Professionalize all trades, remove the PMET classification: head of the MAS, Political News & Top Stories

SINGAPORE – To professionalize all jobs, start by removing the professional, managerial, executive and technical (PMET) job categories, urged the head of Singapore’s central bank on Thursday (July 22).

“If we can’t abolish it, at least remove the ‘P’ from the category: it suggests other jobs are unprofessional. We should question the principle that all Singaporeans should aim for jobs. PMET jobs, ”Singapore Managing Director Ravi Menon said.

Addressing the lingering stigma and low wages faced by traditional “blue-collar workers” such as plumbers and cleaners, he said people should question the principle that all Singaporeans should aim for jobs. PMET jobs.

“Any population would house a distribution of skills, requiring a diversity of paths that can lead to different types of excellence. To be an inclusive society, we must value social and professional skills as much as academic intelligence,” he said. said, citing how skilled trades in European countries provide a middle class way of life for many workers.

“These jobs confer dignity and social status. We need to do the same in Singapore.

He estimated that one in three low-wage service jobs are held by cheap foreign labor, a situation that “cannot be good” for local wages.

One way to solve this problem, he said, is to gradually reduce the inflow of low-skilled foreign labor over a few years. This will promote the adoption of technology, increase productivity and help maintain wage gains across a wider range of occupations.

“The demand for many domestic services like cleaning, maintenance and cooking is inelastic, and wages will have to rise if the number of foreign workers is reduced.

“Rising wages, coupled with improved working conditions and rewarding career prospects, should gradually attract Singaporeans to these domestic services.

Acknowledging that the transition from a low-wage economy to a high-wage economy will be difficult, he said that companies that are excessively dependent on low-cost labor will have to retire, there could be some consolidation in sectors such as retail and food and beverage. , and there could be local job losses in the initial phase.

Mr Menon had previously suggested increasing the minimum allowable wage for S Pass holders and Employment Pass (EP) holders over time, with the minimum allowable wage for S Pass holders being closer to monthly income. median, about $ 4,500.

S Pass holders currently earn at least $ 2,500 per month, with older and more experienced applicants needing higher salaries to qualify.

He said Thursday he was not suggesting that S Pass workers be drastically reduced.

MAS Director General Ravi Menon (left) and Straits Times Deputy Editor-in-Chief Chua Mui Hoong at the Institute of Policy Studies on July 22, 2021. PHOTO: INSTITUTE OF POLICY STUDIES

On the contrary, when S Pass holders are available in large numbers and paid about 30 percent less than locals, there are two possible effects: First, local wages are likely to be depressed; and second, some graduates of FIE and polytechnics may be eliminated from these jobs.

“Why not pay S Pass workers closer to the local median and let the market adjust the job profile? In some occupations we might see an increase in local employment at better wages; we will continue to employ S Pass holders, ”he said.

Education and healthcare in particular, he added, have the potential to grab local jobs at good wages.

According to MAS estimates, the two sectors have an elasticity of substitution of 1.5, the highest among service industries. This means that if the wages of foreign workers in health care or education increase by 10 percent, the demand for local workers as substitutes will increase by 15 percent.

“The key question for Singapore is: do we want a dual economy with high inequalities or a more inclusive society with higher wages but also higher costs? The Nordic countries impose strict limits on low-paid foreign workers, which has facilitated a more equitable distribution of income. , low unemployment and a sustained commitment to productivity and innovation.

“If Singapore is to be a little more like the Nordic countries, it is not only government policies that should be adjusted, but also the mindsets of businesses, citizens and workers. Businesses need to reduce their dependence on cheap labor; citizens must be prepared to pay more for better quality services; and workers must be open to a wider variety of jobs. “

During the question-and-answer session moderated by Chua Mui Hoong, Deputy Editor-in-Chief of The Straits Times, Menon said it was not always true that salary increases would push up cost structures, even if that is conventional wisdom. Singapore, for example, has already seen its costs rise but is still able to compete.

“If we look at the experience of advanced economies elsewhere, they pay their workers well and sell their products at higher prices, but are able to sell them because the quality is high.”

He warned, however, that the minimum wage should not be set too high as it could put some Singaporeans out of work.

“I’ll start with something lower. Look at how things go, see if we can handle the dislocations.

“Advertise this well in advance so companies can adapt – tell them, ‘Look, we don’t want you to lay off your employees, but improve your processes. Consolidate your operations, so that you can pay this minimum wage in a few years’. “

To ensure that workers have good jobs instead of entering the odd-job economy as their first choice, unemployment assistance is important, especially for older workers, he said.

“Their financial resources are limited, so they are in a hurry to find another job … they have fixed expenses which limit their mobility and flexibility.”

He cited Denmark as an example where people are not afraid to move from job to job because they have the time and support to learn and prepare for change.

The paradox is that government has to help people become self-reliant, and that’s why the old left-right ideological divide in policymaking doesn’t make sense, he said.

“The right says people should be self-reliant – if you take care of them they will become dependent. The left says” no, they can’t take care of themselves, you have to take care of them. ” endless and simplistic debate. Over the years, I have come to the conclusion that you cannot leave these things entirely on the market. “

The ideal, he said, is an inclusive, work-centered model where people have to help themselves, but which also provides safety nets in the form of state support. , community and employers.

“You need mechanisms to help you bounce back because these things (like job losses) happen.

“This is the kind of synthesis of the values ​​of trust and support (that we need). We cannot ignore the inequalities in our society. We cannot look the other way.”


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