Commentary: Making every job a good job requires all hands on deck and a heart for skills

In his speech at the Singapore Economic Forum last Tuesday (Oct 18), Deputy Prime Minister Lawrence Wong highlighted the need for broad change in the economy.

He said it currently “places too much of a premium on cognitive abilities – what we deem as ‘head’ work – and does not value sufficiently those engaging in other forms of work, such as technical roles which tend to be more ‘hands-on’ work, or service and community care roles which tend to be more ‘heart’ work”.

Indeed, the starting pay of university graduates in full-time employment is about 1.5 times that of polytechnic graduates and 1.9 times that of ITE graduates, with these ratios declining only slightly over the past decade.

Disparities in wages across occupations are also larger in Singapore compared with other countries.

For instance, the average monthly earnings of professionals in Singapore were about 2.9 times those of service and sales staff in 2020, whereas this ratio was 2.4 in Thailand, 2.3 in the UK and 2.0 in Switzerland.

While bearing in mind that occupational wage disparities may be greater in a city-state compared with larger countries, it is worth thinking about what may have contributed to the disparities observed here.

MARKET FORCES AT PLAY

To begin with, Asian societies are often said to value cognitive work over manual or craft labour.

In East Asia, some point to the lingering influence of Confucianism, under which scholar-officials were held in great esteem, and national examinations provided a reliable pathway for those for those from humbler backgrounds to move up in life.

However, the explanation cannot stop at culture, as wages reflect labour demand and supply in a market economy.

Decades of globalisation have lifted the wages of those with relatively scarce skills for which demand is strong.

With Singapore growing in stature as a regional and international business hub, Singaporeans in professional, managerial or executive (PME) positions have been handsomely rewarded by the market.

Conversely, those with skills in ample supply have seen muted or even stagnant wage growth.

This is why it is critical to calibrate the inflow of foreign manpower into Singapore across the skills spectrum, and not just at the PME level.

Businesses have to be weaned off excessive reliance on work permit and S-Pass holders, and make greater effort to raise pay and redesign jobs to attract local workers.

These considerations have guided foreign manpower policy particularly since 2010, and remain relevant today.

However, job competition is not necessarily confined within Singapore; those with skills that can be offshored also face competition from workers of comparable skill in countries where the prevailing wages are considerably lower.

Jobs may similarly be displaced by technology and automation, which have already taken over many routine tasks from human workers. This is a threat to white-collar jobs too as Artificial Intelligence (AI) becomes increasingly sophisticated.

Today, AI can perform not only routine administrative tasks, but also make investment and healthcare recommendations, and even generate art and music.

David Autor and other labour economists have found evidence of “job polarisation” — the decline of employment and wages in traditional middle-class occupations observed in many economies.

SKILLS, SKILLS, SKILLS

Given these trends, it is necessary for Singaporeans to possess marketable skills, and to deepen and refresh these skills throughout their working years in order to stay employable and enjoy wage growth.

Singapore’s SkillsFuture ecosystem plays a vital role in this, and DPM Wong, who's also the finance minister, indicated in his speech that it would be further strengthened to provide “more meaningful, more substantial” training.

Even more critical than market-ready skills are foundational skills that enable the acquisition of knowledge and skills through life, as well as interpersonal skills and creativity, which provide the best insurance against skills obsolescence.

There will continue to be opportunities in heart, hand and head work despite the advances of technology.

Most would prefer to speak to a human counsellor rather than a robot, however intelligent; hand-made craft will continue to command a premium over mass-produced equivalents, while responsibility for public policy will remain with human beings.

In fact, labour-augmenting technology can be a boon for workers by helping to increase productivity and wages.

There are countless applications, from video surveillance in the security industry to robot-assisted surgery, where technology can help humans do their jobs more easily, safely and accurately.

With routine cognitive and manual tasks freed up by machines, the worker of the future will increasingly need a blend of head, hand and heart skills to succeed.

The Institute of Technical Education’s philosophy of “hands-on, minds-on, hearts-on” education is spot on.

WORKPLACE PROGRESSION

In 2013, the Applied Study in Polytechnics and ITE Review (Aspire) committee, led by then-Senior Minister of State for Education Indranee Rajah, was set up.

It was tasked with enhancing the education and job prospects for students from ITE and the polytechnics.

Among the committee’s recommendations was to establish a place-and-train programme for ITE and polytechnic graduates, giving them structured on-the-job training in the workplace, complemented with classes at ITE and the polytechnics.

Today, this model has been expanded under the SkillsFuture Work Study Programmes.

For these efforts to make a difference, there must be progression pathways in the labour market and not just within the education system.

Beyond supply and demand in the market for skills, we cannot ignore institutional factors and biases in the labour market.

For instance, do employers lock workers into pre-set pathways based on educational qualifications, or do they offer opportunities for workers to move up regardless of their starting point?

Do they merely value paper qualifications obtained at the beginning of one’s career, or do they adequately reward skills and experience acquired over the course of an employee’s career?

SOCIETAL ATTITUDES

If Singapore is to realise the goal of becoming a more inclusive society, there is yet more work to be done.

Beyond fiscal transfers, it is necessary to address wage disparities across occupations and educational qualifications.

Rather than leave this completely to market forces, the Government has sought to lift wages for lower-income Singaporean through the Progressive Wage Model (PWM), which was initiated by the Labour Movement in 2012.

This is a system of mandatory sector-based wage floors and ladders, providing pathways for career progression. Initially introduced in the cleaning, security and landscaping sectors, PWM is now set to be broadened to many more sectors and occupations.

While the aim is to have wages rise along with productivity, the scope for productivity growth may be limited in some jobs.

Hence, the added manpower cost from the adoption of progressive wages must be borne by the general public through higher prices for goods and services, with the Government providing transitional support to employers.

This is the reason a whole-of-society consensus is needed for the successful adoption of PWM.

Together with Workfare, SkillsFuture interventions and foreign manpower policy, PWM can help to narrow wage gaps across occupations and educational qualifications.

Citizens, on their part, must equip themselves with the skills — cognitive, technical and interpersonal —to thrive in the workplace of the future.

Only then can Singapore build an inclusive society where every worker is valued, and every job is a good job.

 

ABOUT THE AUTHOR

Terence Ho is Associate Professor in Practice at the Lee Kuan Yew School of Public Policy and the author of Refreshing the Singapore System: Recalibrating Socio-Economic Policy for the 21st Century (World Scientific, 2021).