February 11, 2021

As part of the monthly “Ask NUS economists” series in The Straits Times, Mr Chua Yeow Hwee and Dr Kelvin Seah (NUS Department of Economics), together with Professor Ivan Png (NUS Business School), analysed the relationship between the average monthly wages of local and foreign workers in Singapore’s food and beverage (F&B) industry during 2016. Their findings indicated a less pronounced negative relationship between the wages of local workers and ratio of foreign workers compared with 2011.

Simply put, the wages of local workers were higher in 2016 in comparison to 2011 despite the proportion of foreign workers hired in the company being similar to 2011. In particular, Mr Chua, Dr Seah, and Prof Png found that in 2016, among businesses that employed 40 percent foreign workers, the average local wage was about $1,600 per month. This was up from $100, or 7 percent higher than in 2011.

However, the article noted that more research is still needed to uncover the degree to which changes in wages of local workers are directly influenced by differing aspects of the foreign worker policies. These could range from foreign worker levies, quotas, or even the local qualifying salary threshold for local workers.

In sum, the study was able to conclude that tighter foreign worker policies could effectively raise wages for local low-wage Singaporeans.

Read the full article here.