Skill level, not cost of labour, should determine employability

Much has been said about the benefits of free trade in a globalised world (“S’pore to amend legislation to bring TPP into effect next year”; Nov 21).

It allows countries with certain competitive advantages to exchange goods and services where each country would benefit.

In a period of declining demand for goods and services, however, there would be less demand for labour.

For Singapore-produced goods to have a competitive advantage, the marginal product and marginal cost of labour at market price must be better than those of other countries, as labour is the main cost in the short run.

Hence skill levels would determine employability. Yet, despite the current push for productivity and the SkillsFuture initiative, some companies still rely on cheaper foreign labour to sustain business, and neglect a core Singaporean workforce, despite our highly-ranked educational system.

It would not bode well for social cohesion and stability if many companies pursue a mode of operation based on costs and not on what candidates, foreign or local, bring to the table.

Singaporeans and foreigners should be considered on merit and paid commensurately, and not be hired because a company wants cheaper labour regardless of skills.