Official discusses Singapore job market effects of resort

Published On: Nov 16 2011 11:07:10 AM EST   Updated On: Dec 29 2011 03:24:19 PM EST
Resorts World Sentosa

As the Genting Group lays out plans to build Resorts World Miami, Local 10 spoke to officials in Singapore, where the company built a similar resort, about the effects on the job market there. 

"The debate in Singapore wears on," said Ong Ye Kung, deputy secretary for the country's largest federation of trade unions. "People still talk about whether it was right or it was wrong, but for me, at the end of the day, I think weighing the pros and cons, the job creation part played a big part in why we supported it." 

Ong Ye Kung met with Local 10's Christina Vazquez in a Singapore office used by the transport sector union. 

"We represent 600,000 workers in Singapore. That's about a quarter of the working population," he said. "We worried about the lives of workers because of the integrated resort. They gamble their life savings away. That's a big problem, yeah. On the other hand, we wanted to look at the jobs."

Ong Ye Kung said the trade union federation jumped into the debate to help make sure locals landed jobs and training. 

"In the case of Genting, we started a conversation with them very early to see if locals can take these jobs," he said. "At that time, when the idea first came out, it was 2003, 2004. We had just emerged from a recession, a recession caused first by Sept. 11, 2001, and then a scary outbreak of SARS that affected Southeast Asia very badly, and so those were bad times. Unemployment went up. People were fearful to spend, tourists slowing down, so it was a fearful time. 

"When integrated casinos came up, the unions, we reacted two ways. One, we never liked gambling, but at that same time we know it creates a lot of jobs, so we went through a period of trying to weigh the pros and cons. So at the end of the day what came out is a proposal that I think got the major support of the union because it wasn't just a casino but it was an integrated resort. When I saw the model for the first time, I was astonished. The casino is one corner of the entire development. The rest of the development are parks. There is Universal Studios. It was the largest aquarium in the world. There are hotels, restaurants -- many, many, other jobs." 

Ong Ye Kung explained how in Singapore companies have to hire a certain percentage of locals before they are allowed to hire foreigners.

"It's what we call the Singaporean First Policy. If you hire a Singaporean, then it entitles you to hire foreigners," he said. 

He said the percentage varies by industry: "Like construction, they will have a higher quota because it is a job that Singaporeans will tend to avoid because it involves working in the sun, hard labor work, so the quota for foreigners is higher, but when it comes to service job the quota is a lot tighter." 

He said the Genting Group at Resorts World Sentosa exceeded its service job quota, hiring 70 percent from the local workforce and paying above the market rate.

Of the jobs at Resorts World Sentosa he said about a quarter were managerial jobs. 

"I would say easily Resorts World was paying 20-30 percent more than the prevailing market rate, and so we start to be able to hire people who are in low-wage jobs, minimum-wage jobs and channel them, tell them, 'Why don't I retrain you with new skills and you can move to the integrated resort and provide a better life for your family.' We were not just absorbing the unemployed. We were moving people from low end jobs to better jobs in the integrated resorts," he said. "Now, even today, I think that the integrated resorts have set a benchmark for better pay, and that has had an impact on the rest of the industry, so if you want to keep your workers and not have them run to Resorts World Sentosa, you can up your pay, as well, train them better, treat them better. And so we maintained a tight labor market even during a global financial crisis" 

At the time Singapore was deciding to allow integrated resorts, Ong Ye Kung said Singapore's unemployment was around 4.5 percent. It is now at 2.1 percent.

 

"It's hard to quantify, but I'd say integrated resorts contributed to that tight labor market in three ways," he said. "One is direct employment, which together adds up to about 20,000 jobs.  Second is the indirect employment because there are suppliers, there are maintenance people, there are contractors, and that I would say is easily another 20,000-30,000 jobs. And third is a secondary factor, which is the fact that integrated resorts are here together with the Formula 1 racing, with the other attractions that are coming to Singapore -- concerts, exhibitions -- add to a certain buzz that really make our tourism sector prosper and boom over the last few years, and that has created many other jobs. Today, our hotels are mostly full, running 80-90 percent occupancy rate, and so I think all this is contributed in part by the integrated resorts."

"From a complete jobs perspective definitely, definitely, it helped a great deal during the global financial crisis to help us absorb unemployment and to help workers affected by pay cuts to move to a better job, that's one," he said. "From a tourism perspective, long-term perspective, it is putting Singapore on the map of the world tourism destination and it is very good for the tourism sector. The debate continues. The debate continues. There have been many Singaporeans who feel strongly against independent resorts and casino gambling. There will always be that, but it is already here." 

"So it sounds like when you say the debate still continues, it's almost a philosophical debate?" Vazquez asked. 

"It is social versus economic -- the social cost versus the economic benefit," Ong Ye Kung said. "It happens, especially in my union here, transport sector; many of them like to try their luck. And every case of a broken family, of someone gambling their savings away, is one case too many, one case too many. When you are talking about children and families, even a small number is one case too many. Every case is one case too many." 

"Does that lead to any regret in your mind?" Vazquez asked. 

"For me, well, we assume leadership position in the union. We look at the whole picture. We are put here to wrestle with such pros and cons, to wrestle with such dilemmas," Ong Ye Kung said. "At the end of the day, the long debate, soul searching, weighing the pros and cons, we come to a certain position. We go all-out to realize the benefits of that project, and that's what we live with." 

"But do you think it was the right decision?" Vazquez said. 

"I think it was the right decision, on the whole -- on the whole," Ong Ye Kung said. "But having said that, speak to any family that's been affected. They will tell you the wrong decision. You will never be able to convince them otherwise, and we have to understand that." 

Ong Ye Kung also talked about how labor training works in Singapore and specifically the Genting Group at Resorts World Sentosa in Singapore:

"The government of Singapore had a long tradition of funding training, especially retraining to help the worker convert from one sector to another. I think that's the policy thinking because we are very small in a globalized world. Activities come in and out of Singapore quite quickly, and our workers have to be quite flexible, adaptive, switch from one company to another, switch from one industry to another. Today, you are a childcare teacher. Tomorrow you are a nurse. The day after you might be a manager. So the government had been funding such skills conversation training, to help people adjust. 

"It was a public, private, union partnership. The government funded the training cost. They also quality-controlled the courses, to make sure they were sufficient, good quality. The private sector, in this case Resorts World, paid for the in house training that is relevant to the specific needs of the operation and the labor union. We are the market maker. We bring the employer together, we bring the worker together, we put together all the funding and we package it for the workers. So it was a three-way collaboration. 

"After we did all this collaboration with Resorts World, we approached Resorts World and said, 'Since we did all this, how about we take our courtship a stage further and in engagement mode and unionize the company?' and the company said yes. So today, of 7,000 rank-and-file workers 4,000 are union members."