It is no secret that Singapore is overwhelmed with foreign workers. The common justification is that foreigners are ‘cheaper, better, faster’ than locals. Hence, it makes economic (business) sense for companies to hire foreigners over locals.
On the other hand, it is also no secret that many locals are unemployed or underemployed. The common belief is that at least partially, it is caused by the availability of too many foreign workers. If the hiring of workers is simply seen from the company (micro-economic) perspective of maximising profit for the company, then hiring foreign workers makes economic sense.
However, if the employment situation is seen from the country (macro-economic) perspective of maximising benefit for the country, the decision on whom to hire could well be different. From the macro-economic perspective, if the foreign worker does not become a Singaporean and commit to Singapore, he takes all that he has earned (minus the amount spent in Singapore) to a country outside Singapore. He also takes his experience with him which he has gained while working in Singapore.
In contrast, the local worker is likely to remain in Singapore for family, social and cultural reasons. As such, the money he has earned and his working experience stay in Singapore. Hence, even though the local worker may not be ‘cheaper, better, faster’ than a foreigner, the benefit for Singapore could be greater because all that is spent on the worker stays in Singapore. So, in the interest of Singapore, it makes economic sense for local companies to hire local workers.
Dr Tommy Wong