Monday, 25 February 2013

Bosses, pay less to the landlords instead and not to your workers

25th February 2013


Bosses complain about the tightening of foreign labour intake and threaten that SMEs will close shop and go overseas.

In response to TRE article (‘If can’t find workers, pay more money, STUPID!‘, 24 Feb), @Ahto responded:
If you want boss to pay more money then pay more for your food!”
This kind of response suggests that:
1) Bosses should be allowed to import more and more foreign labour
2) By allowing bosses to import more and more labour, then we can hope that we won’t have to pay more for our food.

Obviously, little thought had gone into the above response by @Ahto. In actual fact, even before the recent government tightening of the foreign labour tap, we were already paying more and more for our food. There are two outcomes of this:
1) Firstly, the bosses pay out less (in salaries) and earn more (charging more for food) and so pocket big profits and contribute to the increase of the Gini coefficient – the rich (bosses) get richer while the poor (the majority Singaporeans being squeezed) get poorer.
2) Secondly, the landlords see opportunity to raise their rent to squeeze the small bosses (the retailers) and so the small bosses will clamour for more loosening of government foreign labour policy and they thirst after cheaper and cheaper foreign workers. If foreign worker inflow is uncontrolled, the opportunity for the landlords will increase. This does not assure Singaporeans that food prices will not rise despite more and more cheap foreign worker availability. What this will guarantee is that the Gini coefficient will keep rising!

The bosses who threaten to close shop and move their businesses overseas are very juvenile in their attempt to frighten Singaporeans into allowing more foreign worker “invasion”. These bosses have only their profit interest in mind and without a bit of concern over the tremendous social consequences of foreigners overwhelming Singaporeans on this small island.

1) Firstly, the bosses are very selfish.

2) Secondly, they are barking up the wrong tree. Instead of shouting their voice hoarse to the government (to relent on the foreign labour policy) and to Singaporeans (better don’t complain too much or else …), why are they not shouting against the landlords and campaigning for lowering of other business cost factors?

Here is my rejoinder to @Ahto’s comment “if you want boss to pay more money then pay more for your food!”:

I don’t want bosses to pay more money. I want bosses to pay less money to the landlords. Why must they allow themselves to be held to ransom by landlords by allowing the landlords to monitor their (the bosses) business sales by way of them (the bosses) agreeing to pay part of their rent as a percentage of revenue? If all bosses unite and do not sign unfair rental contracts, and unite not to bid sky high prices for space, they will be doing a favour to Singaporeans.

Landlords will have to drop their rent levels and so the bosses don’t have to pay more money and we don’t have to pay more for our food, unless the bosses start cooking up new dishes of excuses (higher government charges, higher petrol prices, ad infinitum) to raise prices to fatten their own pockets!

If @Ahto is a boss himself, he should be thankful to Singaporeans who clamour for reducing dependency on foreign workers. We are helping them to pay less by encouraging some lousy SMEs relocate or close their businesses. The remaining bosses should thank us for supporting the government in tightening the foreign labour tap. By law of demand and supply, the staying SMEs face less tender competition for space and rental rates will fall. The higher pay that goes towards encouraging more Singaporean workers will come from the pockets of the landlords (as the landlords’ greed is tamed and their pockets shrink). Can the landlords threaten us that they will move their rental space overseas?

1) Firstly, Singaporeans want to prove the bosses wrong that there are not enough Singaporeans to take up the jobs.

2) Secondly, Singaporeans want a win-win for the bosses and the consumers by letting both have decent shares of the economic pie with a lowering of the Gini coefficient.

@Ahto is terribly simplistic to assume that asking bosses to depend less on foreign workers means that we want bosses to pay more. We ask that economic planners go to the primary source of cost inflation:

1) With more and more foreigners “imported” and therefore a higher population to feed, the demand on food will rise in tandem and this rise in demand will raise food prices more as the bosses greed for profit grow and they want to set up more shops and so they want more foreign workers and so …

2) Bosses need to pay Singaporean workers commensurate with Singaporean cost of living; otherwise Singaporean workers will all be paupers unable to meet their living cost obligations. Do the SME bosses have the conscience to agree that this fact is incontrovertible? If bosses want Singaporeans to compete with foreign workers on pay, it means that they want the presently small percentage of Singaporeans in the population to compete with the vast reservoir of foreigners available in the whole world and as more foreign workers land on the island, the Singaporean percentage will shrink and shrink until extinction.

Bosses, please note. You have to detox yourself from the drug of cheap foreign labour and find alternative solutions to your business cost problems. If you do relocate and succeed elsewhere, I congratulate you. If you close shop and have to become employees yourself and become members of the unemployed-Singaporeans club, then you will appreciate the present Singaporean angst against the government’s lax foreign labour policy.

Jo Li
Source: TRE website

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