06 June 2005

Foreign Maids & Poor Singaporeans

Recently, the press provided us with some interesting figures about the poorer people in Singapore. The bottom 20% of wage earners in Singapore earn less than $1,200 a month.

June 4, 2005
Bosses told to raise low wages for own good
NTUC chief says not doing so could lead to social tension, damage businesses
By Lynn Lee

IT IS in employers' interests to raise wages for their lower-salaried employees, as having a pool of workers unable to cope with living costs could lead to social tensions.

Labour chief Lim Boon Heng said last night that this would in turn hamper the operations of businesses here.

'It is for the own good of the employers,' he said, commenting on the National Wages Council's (NWC) recommendation that firms planning to raise wages should give lower-income employees higher increases.

'So it's in everyone's interest to play our part and ensure that they are not left behind.'

The nearly 300,000 low-wage earners in Singapore - those earning $1,200 or less a month - make up the bottom fifth of salary earners here.

Let's take a moment to think abut the earning power of (1) Singapore's poorer citizens and (2) Singapore's foreign maids.

Let's say Madam Jin Pai Mia is a 55-year-old spinster belonging to the Low-Income Singaporean category. She works as a cleaner in a commercial office building and earns $900 a month.

Madam Jin takes the MRT to and from work every day. That's about $1.50 x 2 x 24 days = $72 a month. She pays about $60 for her water and electricity bills at home. She eats three meals a day, each costing an average of $3.00. That's $3.00 x 3 meals x 30 days = $270 a month on food. Let's say Madam Jin falls sick once in a while and needs to see the doctor. We'll put it at $20 a month. She rents a flat from the HDB. Let's say it's $250 a month (I don't know how much it costs - it's just my guesstimate).

That's $672 on basic stuff like transportation, water, electricity, food, medical care and accommodation. After deducting $672 from Madam Jin's monthly salary of $900, she's left with $228.

Now, a foreign domestic maid gets about $300 a month. However, the maid does not need to spend money on public transport to get to work each day. Her employer pays the electricity and water bills and provides three meals a day. The maid's accommodation is essentially free. If the maid falls ill, the employer is, by law, responsible for her medical expenses.

So when the maid gets $300 a month, the maid really earns $300 a month.

However, when Madam Jin gets $900, she's really earning just $228 a month.

What are the conclusions we can draw from my simple scenarios above? Well, it largely depends on your perspective.

You could say that poor Singaporeans are really poor and that it's amazing that 300,000 of them live like that. Or you could say that Singapore's foreign maids are in fact quite well-paid, considering that the employer provides free food, lodging and other amnities.

If you probe a little more, you might wonder why richer Singaporeans (those who need and can afford a domestic helper) generally don't employ a poor Singaporean woman as a live-in maid, as opposed to a Filipino or Indonesian woman. (The Singaporean woman could be paid less, but in return you provide food, lodging etc).

You might also examine the idea that Singapore employers are basically an evil bunch who exploit both foreign maids as well as lowly-educated, lowly-skilled Singaporeans.

If you think a little further, you'd also wonder about what the future holds for someone like Madam Jin Pai Mia. Because there WILL come a day when she grows too old and weak to be cleaning toilets in an office building. Madam Jin will eventually be replaced by a strong, healthy Bangladeshi male worker. This young man will do the same work for 5 years, then return happily to Dhaka, buy a plot of land and start a rice farm that will support his family's needs for years and years to come.

Meanwhile, what will happen to Madam Jin? How long will her meagre retirement savings last her?


Huichieh said...

"The nearly 300,000 low-wage earners in Singapore - those earning $1,200 or less a month - make up the bottom fifth of salary earners here."

Actually, a more detailed breakdown of the composition of the 300,000 would be more helpful--make that crucial for drawing any conclusion.

What sort of jobs are we talking about? Part time; full time? In what sectors? Doing what? What about the people who hold these jobs? Old people? Middle aged? Students? What about the aggregate family income? Are the FDW (foreign domestic workers) included in the 300,000?

Anonymous said...

Not only does the maid "earn" the $300, she also sends part of it home where the money is magnified. So, the maid is making an investment whereas Mdm Jin Pai Mia probably doesn't even save enough for her retirement, for her medical bills, etc. She will end up as Mdm Boh Mia.

voreth said...

1. Strictly speaking, what you should say is that the maid earns much more than the $300 she receives. It's $300 plus whatever should would have paid for the "electricity and water bills... three meals a day... accommodation" and even health benefits. On the other hand, her job description is not quite comparable. She's basically on call most of 24/7... Incidentally, she may never see most of what she sends back home--anecdotal evidence would suggest that most of it goes to family members in the home country.

