Tan Kin Lian's Blog: Outsourcing

Thursday, May 20, 2010

Outsourcing

Many jobs in the private and public sector has been outsourced during the past decade. In the past, these organisations employ clearners, security guards and technicians and paid fair wages relative to the other "core workers" in their organisations. The workers are protected by the collective bargaining of wages in the organisations.

After outsourcing, these organisations were able to reduce their operating cost. The contractors who won the jobs were able to employ foreign workers or re-emply the retrenched workers at lower wages or to work for longer hours. This is a key contributor for the stagnation of wages in Singapore during the past decade.

The customers do not benefit much from the reduction in cost. Most of the benefits accrue to the shareholders and top managers of these organisations. This accounts for the widening gap between the high and low income earners.

While wages remain stagnant, the cost of living continues to increase. This makes life very difficult for many Singaporeans.

I hope that our top leaders will realise that this is a bad trend and that outsourcing is a source of this problem. To correct this situation, there should be a minimum wage for all workers and that the public sector should set an example by insisting on an expected standard of service and be willing to pay fair fees for outsourced work.

Tan Kin Lian

13 comments:

Createwealth8888 said...: Senior management staff are paid more and more performance bonus and that will lead them to be more focus on increasing profits for themselves.

Ordinary employees are paid wages and wages are seem as costs to the management and they will want to keep it as low as possible.

Performance bonus is not seem as cost but as an incentive for senior management staff to perform even better in cost cutting.; May 20, 2010 9:00 AM
Anonymous said...: ""This makes life very difficult for many Singaporeans.""

Good observation!!!; May 20, 2010 9:05 AM
C H Yak said...: Outsourcing also marginalise local workers when there is no "Minimum Wage Policy".

Even if local workers are not discriminated when there is exceptional economic performance, it is OK only if employers are willing to pay. However, this is just the macro view for the Govt.

At the micro-level, the local workers still suffer, because a minimum wage policy is not in place.

The Govt is happy because they could collect foreign worker levies...while our State provides little welfare to locals; and zero unemployment benefits.; May 20, 2010 9:26 AM
Anonymous said...: In the past, our office cleaning ladies are mostly elderly locals. Nowadays, I see alot of younger mainland Chinese ladies taking up these jobs.; May 20, 2010 9:33 AM
Anonymous said...: Like the earlier post by Tan KL on restructuring, these has been ongoing for many years.

But it has never become a political issue seriously affecting the election outcome for PAP. So maybe not a majority issue.

Will it be different this time? Maybe the PAP still thinks not.; May 20, 2010 11:08 AM
Anonymous said...: Like the earlier post by Tan KL on restructuring, these has been ongoing for many years.

But it has never become a political issue seriously affecting the election outcome for PAP. So maybe it is not an issue affecting the majority.

Will it be different this time? Maybe the PAP still thinks not.; May 20, 2010 11:09 AM
Anonymous said...: Actually, it is quite scary that Singapore companies are being motivated or encouraged to tap manpower resources both from India (14b) and China (13b) - from managerial to unskilled. I foresee that home grown Singaporeans have no competitive advantage when compared to these FTs (??). Looking at it from the macro level, we might be doing the right thing to keep ourselves competitive. But at the micro level, we are the victims of our own success. That could probably explain whey many Singaporeans choose to quit and leave the county.....; May 20, 2010 11:27 AM
Anonymous said...: eh so 巧, some friends were just talking about the f**ked up service std in Spore these days :)

http://recruit-ong.blogspot.com/2010/05/moving-backwards-20-years.html

recruit ong; May 20, 2010 11:47 AM
Anonymous said...: """In the past, our office cleaning ladies are mostly elderly locals. Nowadays, I see alot of younger mainland Chinese ladies taking up these jobs.""""

Locals "don't mind" to suffer for the good of the "big picture"???!!!; May 20, 2010 12:31 PM
singaporean said...: senior singaporeans are fat and eat too much.
They loiter at coffee shops or food courts and watch the world go by
They refuse to go for training because they claim it is a waste of time, and also claim that there sgould be guarantees of work after the training.
They sell en bloc and spend the $$
They depend on their kids and Gov
They are not creative and lack inspiration to drive themselves
they blame the Gov for all their ills.
They queue up to gamble on soccer,horses and toto
They eat & eat all day long.

they attend shareholder meetings not to understand the business but to eat.
they drive 100km just to fill their petrol tanks
they demand excellent service but are rude themselves
they want cheap and good and fast
but they want to be paid above market rates, when their wages are not cheap and they are not good and they are not fast... except to go and eat.; May 20, 2010 9:15 PM
Anonymous said...: The way I see it.

Outsourcing has its pros and cons.

Pros. Work will be able to be done at a cheaper cost. Foreign workers who are staying here will contribute demand for rental. Economic competitiveness maintained bec we are not too expensive.

Cons. Loss of work for locals. or reemployment at lower wages. Locals may be unable to afford some basic items due to low wages.

The call to work by the government may be hollow due to workers being unable to be employed. This leads to very little savings in their hands.

Aid by the various agencies will last for only a few months while they may be permanent unemployment.

This, the present day government will have to take note. Otherwise they risk a massive protest vote.; May 21, 2010 10:17 AM
Anonymous said...: I wonder what would happen if Apple were a singapore company.. would we insist on local workers for them?

Would we kill singapore Apple company because they had outsourced iPhone production to China?

I wonder whether Creative Tech has outsourced some of their work... Maybe we should find out and put Mr Sim under some pressure if so.

Singaporeans fighting singaporeans... sigh

Would Apple be able to be competitive if they DIDN'T outsource?

Conspiracy; May 21, 2010 10:47 AM
foreigner said...: Protest vote?
No effect whatsoever.

Possibily there are about 20,000 PMET or other categories of people that remain unemployed. These people are not living together in the same GRC or constituency where an election contest may take place.

So, what ever protest vote that is being hoped for is going to have ZERO effect. Goes the same with land banking or minibond saga..

Change? nah..! better we change our strategies.. cant beat them, join them.. work like a foreigner with same pay and eat, sleep like them too.. do we have that courage? will it have an impact?

Sure!.. swamp all agencies with request for similar jobs that foreigners do but ask for 10% lower wages.. do not eat at food courts, do not buy new uniforms for kids, do not buy cars, do not spend anything above $10.
Dress like Phua Chu Kang.; May 21, 2010 1:05 PM