-20,000, it makes a big difference into ratios. But the point is this. If you want to answer the question, why are we having unemployment problems, ratios would not give you the answers. It cannot be. What difference does it make? In 1993 to 1997, more jobs went to foreigners than Singaporeans. But what of it? We created 100,000 jobs a year, 3 jobs to every Singaporeans that entered the workforce. So Singaporeans did not care and in fact were happy. Without the foreign workers, our wages would have gone up, our business would have stifled, our economy would have grown less than what we did. So, in the first place, it is the wrong point to stare at, the wrong point to begin. Having started there and if you want to continue this road, carry on. But for me, the emphasis is very clear - get to the fundamentals, restructure, get back the jobs. That is where the answer lies.

Mr Low Thia Khiang: Sir, I disagree with the Minister that ratio is the wrong point to begin with. I think it is the correct point to begin with at this point in time. That is why the Minister has to answer questions in Parliament today.

Sir, I have to admit that there are too many figures for me today. But for this exercise to be effective, I think it is important that people ought to understand how these figures were derived. I am sure he has looked at the Table presented by the NTU economists which shows completely different figures from what he has just presented to this House. For example, for the period 1992-1997, overall employment, the NTU economists' figure is 254,000 but the Minister's figure is 474,800. Increase in resident employment, the NTU economists' figure is 205,000 but the Minister's figure is 183,000. Overall, for non-residents, it is contrastingly different, 49,000, as what the NTU economists have asserted, and 291,000 as what the Minister said.

The figure is for the period from 1998 to 2002, but the NTU economists' figure is from 1997 to 2002. I do not know whether there is a difference between the years 1997 and 1998. I presume it may not make much difference. For the years between 1997 and 2002, increase in employment, the overall figures are 102,000 and 187,000 as presented by the Minister and NTU economists. But the figure for resident employment is 46,750 as against 93,100 between NTU economists and the Minister's figures. For foreign worker employment, the NTU economists' figure is 140,000 and the Minister's figure is 8,900. The question is how were these figures derived. As has been explained, the NTU economists used the wrong set of data. But in the minds of the public, they want to know what went wrong, and how do we know that the figures presented by the Minister are correct. This is for Table 1.

If we look at Table 2, it only gives very broad categories of industries. I think it is meaningful for the Minister to answer point by point and say how these figures were derived compared to the figures of the NTU economists, why his figures are correct whereas the figures of the NTU economists are not correct.

On the other hand, I think it would be useful for Singaporeans to know the figures. I am sure it will not compromise our national interests if detailed employment information is released to the public. For instance, give us more details for the various sectors, the number of foreigners and locals who are employed in a particular sector, so that Singaporeans will have a better idea of the true facts. Of course, when we have full employment and a tight labour market, people do not care how many foreign workers are there. They have jobs. But now people do not have jobs. So, to convince Singaporeans, I think it is important that the Minister releases those figures.

Dr Ng Eng Hen: Sir, when Mr Low Thia Khiang says that there is not much difference between 187,000 and 102,000, that is a sure sign that we have been inundated with numbers. I have said that they started at the wrong point. I am not sure how giving more figures will solve our unemployment problems. It is as though if I gave him a sectoral breakdown, tomorrow the unemployment rate will go down. But I take his point. So, if Members want me to spend time telling them how we derived these figures, we could do that. I could get my statisticians to explain to Members how these numbers are derived, what our figures are, and we will invite Mr Low and whoever wants to come along and we will tell them what the numbers are.

How do Singaporeans know that the figures are true? That is a difficult one. How do I know that there are X number of births? I have not seen them. But the point is that we stand by our veracity. We are trying to solve the problems and we are internally consistent. We can check across information that we give from time to time. Our job is to try and solve the unemployment problem. And when these figures come up, it is unnecessary distraction, but we have to solve the real problem. If it satisfies the Member to know how we derived the numbers, we can easily arrange for sessions where the statisticians can show him our data set and within the confines possible that I have produced today, we will show him how these numbers are derived.

Mr Low has asked for clarifications on how the NTU report went wrong. Let me go into the details. The NTU professors started by using the wrong data set. This was a Labour Force Survey Report. If Members have time, please log on to the MOM website and there is a Labour Force Survey Report. This Report is not the first publication. It is a well-known report that started in 1976. The latest publication is the 24th publication. So the limitations are well known. In the second page, in terms of methodology, all the classes that are omitted are based on households and therefore it does not include construction, those who stay on offshore islands, seamen, etc. So there are limitations to the data set and it is clearly stated that the numbers are of a certain level of sensitivity.

For the layman to arrive at certain conclusions and say, "Well, this is what your report says. You gave me that information." I take it, but I do not expect the same kind of naivety from academic dons. In other words, if they wanted the overall numbers, they should not have gone to the Labour Force Survey Report. They could have used the employment data, another data set which actually gives the numbers and they can calculate that from those numbers.

The second mistake was to try to derive the local and foreign share. What they did was from the Labour Force Survey Report, they calculated the employment change by using decimals. Let us say we have 1 million workers and we print the unemployment change figure as 1.2%, it is 12,000. But we round up the figure because we do not want the sensitivity. So it could have been 1.15% or 1.24%. If we are calculating stock, it does not make a difference. But the NTU dons were calculating flow shifts - small numbers, even for 10,000, if there was a shift of a flow of 30,000, it is a 30% difference. Again, if some Members of this House make that mistake, I think it is forgivable, but less so when you are an academic don. I am not sure whether that satisfies the Member and whether he wants more clarification, but I am quite open to give him more information.

The Deputy Prime Minister and Minister for Finance (Mr Lee Hsien Loong): They were wrong.

Dr Ng Eng Hen: And, of course, as DPM reminds me, they have admitted that they were wrong. They have said that they used inappropriate data, that they misjudged the error of sensitivities which brought them to wrong conclusions. So I am not sure why the Member wants to play up or show their mistakes upfront. I have said that it really does not matter from the point of view that they have made a mistake. If people doubt our figures after all this explanation, if they still doubt, there is very little I can do. But I know what I can do. I can try to bring jobs back, and this is what I will do.