One of the greatest phenomena of any given society is the ability of the human mind to get
past regulations and even to make money from the said regulations. In Singapore, this is most visible in hiring cheap labour from other parts of Asia.
Our situation is simple. Industries like shipping and construction depend on
cheap labour from other parts of Asia. However, a quota exists on how many labourers a company can hire. You can’t hire cheap labour from Asia unless you have hired a certain number of Singaporeans.
It sounds like the government is doing something to ensure the locals get the first job pick. To an extent, it works for small professional firms, which hire several locals before moving on to foreigners. However, it’s a different story regarding the shipping, construction and food industries. Many jobs in these industries are what you call “dangerous” and “dirty”, and locals, particularly young graduates, shun these jobs regardless of how much is on offer.
The quota system has created an industry where the industries that need foreign labour will make “CPF” contributions for local Singaporeans to ensure that they have a quota to
hire labourers willing to do these jobs. While technically illegal, it’s a money spinner for the government. The local phantom will inevitably have a higher tax bill (to avoid suspicion, one declares the phantom wage as tax – Singapore’s direct taxes being relatively low) and the CPF kitty, which the government controls, gets filled by workers who may not otherwise have CPF contributions.
However, you do get unscrupulous “entrepreneurs” who pay off the “phantom” workers but end up hitting the actual workers with fines and fees to an extent when the guys doing the actual work don’t get anything. Then, it reaches a point when the guys who have been screwed complain visibly, thus denting the clean image that the government likes to present:
When these things happen, the government will inevitably remind the rest of us not to sell
our CPF quota, and we are told that “phantom” workers are a social problem.
I will leave the phenomenon of hiring phantom locals to more intelligent people. I will, however, suggest that the government is focused on the wrong phantom worker problem. The serious phantom worker problem that we have in Singapore comes from what I call phantom workers receiving real salaries but real workers receiving phantom
salaries.
To be fair to the government, it’s not limited to the government only. You also get this situation in the private sector. I’m sure plenty of us have experienced that person who comes into work, plays with his phone for two hours and then leaves. Instead of wondering about that person’s value contribution, i.e., if he’s doing real work, the boss starts complaining that the other workers who are actually doing real work are not doing their part.
Ironically, it’s a situation where the guy playing with his phone earns more than the guy doing real work. This is what you might call a clear-cut case of the phantom worker earning a real salary but the real worker earning a phantom salary (defined as just enough to meet legal requirements without taking living expenses or contributions to the company into consideration).
Unfortunately, this isn’t something limited to quirky companies in the private sector. If you look at this syndrome, one is bound to suspect that the phantom worker issue goes far deeper than that.
Let’s start with the fact that two-thirds of the population were earning below the statistical median wage for the longest of times. Wages at the lower end of the scale were pretty low, and whenever people said anything about it, the standard reply was that the workers needed to become more productive.
Your hawker centre aunty, for example, earns around $1,400 a month (before the CPF deduction, which is considered as close to a minimum wage as it gets in Singapore). Nobody doubts that the hawker centre aunty is a real worker doing real work (you
see your tables being wiped and your dirty dishes getting collected). Yet, should your hawker centre aunty find it hard to get buy on S$1,400 a month and ask for S$1,401, she will undoubtedly be scolded in the national media for not being more productive and upgrading herself. This a classic example of a real worker earning a phantom wage.
However, if you look at the government, you can’t help but feel that we have plenty of phantom workers earning real wages. We have, for example, five mayors earning, on average, S$600,000 a year. Their wages are not exactly phantom-like. However, what exactly is the work that they do?
If you think about it, Singapore itself is a city. In most nations, any city’s mayor does the actual work of running the city, as our Prime Minister does. However, that’s not exactly the case in Singapore. Our “Mayors” run councils of several constituencies by members of parliament (MP).
We have a case of a job which is, to all intents and purposes, a “phantom.” However, the wages are not. Why do we need phantom workers earning real salaries? The purpose of a phantom is phantom, and their wages should match.
We are constantly reminded that Singapore is a small place with no resources and must conserve what little we have. Surely, addressing the issue of why phantom workers are earning real salaries and real workers are earning phantom salaries is a key part of doing this.
A version of this article first appeared at beautifullyincoherent.blogspot.com