Phantom Workers with Real Pay vs Real Workers with Phantom Pay

 

One of the greatest phenomena of any given society is the ability of the human mind to get past regulations and to even make money from the said regulations. In Singapore, this is most visible in the area of hiring cheap labour from other parts of Asia.

Our situation is simple. There are industries like shipping and construction which depend on cheap labour from other parts of Asia. However, there is a quota on how many labourers a company can hire. The idea being that you can’t hire cheap labour from Asia unless you have hired a certain number of Singaporeans.

It sounds like the government is doing something to ensure the locals get first pick at jobs. To an extent, it works for small professional firms, which hire a number of locals before moving onto foreigners. However, it’s a different story when it comes to industries like shipping, construction and food. A lot of jobs in these industries are what you call “dangerous” and “dirty” and locals, particularly young graduates shun these jobs regardless of how much is on offer.

The quota system has created an industry where the industries that need foreign labour will make “CPF” contributions for local Singaporeans to ensure that they have quota to hire the labourers who are willing to do these jobs. While technically illegal, it’s a money spinner for the government. The local phantom will inevitably have a higher tax bill (to avoid suspicion, one declares the phantom wage as tax – Singapore’s direct taxes being relatively low) and the CPF kitty which is controlled by the government gets filled by workers who may not otherwise had CPF contributions.

However, you do get unscrupulous “entrepreneurs” who pay off the “phantom” workers but end up hitting the actual workers with all sorts of fines and fees to an extent when the guys doing the actual work don’t get anything. Then, it reaches a point when the guys who have been screwed complain visibly, thus denting the clean image that the government likes to present:

 

 Copyright The New Paper

When these things happen, the government will inevitably remind the rest of us not to sell our CPF quota and we are told that “phantom” workers are a social problem.

I’m going to leave the phenomena of hiring phantom locals to more intelligent people. I will however, suggests that the government is focused on the wrong phantom worker problem. The serious phantom worker problem that we have in Singapore comes from what I call phantom workers receiving real salaries but real workers receiving phantom salaries.

To be fair to the government, its not limited to government. You get this situation in the private sectors. I’m sure that plenty of us have experienced that person who comes into work, plays with his phone for two hours and then leaves. Instead of wondering about that person’s value contribution, the boss starts complaining that the other workers who are actually doing something that can be recognised as work that they’re not doing their part. Ironically, it’s a situation where the guy playing with his phone is earning more than the guys doing work. This is what you might you call a clear-cut case of the phantom worker earning a real salary but the real worker earning a phantom salary (defined as just enough to meet legal requirements without actually taking living expenses or contribution to the company into consideration).

Unfortunately, this isn’t something limited to quirky companies in the private sector. If you look at this syndrome, one is bound to suspect that the phantom worker issue goes far deeper than that.

Let’s start with the fact that for the longest of times, two thirds of the population were earning below the statistical median wage. Wages at the lower end of the scale were, well pretty low and whenever people said anything about it, the standard reply was that the workers needed to become more productive. You hawker centre aunty for example earns around $1,400 a month (before CPF deduction and this is considered as close to a minimum wage as it gets in Singapore). Nobody doubts that the hawker centre aunty is actually a real worker doing real work (you actually see your tables being wiped and your dirty dishes do get collected). Yet, should your hawker centre aunty find it hard to get buy on S$1,400 a month and ask for S$1,401, she will be undoubtedly scolded in the national media for not being more productive and upgrading herself. Classic example of a real worker earning a phantom wage.

However, if you look at the government, you can’t help but feel that we have plenty of phantom workers earning very real wages. We have, for example, five mayors earning on average of S$600,000 a year. Their wages are not exactly phantom like. However, what exactly is the work that they do? If you think about it, Singapore itself is a city. In most nations, the mayor of any given city does the actual work of running the city, pretty much like what our Prime Minister does. However, that’s not exactly the case in Singapore. Our “Mayors” run councils made up of several constituencies, which in turn are run by members of parliament (MP).

Clearly, we have a case of a job, which is to all intents and purposes “phantom.” However, the wages are not. Why do we need phantom workers earning real salaries. The purpose of a phantom is phantom and their wages should match.

We are constantly reminded that Singapore is a small place with no resources and that we need to conserve what little we had. Surely, addressing the issue as to why phantom workers are earning real salaries and real workers are earning phantom salaries is key part of doing this.