Population: Elemental considerations 2

In the executive summary of the Population White Paper and on page 32, it says:

By 2030, the number of Singaporeans in Professional, Managerial, Executive and Technical (PMET) jobs is expected to rise by nearly 50% to about 1.25 million compared to 850,000 today, while the number in non-PMET jobs is expected to fall by over 20% to 650,000 compared to 850,000 today. Overall, two-thirds of Singaporeans will hold PMET jobs in 2030, compared to about half today.

This is followed by a graphic that reinforces the above:

Then a link is made between importing lots of foreigners as a condition for achieving good jobs for Singaporeans. In other words, if you want the above-mentioned desirable outcome, then accept more foreigners. Still on page 32:

To create these high-value and good jobs for Singaporeans, we need to: Remain open and globally competitive to tap on Asia’s growth … and complement the Singaporean core with a foreign workforce.

I would caution that the White Paper uses the terms “Singapore citizens” and “Singaporeans” to mean those who hold a pink identity card at that point in time. The terms include newly naturalised citizens, and do not only mean native-born Singaporeans. The footnote in the graphic above — “Assumes current immigration rates” — should alert you to this.

The use of this PMET categorisation bothered me. It really didn’t tell me much unless I am prepared to accept some underlying assumptions:

Firstly, that there is a certain pyramidal hierarchy of jobs and PMET jobs sit above non-PMET jobs — the latter generally viewed as low-status manual work or having to serve (yes, my gosh, serve!) others.

Secondly, there is an implicit assumption that an economy must have a largish base of non-PMETs to support PMETs. It’s sort of like having a necessary number of privates and non-commissioned officers for the officer class to lord over. This assumption is implicit in how it speaks of having to import more foreigners if a larger number of Singaporeans move into PMET ranks. But the question will then be: if a largish base is always needed, does that mean we’ll just shrug if we don’t improve productivity?

Thirdly, there is an unstated assumption that PMET jobs must necessarily pay better than get-your-hands-dirty and serve-other-people jobs. Otherwise why would the White Paper boast of more Singaporeans moving into PMET?

If I express these underlying assumptions graphically, it would be like this:

Yet all these assumptions troubled me. They suggest that our population planners are like generals preparing to fight the previous war. What if the world tomorrow were radically different? Why do we want to maintain an economy structured on old technology and rigid class lines?

* * * * *

Just on Monday afternoon, I interviewed a 24-year-old American who was passing through Singapore on an extended vacation. What piqued my interest was that since age 17 or 18, he had been taking seasonal work as a construction carpenter, building houses in northern California. He has no certification or formal training, and by our reckoning he would not be PMET; he’s “only” a construction worker.

Building a house I asked him how many workers are needed to build a three-bedroom house. He said about three or four persons working about three months. In addition to these three or four, at various stages a plumber, electrician or roofer would come in to do his part, but each would need only a few days. Such a house would cost about US$150,000. About half of this value would be paid out in the form of wages to the workmen directly involved, he said.

“How much are you paid?” I asked him.

“US$18 per hour,” was his reply.

“How many hours, how many days a week?”

“Eight hours a day, five days a week,” he said. Overtime isn’t common (think: wonderful work-life balance!), but occasionally, when it’s called for, it is paid at rate-and-a-half.

I will let my readers pick up a calculator and work out what this 24-year-old earns monthly doing manual work. By comparison, the typical construction worker in Singapore (virtually never a Singaporean) makes about S$18 – $20 per day. They usually work 10 or 11 hours a day, at least six days a week, sometimes seven. Inclusive of overtime, they gross about S$600 to $1,200 a month. Those with specific skills, e.g. tiling, make around S$1,500.

And oh, by the way, the American guy has a university degree in some unrelated field, social science or something like that.

I also learned from him that on the worksite, the crew of three or four would be led by a “lead carpenter”, who is generally paid US$50 per hour. His job is to read and interpret the architectural drawings, schedule the work flow in the most efficient way and to watch for quality of work. And to teach if workmanship falls short. Rush to your calculator again.

Is the lead carpenter a PMET?

Does it matter anymore?

By this point, I think you get my message. This business of PMET or non-PMET tells us very little. In fact it speaks more of our status-obsessed culture than anything else.

What is more important is whether people, doing whatever jobs they like, earn enough to support a family of four. Why a family of four? Because that’s what is needed for a steady-state population with replacement fertility rate. So, rather than speak about PMET or non-PMET, the graph should be presenting this kind of information: Where is the threshold and how many Singaporeans fall short of it?

We should be focussed on making sure that most people, except maybe apprentices or others just starting a career, should be able to earn enough to support a family. If a minimum wage is needed to push wages up, perhaps this should be implemented. Better yet, we shouldn’t be such a low-tech, low-productivity society that needs a mountain of people at the low-wage side of the graph. We should have automated much of the grunge work, to take population pressure off this island. We’d be better off if the graph looked like this, where ALL work are compressed into a narrower income spread:

This then brings up the question of income gap, and how a wide income gap,

leaves plenty of Singaporeans below the family line

which reduces the Total Fertility Rate since they can’t afford children

which drives our government to use immigration to top up the population

which leaves Singaporeans feeling like aliens in our own country.

This should be a ripe subject for further discussion. For now however, I’ll just point out that the pertinent issues are income gap or earnings spread, and cost of living. Fussing about PMET misses the point.

* * * * *

In the last two days, our government-friendly mainstream media are loudly featuring calls from various chambers of commerce saying: We must have more labour or our businesses will collapse. I can picture the government waving the conductor’s baton frantically, summoning up fortissimo choruses from them.

There is an old saying we seem to forget: Necessity is the mother of invention. Innovation and creativity come not when inputs and resources are unlimited, but when constraints are tight. Unlimited inputs merely allow us the easy way out of carrying on as before.

When an interior designer has to work within just 50 square metres and still meet the client’s brief, that’s when he may be doing his best work. When a restaurant operator has to please the same number of customers with two fewer servers, that’s when he starts to look critically at his processes.

In contrast, our current approach implies this opposite reasoning: because it is hard to get productivity improvements to grow businesses, we need to open the spigot of foreign labour. May I suggest that it is because we open the spigot that we aren’t getting productivity improvements?