Mr Chua Kheng Wee Louis: Chairman, employers of work permit holders have been sounding the alarm bells on surging costs of workers’ accommodation. Ministry statistics show that median monthly rentals for a bed hit $420 at the start of last year, up from $280 four years before. That is an 11% annual inflation rate, which is not entirely unexpected given the number of migrant workers in the construction, marine and process sectors is 18% above pre-COVID-19 levels and at the highest for all the years MOM has published statistics for.
In the 2010 Construction Productivity Roadmap, the Government set a 20% to 30% improvement in site productivity by 2020. The final outcome was 19.5% in the decade past. I understand that there have been no new targets since with the only productivity related target being the design for manufacturing and assembly adoption in the 2023 Built Environment Industry Transformation Map. But this is a target for process adoption rather than a target for productivity outcomes per se.
A meaningful target is important because it helps us understand how much we can raise productivity before we need to increase capacity for workers.
Conversely, if in the meantime, we are unable to increase productivity and reduce manpower reliance as fast as we would like, we need to ensure that companies are able to access adequate accommodation at reasonable standards and prices so as not to have soaring costs passed through to end consumers eventually, which appears to be what is going on now.
The MOM shared that migrant workers’ numbers cannot keep rising and hence the Government should also look to organic ways of retaining talent among work permit holders, which would also improve productivity. One way is to reduce repatriation of workers who have years of experience here. There are workers who are already socially integrated and have picked up English or even Mandarin during their stay. Workers who are more familiar with Singapore’s work practices can hit the ground running without needing training from scratch.
Currently, workers can only obtain a new job without their current employer’s consent during the 14- to 21-day window before the work permit expires, meaning the employers who anti-competitively want to prevent other companies from hiring their workers in future and for long period to block them from doing so. Qatar has a 90-day grace period after the expiry of a permit during which a worker can change jobs without employers’ permission.
We should look to tilt the balance of power to the worker because this is healthy for the industry and workforce.
The Senior Minister of State for Manpower (Dr Koh Poh Koon): Mr Louis Chua mentioned the need to ensure that companies are able to access adequate accommodation at reasonable standards and prices. Pre-COVID-19, the number of dormitory beds available was sized to adequately meet the demand, with a healthy 90% occupancy rate. When the economy reopened after COVID-19, employers were desperate to catch up on projects that were delayed by COVID-19 and have been hiring more migrant workers.
Today, the number of Work Permit holders in the construction, marine and process sectors is 20% higher than pre-COVID-19 days. This led to a market-induced relative shortage of dormitory beds.
MOM has been working closely with key stakeholders to make more dormitory beds available to accommodate this growth, while ensuring they meet MOM’s dormitory standards. Since December 2022, 17,000 more dormitory beds have been added through various measures. About 47,000 more will be available over the next few years, as seven more purpose-built dormitories come into operation.
These measures have helped to alleviate pressure on the broader housing market and rental prices. However, the growth in the migrant worker population has outpaced the increase in dormitory supply.
It is not sustainable to keep building migrant worker dormitories or adding more beds to house new workers, because when the catch-up projects are eventually completed and the excess workers return to their home countries, we may end up swinging to the other extreme and end up with an excess of dormitory beds.
Thus, the more sustainable way forward is for employers to reduce their reliance on migrant workers by adopting productivity measures. I am glad Mr Louis Chua agrees with us that this is the right thing to do. This is why we have the Skills Recognition Framework in place, which encourages employers to retain experienced and skilled Work Permit holders through lower levies.
Ministry of Manpower
4 March 2024
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=budget-2369
Office of the Leader of the Opposition 