Ong Ye Kung explains why median wage band of Singaporeans in financial sector is lower than those of PRs, foreigners

SINGAPORE - In the financial sector, Singaporeans in the middle of the income spectrum for citizens earn less than permanent residents and foreigners at the same point in their income spectra.

Monetary Authority of Singapore board member Ong Ye Kung told Parliament on Friday (Sept 4) that for Singaporeans, the median wage band is $6,000 to $8,000 a month, while for PRs and foreigners, it is $8,000 to $10,000.

In senior-level positions, about half of Singaporeans and about half of foreigners earn above $30,000 a month, while almost two-thirds of PRs do so, he said, adding that these sets of data are "as one would expect".

The reason is that financial institutions often bring in higher-earning foreigners to perform specialised, or regional and global roles. Also, Singapore's rules constrain the inflow of foreigners at the lower end, said Mr Ong, who is also Transport Minister.

This means a larger share of foreigners tend to be earning higher wages and consequently, the median would be at a higher level too.

In addition, foreigners with impressive profiles and track records in Singapore would be expected to be more successful in attaining PR status.

In other words, he said, this data shows "outcomes which reflect the fact that we regulate the inflow of foreigners, and apply selective criteria in granting PR to those who were previously foreign PMEs (professionals, managers and executives)".

"If there was no regulation to control the inflow of Employment Pass holders, and no criteria and conditions for PRs based on their track records, these earning differentials will naturally narrow or disappear."

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He was responding to Mr Louis Chua (Sengkang GRC) on the breakdown of the monthly salary for Singaporeans, PRs and foreigners in the financial sector at the 25th, 50th and 75th percentiles.

Mr Ong said such a breakdown would not be meaningful. The reason is that a foreigner and a Singaporean at the same percentile of his respective wage spectrum could be doing very different jobs and thus earning different salaries.

On Tuesday, when Mr Ong addressed concerns about whether there are enough opportunities for Singaporeans in the financial sector, he said during the debate on the President's Address that the absolute number of Singaporeans in senior roles had grown from 1,700 to 2,600 from 2014 to last year.

On Friday, replying to Mr Chua, who had asked about efforts to help Singaporean middle managers move up into senior management roles, Mr Ong said the approach should be to be open to the world and grow as a global financial centre, while investing in developing Singaporeans and working with financial institutions to do so.

"If we keep saying let's just be a lake, shut ourselves out from the lagoon, and the lagoon shut itself out from the sea, we will always be a small pond."

He added: "You can develop your middle management to take up senior positions but your market will be small."

This article was first published in The Straits Times.