SMRT– And By Extension Singapore– On Steroids

I didn’t know it was this bad.

Apparently SMRT imports foreign drivers from China by the busload on 2-year contracts, houses them 8-to-a-room in worker dormitories and provides buses to ferry them to and from their depots at the start and end of their shifts.

At the end of two years, these workers are presumably flown back to China if their contracts are not renewed.

If I didn’t know better, I’d say this was a military-like operation and the workers are just numbers in a computer scheduling system, to be moved by the system as it sees fit. It reminds me of my Army days, where I was provided food and shelter in military camps, driven in 3-tonners to my place of ‘work’, and returned to my bunk at the end of the work day.

Though hopefully the SMRT drivers don’t have to endure the weekly ‘stand-by bed’ that I had to endure over 20 years ago.

I really didn’t it know was this bad.

I had imagined that the PRC drivers I met were here on their own volition, that they might have rented rooms in HDB flats using their own pay, and that they were employed individually by SMRT (and SBS), not en-masse.

How mistaken I was!

I now see that we are short of thousands and thousands of workers in the transport industry. The same goes for the F&B industry (where we see lots of Pinoys waiters and bartenders), IT industry (full of Indians), maids (Indo, Filipino girls), construction and heavy industry (full of Bangladeshis and Indians), call centre industry (mainly Pinoy girls) and other less glamourous industries.

How many hundreds or thousands of dormitories are there in Singapore to house all these (transient) foreign workers? More importantly, how long can Singapore survive like this?

Allowing SMRT to hire thousands of foreign workers on contract is the equivalent of running SMRT on steroids. The cheap labour fuels SMRT’s short-term profits, but has debilitating long-term effects, like all performance-enhancing drugs.

With cheap contract labour, there is no incentive for SMRT to increase productivity and no reason for SMRT to invest in employee development. It drives down the pay of all bus drivers. Contract staff feel treated badly, like the lowest form of intelligent life in the SMRT food chain. Resentment and unhappiness builds, which culminated into a strike last week. Meanwhile, the company can make huge profits because of access to a cheap labour pool, thus management pats itself on its back and pays itself huge bonuses.

But is this sustainable? The biggest risk is that the flow of cheap labour can be turned off very suddenly and SMRT (and other companies) will not be able to cope in time.

We’re already seeing this in the employment of maids, where both the Filipino and Indonesian govts have recently enacted regulations to disallow their workers from bearing the agent placement fees (typically $2-3,000), increase their minimum monthly pay (minimum $500 now), stipuate the minimum no of days off, etc. to better their work conditions and welfare.

As a result, new maids have suddenly become expensive to hire and some families are now stuck. Their working hours don’t allow them to easily do without a maid, and now they suddenly face huge increases in their maid costs.

What if this happens to SMRT or SBS? Or to other industries? Will Singapore be able to cope? Is SMRT prepared to double the pay of bus drivers overnight? Can our IT shops cope? Etc.

Why is it that in Europe or America there are natives willing to drive buses, wait tables, work as au pairs, do roadworks and construction— but not here? How come they can provide world-class train and bus services that run on schedule, provide good restaurant services etc, without relying on transient foreign workers?

Why can’t we do it?

In the US, I often see young Americans waiting tables, but I rarely see young Singaporeans doing that here. Why?

If we can’t get Singaporeans to do even the ‘light’ jobs (like waiting tables or bartending), what hope is there of getting them to do the heavy jobs, like construction or road-building?

Can we rely on transient foreign workers forever?


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10 Responses to SMRT– And By Extension Singapore– On Steroids

  1. creamsical says:

    Re can we rely on transient foreign workers forever?

    Well, that has been the plan. Then when one source dries
    up, you turn to another. The trick is to keep ahead of others,
    as when they pogress and it becomes not worth their while to
    come out to work in Singapore.

    Hence, growth at all costs. And that includes the heavy social
    costs on Sporeans, and the physical and emotional costs on
    the foreigners. All those don’t have a $ price put on them tho.

    I mean, how much do I need to pay for you to swallow/put up
    with your unhappiness for crowds, high prices of everything,
    etc? Let me count the ways I can persuade you to do so.

    Amazing how eye-opening a simple sit-in can be, isn’t it?

  2. Unconvinced says:

    This is what happens when the government abandoned the high wage policy in the early 1980s and when the government pursued growth at all costs. It is much more difficult to make high wage and targeted growth policies work but if you do, the growth is more sustainable. But despite having total control, the government chose the easier option. Why they did this is anybody’s guess. Perhaps, they are not as wise as they claimed; perhaps, they are self-serving; or perhaps, they simply do not have the guts to take real medicine.

    • Thanks for comments. Personally, I think the PAP did it deliberately.

      I think they really believed that Singapore does not have enough critical mass to play in certain sectors, such as IT, and so they opened the floodgates to anyone who could program a computer.

      In the same vein, they opened the gate for low-end workers like construction workers, waiters and other staff simply because there aren’t enough Singaporeans willing to take those jobs, even if the pay is higher. Singapore does indeed have as population problem, and the Govt would prefer Singaporeans to go to higher value-added jobs if possible.

      • creamsical says:

        Agreed that Sporeans wont take up the jobs in the 2 areas you name.
        However, the higher value added jobs are not being given to them.
        Also the phenomenal increase in worker intake from abroad has been
        done in too short a time.

