Workers in lorries, waiting to go back to their dorms

He must have been a good worker and was lucky to have had two promotions over the ten years he worked in a shipyard. With each promotion, his salary went up a notch. The “he” was someone our volunteer translator spoke with just the other night.

The worker was sitting in a lorry parked along a road, perhaps waiting for his co-workers to return to the vehicle after their errands. We don’t know his name. Our translator went up to him to make a bit of conversation, in the course of which he learnt a bit about this guy’s salary history. When our translator reported back to us what he learnt, we recorded a part of his report.

This was what our translator told us:

(In the recording, it is TWC2’s vice-president Alex Au speaking with TWC2’s volunteer translator, reporting on what the lorry guy told him.)

As readers would be able to understand from the audio recording, the anonymous worker-in-a-lorry had worked ten years in a shipyard. He began with a basic salary of $17 a day, which is roughly equivalent to $442 a month. With some overtime work, he might be able to earn a gross salary of about $500 – $600. But there were salary deductions, for housing and laundry. Deductions would bring his gross salary down a fair bit to a net pay probably in the same $400 range.

After he got promoted to safety supervisor, his basic salary increased to $19 a day (roughly equivalent to $494 a month). One more promotion later, to foreman, and his basic salary rose to $21 a day (roughly $546 a month)

He must have been the lucky one, for not every worker gets a promotion. Those who aren’t promoted apparently do not enjoy any increase in salary.

After ten penny-pinching years, he decided to switch to construction. It’s not straightforward. Singapore’s Building and Construction Authority requires all new construction workers to pass a basic skills test, known as the SEC(K) test. And often, workers have to pay thousands of dollars to enrol in a training course before they can pass the test.

Our worker-in-a-lorry must have done so, for now he is in a construction job. He told our translator that his basic salary, as a newbie construction worker, was $24 a day (roughly equivalent to $624 a month).

Shipyard subcontractors fear an exodus

TWC2 has heard that shipyard subcontractors are acutely aware that their employees would quit and switch to construction if it was easy for them to do so. Interestingly, this concern surfaces when the question of eliminating recruitment fees (and the consequent debt borne by workers) is discussed. It is as if these employers cannot imagine being able to hang on to their workers if not for them being in debt and thus tied to their present employment. If a worker should quit or be fired before the debt is paid off, he would be in deep financial trouble, facing money-lenders yet with no stable income. Knowing this, workers feel trapped in their jobs.

But a system with debt at its centre, with workers effectively tied to their jobs as a result, is very much what’s known as modern slavery. Our entire marine engineering industry seems be reliant on such practices to stay afloat.

Singapore is not the only country with shipyards. Ours have to compete against South Korean yards, for example. In South Korea, all workers have to be paid the minimum wage which, in 2024 is set at 9,860 Korean won per hour. That’s roughly $1,888 per month in Singapore dollar terms. How is it that Korean yards remain competitive? Productivity per worker must be far higher.

By contrast, in Singapore, it looks as if our businesses rely on (modern) slavery for cheap manpower to compensate for lower productivity.

Construction wages only RELATIVELY better

Our worker-in-a-lorry switched over to construction when he could, which was after ten years working in a shipyard. It must have taken him that long to save enough to pay for a construction basic skills training course. His starting salary as a new worker in this trade was $24 a day, or about $620 a month. He is happier now, but even so, it’s nothing for Singapore to be complacent about.

Japan and South Korea are opening their doors to migrant workers. Japan’s minimum wage is similar to Korea’s, and in both countries, the minimum wage is applicable to migrant workers. Now Israel is recruiting from South Asia too. As this story from the Business Times (Needing labour, Israel recruits workers from South Asia, 31 Dec 2023) reports,

In the coming weeks, thousands of people from India and Sri Lanka will be sent to Israel, officials in the three countries said, as part of agreements to supply workers, primarily in construction, health care and agriculture.

Israel’s minimum wage is around 5,600 shekels a month, or about $2,027.

Is Singapore sleepwalking into a future crisis? As migrant workers find more attractive alternatives, are we going to rely more on capture tactics to find and hold labour?

Progressive Wage Model

Singapore does not have a legislated minimum wage. However, the Ministry of Manpower is using administrative measures to push employers in specified sectors to adopt salaries in line with the ministry’s guidelines. For example, cleaning companies need a Cleaning Business Licence administered by the National Environmental Agency; security companies need a licence from the Police Licensing and Regulatory Department. Compliance with salary guidelines can easily be made a condition of licensing.

It is interesting that the floor salaries set out in the Progressive Wage Model are in the same ballpark as the minimum wages in Japan, South Korea and Israel. Perhaps, this is no coincidence.

However, the Progressive Wage guidelines only apply to employees who are citizens or permanent residents. Migrant workers are excluded. The effect of this exclusion can be seen from a closer look at two sectors where migrant workers are also found.

In the cleaning sector (see 2024 guidelines for this sector) the lowest rank of conservancy workers (i.e. town council and restroom workers) are to be paid at least $2,060 per month. However, for migrant workers in this sector, their monthly basic salaries are almost never more than a few hundred dollars, and the gap is disgraceful. As far back as December 2016, TWC2 raised this issue (of excluding foreign workers from the Progressive Wage Model) in a letter to the Straits Times.

In the landscape sector, where we also see far more foreign workers than locals, the guidelines for the lowest rank set out a monthly salary of $1,650. The guidelines also state that such a worker should be able to do five “basic general duties”, namely watering, weeding, basic pruning, soil aeration and clearing of horticultural waste. These are exactly the duties we see migrant workers perform along our streets and in our parks. But they are paid much, much less. See our story The gardener with a nice smile. That gardener was earning $14 a day. His monthly gross salary was probably not more than $500.

How does Singapore justify this double-faced approach to salary rights? This is hardly discussed, but anyone examining the issue would likely come to the conclusion that Singapore does this simply because it can. Not because there is any morally defensible reason. The perverse effect of exclusion of migrant workers from the Model is obvious: their salaries languish where they were as many as twenty years ago (see our story Two generations of migrant workers).

The argument can be made that by inaction on two fronts – allowing salaries to languish outside the Model’s framework and not doing very much about hefty recruitment fees paid by migrant workers to secure jobs in Singapore – our government allows fertile ground for modern slavery. Low salaries mean it is very hard for workers to pay off their debts, and they remain trapped with their employers for longer.