2. What then is the proposal to help poor Mdm Jin Pai Mia--who, on your own account, is "lowly-educated, lowly-skilled"? Let's say that the govt. implements some minimal wage policy; or increase the levy on foreign workers; or ban them outright. Would that really help people like Mdm Jin? Or would it merely give employers incentive to employ less of people like her, or--beyond a certain point--invest in more technology in substitution of labor?

Incidentally, I think $2.50 is a more likely per meal cost, possibly even $2.00. That would be another $45-90 to the kitty. But that's small change in the larger scheme of things.

Mr Wang Says So said...

Loy's question is a good one. Unfortunately, the newspaper article is not entirely clear on the composition of the 300,000 low-income earners.

My guess is that it does not include FDWs. I say this because Lim Boon Heng referred to the workers' inability to cope with rising living costs. FDWs do not need to deal with rising living costs in Singapore - these costs are all taken care of by their employers.

But of course, that is just my guess.

On Voreth's comment about proposals to help Madam Jin -

actually, my main concern is not so much about those years when the Madam Jin's of Singapore are still able to work & earn a salary, albeit a small one.

My main concern is those years when they are no longer able to work & earn money to support themselves.

Huichieh said...

No, I didn't really expect you to have the relevant data. Actually, I have no idea who would have such data or whether ordinary citizens can access such data.

As for the "main concern"--there is such a thing as the Public Assistance Scheme, though as friends in the social work line often tells me, the people who need them are also the ones who often enough don't know about them.

The flip side is that--in some countries--the 'needy' knows a lot about such schemes and are even quite able to 'get the most' of different programs, which only makes me wonder if someone who is able to wade through legalese to maximise welfare handouts should have the wherewithal to be productively employed...if not always the case, at least a significant proportion of cases.

Monkey said...

there is just simply not enough known about the poor in singapore. they are only 20%, you don't see them like the homeless in other countries. you don't notice them just like americans don't notice the hispanics working in lowly paid jobs. 80% of singapore is middle-class to rich and this 80% assume that because they are the majority, that the 20% pretty much do not exist.

really makes me think hard about my reactions when a domestic worker friend of mine told me her friends get paid $280 a month (and she gets paid $500 coz our boss was angmoh) - I was appalled. btw domestic workers for expats in singapore get paid A LOT more!

But just like every other middle classed person in singapore, i now find that i don't know anything about the other 20% of the population. they're not like artisanal farmers or people who live in ghettos (I suppose we have our own version of ghettos). THey don't jump into your imagination instantly. It's really depressing :(

Eileen Chew said...

If we take it to the extreme and say that all firms obediently follow the chief because it is for "the good of the employers". Can't quite remember my economics but here goes: at first, workers would see an increase in disposable income. They would go out to spend more on consuming goods and services. This increases activity in the domestic economy. Demand increases, with the limited supply in the short term, prices increases.

In the meantime, the employees begin to wise up. The higher cost of labour is put into price of products. This sustains the prices of goods in the longer term.

CPI, the indicator of inflation, goes up. We come back to the same complaint: living cost is always going to be higher for this pool of workers and they will always be unable to cope with living costs.

Is it that the low wage earners is not even earning subsistence pay or that we just need to say something to encourage the increase of their disposable income so they feel less disenchanted about their standard of living and reduce possible complaints about the government's management of the local economy? Ha!

Huichieh said...

Small point: "they are only 20%"--that's 20% of the workforce, not population. 300,000 is under 10% of the resident (citizens and PR) population or about 7% of the total population.

Incidentally--until there are more data (see my first comment) this is a highly misleading piece of statistic if used to indicate the number or percentage of "the poor".

Graduate students usually earn not much more, but they are not necessarily "poor". Neither are students doing part-time jobs. Or the aunty/uncle supplementing family income on the side now that the kids have all grown up (e.g., my mom who teaches some tuition. Or for that matter, the young person on his/her first job as a cashier. In fact, most people are "poor"--including the well educated--at one point or other in their lives if "income" is the only measure used.

Eileen's comment raises an interesting issue: the possible correlation or lack thereof between actual changes in standard of living vs. expectations and perceptions...

Monkey said...

thanks for the clarification
my bad. but then that just makes the point even more... the percentage is SO LOW that there's a higher chance of not noticing these people. but you're definitely right in highlighting the ambiguity in the categorization of wages does not necessarily reflect a person's overall financial ability or status.

tscd said...

I have calculated that, as a doctor in the UK, I earn less per hour than the hospital cleaners.