COS 2022: Clarifications on COMPASS and Low-wage Workers

MP Gerald Giam

Mr Gerald Giam Yean Song (Aljunied): Sir, I have clarifications on COMPASS and the low-wage workers.

Will the shortage occupation list factor in both occupation and industry? For example, we may have a shortage of software developers in general, but not necessarily software developers in the financial services industry. And if such a distinction by industry is not made, MOM might be making it easier for companies like banks to hire foreigners without necessarily improving the opportunities for talented Singaporeans?

Secondly, does MOM already use the COMPASS framework internally for evaluating EP applications? If so, does the Minister expect that the outcomes in terms of the foreign-local talent mix in companies to remain largely unchanged, moving forward?

On the national diversity attribute of COMPASS, can I understand if MOM sees some concentration risk in having too high a percentage of any one foreign nationality in a firm? If not, what is the policy intent of this criterion?

And lastly, on the wages of low-wage workers, I know that by 2023 about 6% of full-time, low-wage workers will still not be covered by the PWM. Who are most of the workers in this group and does MOM intend to eventually extend PWM to all of them so that every Singaporean would be able to receive a decent minimum wage on their work?

12.15 pm

Dr Tan See Leng: Let me try to categorise Mr Gerald Giam’s questions. I think to his first point in terms of whether COMPASS was from the FCF. COMPASS has actually taken into consideration the many months of data analytics, in terms of the hiring patterns, based on diversity, based on qualifications, salaries and also the concentration of PMETs within the firm, to come up with a fairly nuanced framework.

The fact that the vast majority of the companies actually passed when we put them through the COMPASS framework is actually a testimony to the fact that many companies for the past many years have been very progressive, very responsive and very nimble to the needs of our economy.

12.15 pm

As far as the diversity itself is concerned, it is a function also of the ability of the company to access the skill sets based on the individual sector. So, let me put it across in a perhaps, in a more illustrative way. For those that are in IT, particularly when you deal with a lot of cybersecurity, artificial intelligence and very advanced deep machine learning, even with deep-tech itself, depending on the sources where this group of skill sets are developed, you are not able to completely assume that you are able to get these skill sets from all around the world. Hence, we designed it to be such that in those areas that we have shortage of, and the fact that when we decided to pivot into the Industry 4.0 roadmap, we therefore needed to complement these gaps. So, when we took all these into account, we felt that this is what is needed for our economy to get to the next step. 

The exact details, going into the granularity of why we want to do the cut-off at the various benchmarks, I think I have already explained it before in my speech. I hope that sort of gives the Member some insights into the thinking behind it.

What was your third point?

Mr Gerald Giam Yean Song: My third point was asking about the national diversity criteria inside COMPASS. What was the thinking behind that? Is it because MOM sees certain concentration risks in having too many people, too many employees from one nationality in the organisation? If not, what is the reason for including that? 

 Dr Tan See Leng: The nationality diversity consideration was also the result of making sure that we diversify our risk in terms of our dependency on the source of talent itself. To a certain extent, it is also guided by the current pandemic that is still ongoing. When certain restrictions came about, we were not able to let this group of EP holders travel freely back to their home countries to visit their relatives and come back. So, taking all of these into consideration, taking into account our various needs, we came up with a very nuanced approach in terms of the framework.

In fact, there are many foreign media articles out there that claim that we have become extremely unattractive because of the fact that many of these EP holders could not come back. And actually, it is not because of the fact that we did not allow them to come back. It was just because of public health border controls that we were not able to bring them back here to work. So, with that, this framework, to a certain extent, was also influenced by that. 

The Chairman: Mr Zaqy Mohamad. 

Mr Zaqy Mohamad: I thank the Member for his question on lower-wage workers and recognising that the Government has worked hard to cover 94% of our lower-wage workers with our progressive wage moves. On his question on the remaining 6% of lower-wage workers not covered, what their profiles are like. Actually, for the majority of them, they are already earning $1,400 and above. I think more than half are earning $1,400 and above, even though they are not covered by progressive wage moves, they are already earning that. But the question would more be, what are the exclusions and why did we exclude this group. But really, if you look at most minimum wage systems around the world, there are exclusions. In our case, we found that many of them are actually small businesses with less than 10 persons and most of these are actually micro-SMEs in your heartlands, typically your mom-and-pop shops.

What we can we all do? Well, in our estates, I think we probably know many of them, mom-and-pop shops who employ their own family members sometimes to help them out and one way we could do is to support in our Progressive Wage Mark. I hope that in Aljunied and Sengkang, you can also encourage many of these merchants, mom-and-pop shops to come on board the Progressive Wage Mark and say yes, please support and pay our workers more, and we will be happy to give you the Progressive Wage Mark if they do so.

These are ways in which I think there is moral suasion. But overall, if you look at where we are in terms of the kind of wage growth that you are expecting for the other PWMs shared here, ranging from fifty-plus percent to eighty-plus percent wage growth, for the vast majority of our lower-wage workers, that would also set the tone and drive competition in terms of the labour market at that level, and perhaps for such merchants, when they need to retain or pay their workers better, I think this is where their workers, too, will start comparing benchmarks in other sectors which are paying far better. 

So, to that extent, rest assured, for this set of workers, they will still get Workfare and other benefits, whether it is Silver Support and so forth. Back to your question, what are their profiles, they are typically your micro-SMEs in the heartlands and typically family businesses too.

7 March 2022
Ministry of Manpower

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