F&B, retail, and construction sectors should not be given preferential treatment

Year: 2020

FMG CEO Devadas emphasises that the F&B, retail, and construction sectors should not be given preferential treatment in response to concerns by business owners in those sectors against the recent changes in S Pass qualifying salaries:

“As FMG has reiterated, the F&B, Retail and in particular Construction sectors should not be given a ‘free pass’ on tightening labour market rules. We are not in favour of their advantaged JSS category either and urge a rethink.
Why so? First, all three sectors have very low labour force productivity (LFP).

Second, on a nett of factor input basis, they have a low economic value-added contribution to the economy.

Third, the F&B sector is highly overcrowded, the Retail sector is already exposed to restructuring forces from shifts in consumer behaviors toward online shopping, and the Construction sector has resisted making capital investments in equipment, skills and process upgrading to improve productivity for decades. The reasoning that Singaporeans do not want to work in these sectors is a circular one.

If these sectors restructured, it would result in different jobs, with higher skills barriers of entry and more safe and professional work environments which would lead to higher wage levels and other inducements, which would pull in Singaporean workers.
Some of these higher costs will be passed on to consumers but most can be offset by leaner and more efficient operations.

The time for change is long past and so FMG urges the government to hold the line on its policy.”