Experts Say Increasing S Pass & E Pass Salary Criteria Might ‘Impede Recovery’

Yesterday, the Singapore authorities announced a piece of news that will make Singaporeans cheer.

The longstanding complaint among Singaporeans is that it’s cheaper for companies to hire foreign talents.

They don’t have to pay CPF and the foreign talents are willing to take lower pay because, well, their families might be living in countries with a lower standard of living.

So what the government essentially did is to make it more expensive to get a foreign talent.

Currently, S Pass needs a minimum of $2,400 monthly salary (with quota) and E Pass needs a minimum of $3,900 monthly salary (without quota).

While the amount of increase isn’t revealed, Manpower Minister Josephine Teo explained that this will discourage employers from looking elsewhere and finding their talents from Singapore instead.

It’ll Probably Work But Will Have Less Impact

As per their usual SOP, Straits Times went around to ask for opinions from experts in Singapore regarding the government’s latest move.

The chief executive of the Singapore Business Federation, Mr Ho Meng Kit, said that this move will force employers in Singapore to hire more locals.

That’s because, given the current economic climate, businesses can’t afford the extra cost, nor can they increase the price of their goods and services because everyone in Singapore is struggling right now.

But is it effective?

Apparently not, according to Singapore National Employers Federation executive director Sim Gim Guan because nobody is looking to hire any EP or S Pass holders right now anyway.

After all, the Jobs Growth Incentive only applies to new local hires.

In fact, he believes that the changes should take place gradually instead of immediately because currently-hired work pass holders might have taken a wage cut due to Covid-19.

It wasn’t made clear if the requirements apply to existing work pass holders or simply new ones.

Singaporeans Don’t Want To Take Up Certain Jobs

It’s not just the F&B, construction or cleaning industries that Singaporeans do not want to join.

Manufacturing is another sector that is quite unpopular with Singaporeans.

According to a TODAY article, there are 6,300 vacancies in Singapore’s manufacturing industry, including both full-time positions and traineeships.

More than 80% of the vacancies are for Professionals, Managers, Executives and Technicians (PMETs).

Yet based on MOM’s (limited) data, only a small fraction of them are being taken up.

Singapore Manufacturing Federation president Douglas Foo said that members (of the federation) are unsure if locals will take up the jobs even if they’re offered.

In order for the hike in e-pass and s-pass salaries to work, Singaporeans must also do their part.

“Our local manpower must continually accept the challenge to retrain and upskill so as to be ready for a new normal in these times.”

Increasing S Pass & E Pass Salary Criteria Might ‘Impede Recovery’

No matter what, whether companies hire S Pass or E Pass now, or later, this move will increase business costs in the “long-run”, Maybank Kim Eng senior economist Chua Hak Bin said.

This could affect the recovery for businesses here, he added.

President of the Association of Small and Medium Enterprises Kurt Wee said that businesses here have been facing a “very tightened” foreign workforce landscape since “eight to nine years ago”.

He pointed out that the policy could risk being too protectionist and affect the “longer-term resilience and competitiveness” of our local workforce.

In short, he’s saying that competition breeds competency, and with lesser competition, Singaporeans could become less competitive in this global world.

Tough love? Maybe.

Previously, when Manpower minister announced the upcoming change, she said that while Singapore “must remain open to the world”, they must also ensure that employers must also be “fair” in treating Singaporeans.

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