Setting Income Criteria for S Passes and Employment Passes

Mr Zainal Sapari asked the Acting Minister for Manpower (a) how are the qualifying income criteria for S Pass and Employment Pass holders determined without disadvantaging our local workforce, especially new entrants to the labour market; (b) what kinds of PME jobs are considered not available or in short supply in Singapore for approval to be given to Employment Pass holders; and (c) what is being done to ensure that our local diploma and degree holders are able to secure employment and earn fair wages upon their graduation.

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Singaporeans aspire to secure good jobs and wages, and they have many different aspirations. Being a dynamic and attractive business location for local and foreign companies plays a critical role in helping to meet our people’s needs. We want to keep the labour market tight even as we create good jobs and we want to ensure that our Singaporeans are equipped with competitive skills to take up these diverse job opportunities.

In fact, it is more than creating jobs. We want to provide resilience in employment and growing a diversified economy at a sustainable rate of growth provides this. We will bring in good, higher value-add industries while developing our local companies continuously. We have a small local workforce. New industries and growing companies will inevitably need to be supplemented with a foreign labour force at various levels. This would also mean competition for our young graduates.

We will ensure that young foreign entrants compete on a level playing field as local fresh graduates. As such, we have adjusted the Employment Pass (EP) and S Pass qualifying salaries to take into account local wage progression. For instance, in January 2012, we raised the qualifying salary for young foreign graduates from $2,800 to $3,000 to keep pace with the increase in the median starting salary of local university graduates, which was $2,900 in 2010. We have also raised the EP qualifying salaries for the older and more experienced foreigners so that they do not compete unfairly with our locals, both fresh graduates and those with work experience. We have also tightened up the qualifications criterion. These steps help ensure that the quality of EP holders is progressively raised over time.

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Let us be clear. Businesses are here in Singapore because there are advantages, relative to being elsewhere. Many are competing regionally and beyond. Costs and capabilities are never local because the playing field goes beyond the domestic economy. Businesses are looking at building capable and diverse teams, and are tapping the whole range of skill sets and global networks to complement our local workforce. These efforts ensure that the businesses grow in Singapore and remain globally competitive. There will be competition for jobs but, ultimately, our main objective is that good jobs are created for Singaporeans. In reality, when companies move elsewhere, the jobs will also move and it would ultimately impact on our people and the opportunities available for them. It is a fair and valid concern as to how this balance is struck. We will continue to monitor the employment situation closely and make further refinements to our policies where necessary.

At the same time, we must help ensure that our local diploma and degree holders have the necessary skills for these jobs, not just upon graduation but throughout their working life. Therefore, we focus a lot of attention to build up a strong higher education system and Continuing Education and Training (CET) system. These are guided by Advisory Councils comprising different stakeholders, such as industry representatives and sector champion agencies, so that the curriculum imparts industry-relevant knowledge and skills.

To help fresh graduates make informed choices and maximise their employment opportunities, MOM also disseminates labour market information regularly. We have launched a series of employability interventions through the Singapore Workforce Development Agency which fresh graduates can tap on, including CaliberLink, a one-stop service point that integrates training assistance and career services for PMEs.

The impact of a globalised economy is being felt in many countries. Unemployment and youth unemployment are very high in a number of other developed countries. Our unemployment rate for Singapore Citizens remains low at 3.0% in September 20121, while over nine in 10 graduates from our Polytechnics and Universities last year found a job within six months from graduation. Those who have joined the workforce have enjoyed rising incomes; we have seen real median gross monthly incomes of full-time employed citizens rise by 2.5% per annum from 2006 to 2011. These are positive outcomes and suggest that our general approach is sound. We do recognise that competition for jobs will occur and that it is important to keep the playing field level while we create these good opportunities for our people.

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