Monday, September 17, 2012

The Price of Washing Dishes

The debate about wages took a very interesting turn this week when Sakae Sushi, a chain of conveyer belt sushi restaurants announced to the press that they were offering “dishwashers” the grand total of $3,000 a month. They started by announcing that nobody was applying for the job and the very next day they announced that they had some 300 applications for ten positions.

The issue of wages for blue collar workers is closely intertwined with that “hot topic” of the number of foreigners in Singapore – namely the ‘darkies’ from the poor parts of Asia. In a paper titled “SingaporePerspectives 2012 Singapore Inclusive: Bridging Divides” it was found that Singapore’s “excessively liberal” immigration policies had a role to play in growing wage inequality. There is the drive to attract ‘high income’ global talent, which raises incomes at the top existing concurrently to with the drive to attract ‘cheap’ labour, which brings down wages at the lower end of the market. In terms of wages, we’re a first and third world country squeezed onto 600 plus square kilometres. Working professionals compare their salaries with their counterparts in New York and London while the labourers compare their wages with Manila and Dhaka.

Labour for many menial tasks in Singapore is cheap – so much so that working professionals often live a more comfortable lifestyle than their counterparts in New York or London. Working professionals in London or New York do their own laundry or send it to the laundromat. In Singapore, most working professionals (especially working married couples) have a maid to take care of every unimaginable household chore. When I lived in London, the idea of calling an electrician was scary – electricians charged 26 pounds an hour in the late 1990s. In Singapore, it’s a given that I’d call an electrician for every small shit.

This situation has been pretty much accepted for years. However, ever since the Middle Class found its wages being squeezed, the issue of wage inequality has become a pressing one.  The internet is filled with stories about how working professionals (lawyers, bankers etc) and graduates have been forced to do all sorts of menial jobs to stay alive.
The arguments on this topic are skirting around the issue of what to do with “foreigners.” After the slap in the last election, the government has “tightened up” up rules about entry visas for the darkies (pink blotchies are still being imported on mass). The idea is simple, with fewer darkies willing to do low wage jobs at cheaper rates than the existing ones, there will be more jobs for Singaporeans, particularly those at the lower end of the social spectrum (ie the old, crippled, with prison records etc).

Unfortunately for the government, businesses, particularly the small and medium ones, are feeling that they’re being kicked in the wrong parts. They face a “labour crunch.” The business community argues that it provides lots of jobs but Singaporeans won’t do them mainly because they feel the jobs on offer are either badly paid or an invitation to be screwed royally.

The powers-that-be are in a jam. A member of the community of great minds thinks we need to “raise the wages” of the “blue collar” sector. The argument is that blue collar workers in the West are respected because they’re well paid and so we merely need up the wages of blue collar workers and before you know it, you’ll get a host of Singaporeans rushing to fill those positions.

The business community has a counter argument. If their wage bill is raised, they’ll have to find the money from elsewhere and that means prices will be raised by the time things reach the consumer. As Dr Janil Puthucheary, a Member of Parliament argues, “Are we willing to pay more just to ensure the workers get paid more?”

There are flaws in both positions. Blue collar workers in the West are expensive not because Westerners believe blue collar workers should get a lot of money. They are expensive because they are rare – despite the seemingly vast wages they earn; you don’t get a lot of people rushing to join plumbing school or electrician school.

Exploitation of the underclass is also rife in the West. Companies that offer basic plumbing services for example do charge the consumer a good deal of money. However, these are the same companies that are quite shameless about using “illegal” labour. The American agricultural sector for example, depends on illegal labour – Mexicans with no papers will do the jobs while Americans with the papers won’t (so much so that the CEO of HCL once commented that American graduates are unemployable).

On the other side, repeated calls that raising the wages of the masses in Singapore will scare away foreign investors and Singaporeans will shy away from spending more for goods and services and thus damage the economy are overblown.
Singapore is in a neighbourhood of places where labour cost will always be cheaper than in Singapore. As a result, Singapore can no longer afford to compete on price. Despite the opening up of countries with larger and cheap workforces, foreign investors still come to Singapore – our workers can compete on quality (Both 3M and Alcon used this argument about setting up a plant in Singapore).

Secondly, prices in Singapore have continued to rise and Singaporeans have not shied away from spending on certain things.

So, where does Sakae Sushi’s job offer fit into this picture? The answer is probably not a lot. While they are paying three times the wage for the dishwasher’s position, they’ve kept the hours long (9-12 hours daily for six days a week). They’ve also added additional task to the position. In short, Sakae Sushi has done exactly what the government always does – throw money at a problem without addressing the fundamental roots of the problem.

Yes, money is important. It’s better to have more of it than less. However, as many Western countries have discovered, people, after a certain point want more than just a high pay cheque or at least they’re more interested at looking at the things they have to do to earn that cheque. I believe that the people who take up the job may enjoy receiving what seems like big money for the first year or so. Later on, they’ll question whether the hours they have to give to the job are worth it.
Singapore needs to shift focus from a “kicking out foreigners to give Singaporeans jobs” to generating genuine high value jobs for the people. This will be a messy process as it will require allowing entrepreneurship to take root – a process that will be tough given Singapore’s culture of not tolerating failure.

We have to accept the fact that certain jobs are dull and mundane by their very nature. The job of washing dishes is one of them. Rather than trying to “glamorize” the job and throwing money into the job or trying to make dishwashers more productive, businesses should be allowed to either hire cheap labour or find technological solutions.

Seriously, if a job can be mechanized, why shouldn’t it be? If we go back to the example of dishwashers –the question is not whether we should encourage more Singaporeans to be dishwashers but whether we can find a Singaporean entrepreneur to find dishwashing solution suitable for Singapore – ie is there a dishwasher that will fit into Singaporean buildings and can we design one. Doing things like this requires brains and creates high paying jobs. Surely this is more valuable than creating a mass of badly paid jobs.

Then employers need to shift their mind sets for certain jobs. Jobs in the service sector like being a waiter need not be lifelong permanent positions.  In the West this is an accepted norm. I was once served by a bar girl in London who latter on got a job at Ernest & Young. Los Angeles is filled with waiters who are aspiring actors. The same jobs in those cities don’t pay better than they do in Singapore. The employers accept that the people who may be interested in filling these jobs are merely filling a temporary need. Employment for certain jobs need not be forever.

Yes, there is a need to address the growing wage gap. However, businesses and the public need to work together and a greater amount of creative thinking needs to be applied. 


Anonymous said...

This is a thoughtful piece.
I agree with you there've been so much mis-allocation of resources in our society today, and all it takes is to be able to think out of box and reorganize them more effectively and efficiently.

Even on the subject of domestic maids. If and when every households need one for 7days a week, this are signs of unhealthy over reliance of workers. I am not convinced people cannot do less. Imagine every household would switch to part-time maids for 2-3 days a week, that would be enough to pool a centralized co./body to organize the rotation of their services. And in turn, we could reduce the number of FDW here in SG, or free them to the SME sectors, as an example.

Anonymous said...

I agree with the shift in focus, but I think it is "a process that will be tough given Singapore's culture of protecting GLCs".