There was a period during the Covid-19 pandemic when migrant workers were in short supply. Arrivals had been stopped and migrant worker numbers declined as more and more went home with no replacements coming in.
In effect, we had a natural experiment in which the change in supply and demand rebalanced workers’ bargaining power. Recruitment costs evaporated. The first group to benefit were transfer workers, i.e. workers moving from one job in Singapore to another without first going home. We met several who did not have to pay costs to anyone to move to their new jobs. Even when borders began to re-open in late 2021, the demand for workers was strong enough in the early stages that repeat workers (i.e. those coming in from Bangladesh for their second or subsequent jobs) did not have to pay significant amounts in agents’ fees.
In the middle of 2022, we did a quick study of Bangladeshi workers who had recently arrived in Singapore post-pandemic. The results of this study were reported in Labour crunch during pandemic reveals hopeful possibilities for recruitment cost. It found that:
- sampled workers either did not pay recruitment fees at all or paid significantly lower recruitment fees compared to the pre-Covid 19 pandemic period. Fewer workers also went through agents, as they were able to tap upon Singapore-based social networks such as relatives or past employers.
- pandemic-induced restriction of labour supply through the two-year closing of labour migration channels in Singapore’s marine and construction industry contributed to an improved condition of recruitment and recruitment fees that newly arrived workers experienced, compared to pre-pandemic levels.
The study noted that two relatively unprecedented no-fee models of recruitment pathways were observed among the sample, and observed that these two pathways are worthy of further exploration and possible emulation at scale across the industry.
Even before we published the results of that study, we expressed our fears that once the demand-supply equation was back to pre-Covid levels (i.e. back to the market failure situation before 2020 where demand for jobs far outstripped supply) the awful “norms” of high recruitment cost would return. Quite early, we saw a few examples – see our post As borders reopen and workers return, so do the usual abuses.
Three more newbies
In January 2023, we chatted with three more Bangladeshi workers who arrived in Singapore for the first time in 2022 and asked them how much they paid for their recruitment. Their replies confirmed what we had expected. The high recruitment costs so typical of the pre-pandemic period had returned.
Hassan, 23, came to Singapore for his first-ever job here in June 2022 to work in construction. Prior to getting this job, he enrolled for a basic construction skills course in a training centre in Bangladesh, spending three months there and passing the skills examination at his first try. He paid 350,000 Bangladeshi taka to the training centre which, at the exchange rate of mid-2022, would be roughly $5,200.
Getting a skills certificate was one thing, getting a job was another. For that he approached an “agent” – the usual unlicensed freelance operators sometimes known as fixers or dalals – who placed him with a Singapore company, in return for 400,000 taka (S$6,000). Hassan told us that the agent he spoke with was not the only one in the chain. He came to know that there were 2 or 3 other parties involved, at least one of which was based in Singapore. However, since he had not had the opportunity to speak to any of these other parties, he could offer no information as to who they were. One of them receiving a cut of his 400,000 taka could even have been the boss or manager in the company in which he was placed, but it was no more than suspicion on his part.
In total, Hassan paid $11,200 before he even boarded the plane to come to Singapore, enriching several people in the process.
Alamin‘s numbers are similar to Hassan’s. He came to Singapore in April 2022, after completing a skills training course in Dhaka. Like Hassan, Alamin reported paying “about $5,000” to the training centre and a further $6,000 to his agent.
The boss of the training centre offered to find jobs for all his trainees on completion of the course, but Alamin declined his help. “The training centre boss want even more than $6,000,” Alamin said, explaining his decision to use an outside agent.
When Alamin came to TWC2 this month, his Work Permit was approaching its expiry date. He had just learned from his employer that there was little prospect of renewal. So, one year after getting the job, he now was facing the likelihood he’d have to look for a new one, and pay heftily again for the next job. He had not yet earned enough to recover the $11,000 he invested in getting the first job.
Shah, 22, has a story that should make one very angry. In his case, the training centre also found his first job for him. For both the training and the job placement, he was charged 800,000 taka by the training centre. That would be about S$11,500 at the exchange rate of October 2022 – the time period when he was enrolled at the training centre.
There were a few other expenses he had to pay out of his own pocket, chief of which was for a passport. That cost 8,000 taka (S$115). There was also the cost of a pre-departure medical check-up: 1,500 taka, or S$21.50.
Shah arrived in Singapore at the beginning of December 2022 and was housed in a hostel in Beach Road, paid for by the employer. For two months, he languished at the hostel; no Work Permit was issued to him and he had no work.
With TWC2’s help, Shah has filed a complaint with the authorities.
Debt
Few Bangladeshi families needing to send their sons abroad to work would have cash in hand to pay upfront costs of such magnitude. They sell assets or borrow to raise the necessary funds. All three men and their families are now in a net loss situation. Hassan got injured at work and lost his job. Alamin’s boss has told him renewal of his Work Permit would be a long shot. Shah never even started on his job in any real sense.
It’s too easy to say the payments took place in a foreign country, but the inescapable fact is that they were payments to join Singapore companies. The bosses who hire through such dalals and training centres are right here in Singapore. We must take responsibility for the abuses, as must the government for allowing such a situation to persist.