  3. Facts says:

    As Paul Krugman said “Singapore’s growth has been based largely on one-time changes in behavior that cannot be repeated. Over the past generation the percentage of people employed has almost doubled; it cannot double again”
    That we are sitting on a bubble is obvious, however the government has always relied on “cheap labour” for growth. That’s why we need a 6 million population consisting of 4 million cheap talent from overseas

    • It is the Asian way. Cheap labour is how China became the world’s factory. To be in Asia, with access to cheap labour and not use it, is kind of dumb.

      Notwithstanding this, he is right that we can’t depend on cheap labour forever. Even China factories are running out of cheap labour. Hopefully the Govt has a long-term plan to wean us off cheap labour.

      But the sheer scale of it– hundreds if not thousands of dormitories harbouring all these cheap labour– I just never saw it that way till now.

  4. henry says:

    Yes, agree that the pursuit for high growth via high import of workers is deliberate. Its the scale of the effects that seems to befuddle them. The recent episode within SMRT is but a sample.
    The way SMRT or any other large corporation that uses cheap ( free) labour reminds me of Nazi style production.

    Cheap is relative and, yes it cannot last forever. But it can last for more than 50 years! We have not arrived there yet, so the music plays on.
    It is also true that our own population will not be able to produce sufficient numbers to run essential services. But that means we have to think of ways to improve productivity. To construct a building with less manpower, to maintain drainage with less surveillance.

    The current state of thinking only reflects how lazy senior management is. Really lazy for their level of pay, education and status. Cutting cost is such a simple solution that aunties and uncles do everyday, and they do it without a Harvard degree.

    We could not detect the laziness till we ask the questions, and I thank you for yours!

  5. DooBWah says:

    Don’t you see? The PAP govt is deliberately importing cheap foreign labour to boost property rents which in turn boosts value hence the emergence of $1mil HDB flats. The unfettered influx of cheap foreign labour act as a drug for Singapore businesses from SMEs to ‘too big to fail’ corporations like SMRT, ensuring Singapore WILL be dependent on foreigners because in years to come there won’t even be Singaporeans available in those fields.

  6. JG says:

    Unlike some of the comments, I do not think there is any ill intention, per se. Instead, I think the problem is “growth at all costs”. I think the problem all along existed in a low-level form, but got accelerated in the last 5-8 years under LHL’s era. The Govt got enamored with this India-China thing, that the centre of gravity of world economy is coming back to Asia after having been centred in the West for the last 200 years. Its an unprecendented opportunity. They said “it would be stupid” of us to forgo the opportunities this brings. Hence, the decision to open the tap.

    Couple that with a KPI driven system and a bonus system that measures GDP growth and you essentially have a sub-prime crisis type situation. Prior to the financial crisis, Western banks’ earnings were driven by a “short-cut”, ie. originating and selling sub-prime CDOs. A short cut to ginning up profits. Similarly, Singapore too succumbed to its equivalent here — pump priming the economy with huge influx of foreign labor. Economics 101 says that GDP output is a function of capital, labor, technology. You pump prime labor and you gin up GDP. We are in a hurry to grow, to grasp the unprecedented opportunities available!!!

    Numerous Cassandras sounded warning signals. 10-20 years back, Nobel laureatte Paul Krugman warned Singapore that our miracle is essentially pump primped with capital and labor – not sustainable. He was pooh-poohed. Some MPs did warn the Govt that we’re overdoing it – instead, Ministers denied a problem existed. PM : We DIDN’T grow at all costs. PM : We WERE ready. We didn’t bring in hoardes of people before our infrastructure was ready. You can get on the MRT if you want to – its a question of whether you want to. There’s enough flats and they are affordable – just that you people are too choosy.

    It took GE2010 to give a big kick in the Govt’s butt. And only then, did they START dealing with the aftermath. It will take Wall Street years to clean up the excesses of the subprime bubble – witness Citibank just announcing more job cuts this week and look at its share price today vs 10 years ago.

    Similarly, it will take years for us to clean up our aftermath too. The problem is that :
    (1) the Govt essentially still believes that the problem is really one of COMMUNICATION rather than wrong strategy. So just “finetuning”, no major change.
    (2) Short-cut to growth is addictive – very hard to put down. You need will power. Like withdrawing from drugs. I remembered LKY/GKS doing precisely that and in one swipe, garment manufacturing goes out of Singapore in the 1970’s./80’s. Our current leaders are not of the same breed. Its just “finetuning”.
    (3) Once you jump on this escallator, you cannot get out. Why? Population time bomb. LHL alluded to it recently, saying he wished that in 1994, he’d started stressing this problem hard enough, so that people will accept the need for foreigners. Actually, he got it wrong, and Lucky Tan got it right. Once you take in say, 800,000 new citizens in their 20’s/30’s, in 20-30 years time, they will add to a bubble of aging pool. So you create a “bubble” of problem 20-30 years down the road. You can’t gin up birth rates overnight. So you now got to take in another “bubble” of young new citizens to offset that bubble of old citizens. In other words, you’re addicted and you can never get out, much as you want to.
    Our current leaders lack wisdom and foresight. Its a disservice to the strong foundation our forefathers handed to them.

  7. Pingback: Weekly Round Up: Week 49 (3 Dec – 7 Dec 2012) | The Singapore Daily

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