Raising Foreigner White Collar Employment Salaries Thresholds means??

It basically means that the entire foreigner vs local employment game remains the SAME.

Check out the pre-election 'good news'!

• TODAYonline - EP, S Pass salary thresholds to be raised
• Business Times - Bar raised for white-collar foreigners - This one especially, sounds really good for locals, right?!

Basically, the minimum salaries of the foreigners on employment pass are raised. Minister of Manpower, Gan Kim Yong, reasons as such:

• This will improve the profile of the local workforce
• This will encourage companies to hire more qualified foreigners 

Hmmm... Sounds somewhat logical... Yet, it's not entirely convincing... Just can't place our finger on what exactly this all means... Wait a minute!!

Employment passes are for tertiary-educated foreigners (e.g. CEOs, middle managers, fresh grad executives etc), while work permits are for the blue collar foreigners (construction workers, maids, factory workers, waitresses etc). In between the Employment Passes and Work Permits, there is a Technician category called 'S Pass' (which is often abused by employers and employees, but that's an entirely different story.)

In the current budget, MOM has basically raised the minimum cost of hiring of foreigners at all levels. For work permits, the levy has been raised. For employment passes and S Pass, the minimum starting pay for each category is raised as follows:

How can nothing much has changed when the government really did raise the salary thresholds for foreigners?

(A) The Impact of Higher Foreigners Salary Bases on Foreigners and Locals
The new increases in minimum Employment Pass salaries range from S$300 to S$1000, or 12% - 14% of the minimum salaries of white collar foreigners.

Does this now mean that employers will now hire a local white collar, instead of a foreigner because the local is 'cheaper'?


Or does it mean that employers will simply pay the foreigners more?

Or do the increases merely reflect the actual increases in these foreigners salaries in Singapore?

We are unable to know for sure, because we do not have access to such information. However, we can be observant about how ever little is made available to us.

Remember earlier that 1 in 2 EXPATS in Singapore makes more than US$200,000 (S$265,000) annually. This is the highest ratio for expats in the world. This means majority of foreigners are not gonna be affected by this latest so-called in Employment Pass policy at all.

In any case, it is logical to assume that the starting pay of a foreigner fresh grad in SG easily crosses the S$2800 mark to begin with. (He has to pay for rent, food, transport etc, while he is in SG.)

This also means that for a local fresh grad to be hired, instead of a foreigner fresh grad, the employer (still subscribing to 'Foreign = Talent' and FTs hire FTs), is incentivised to suppress the starting pay of a local fresh grad.

(B) Lack of Control of QUALITY and QUANTITY of Foreigner Employment
MOM and Minister Gan Kim Yong ensure that there is NO QUOTA on how many FTs can be employed by any employers in Singapore.

Minister Gan does not deny in Parliament that there is "almost unrestricted access" to foreigners on Employment Pass status as long as the company is prepared to hire them.

In other words, MOM and Minister Gan do not decide on the quality of foreigners on employment passes. Instead, the hiring managers in these companies are making the ultimate decision of WHICH and HOW MANY foreigners are coming to work in Singapore. In simple terms, if the hiring manager decides to hire all foreigners only, nothing in our laws/policies will stop him.

Also, even with the raised salary thresholds, if the foreign hire does not meet the new P1 minimum salary, he can simply be employed under P2. If not, just employ him under Q1. These Employment Pass categories are a farce, when there is no limit to the number of foreigners to be hired under any of these categories.

And not forgetting, these Employment Pass holders are offered Permanent Residency soon after working in Singapore (can be within 2 years, I read?). Once they accept PR-ship, they are no longer bound by the minimum salaries of Employment Passes, and can compete with Singaporeans by being cheaper. In fact, these PRs can be jobless in Singapore, living off rental income or savings.

You may ask why MOM is hesitant to openly, decisively and really limit the number of Employment Passes in each category. It's all very simple.

These foreigners' salaries make up about 20% of the Singapore GDP.
Quick estimation:
Conservative average S$200k package per annum for 300k non-Singaporean white collars in Singapore.
These salaries come up to S$60BILLION per annum.
Meanwhile, Singapore GDP 2010 = S$300BILLION.

To further entrench this trend, politicians and top civil servants' bonuses are GDP-linked, i.e. they are incentivised to recommend and make GDP-growing public policy decisions. Therefore, to these decision-makers,

More Foreigners = More Bonuses, More Rental Income etc 

= More Wealth

(C) "FTs hiring FTs"
MOM and Minister Gan Kim Yong are still not doing anything to prevent 'employment enclaves' by foreigners in Singapore.

Of course, there is no mention of SINGAPOREANS FIRST.

Instead, Minister Gan reminds everyone repeatedly of the 'maxim' that More Foreign Talents = Bigger Economic Pie = Everyone will have bigger share.

However, what Minister Gan does not tell everyone is:

• HOW this wonderfully bigger pie is shared amongst Singaporeans, i.e. which class of Singaporeans benefit the most from this bigger pie.
• Similarly, WHO bears the most costs of overcrowding of public facilities (transport, healthcare etc), inflation of everyday products (food, property, tranport etc), lost education/employment/promotion opportunities etc.

Same presentation of half-truths as demonstrated in the 'Our Education System is the best for Social Mobility' argument.
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In summary, the new budget ensures that the foreigners vs locals employment game remains still largely the same.