Worker Accommodation Expenses as Percentage of Overall Cost of Employing Foreign Workers
Ministry of ManpowerSpeakers
Summary
This question concerns the proportion of employment costs attributed to foreign worker accommodation and strategies to manage escalating rental prices. Mr Yip Hon Weng inquired about five-year cost trends and government interventions to maintain affordability and living standards. Minister for Manpower Dr Tan See Leng stated that median dormitory rentals increased from $280 in 2019 to $420 in 2023, driven by inflation and high demand. He noted that despite adding 17,000 beds since late 2022, supply lags behind a significant post-pandemic surge in the foreign workforce. To mitigate this, the Ministry of Manpower advises employers to implement productivity measures or develop their own temporary housing facilities.
Transcript
48 Mr Yip Hon Weng asked the Minister for Manpower (a) what percentage of the overall cost of employing foreign workers can be attributed to foreign worker accommodation expenses; (b) whether data can be provided on the magnitude of the increase in accommodation costs for foreign workers over the past five years; and (c) how will the Ministry address the escalating cost of accommodation for foreign workers to ensure affordability of construction projects, while maintaining decent living conditions for the workers.
Dr Tan See Leng: The Ministry of Manpower (MOM) only tracks the rental rates for commercial dormitories licensed by MOM and not the cost of other types of migrant worker accommodation. MOM also does not have other business expenditure data related to hiring foreign manpower.
The median monthly rental rate of new contracts signed for commercial dormitory beds was $420 per worker in the first quarter of 2023, compared to about $280 in the first quarter of 2019. The significant increase in rental rates is due to inflationary pressure on operating costs and strong demand for dormitory beds resulting from employers hiring more foreign workers as the economy recovers from COVID-19.
The Government has worked with the industry to increase dormitory bed supply with the addition of nearly 17,000 beds since December 2022. However, the number of foreign workers in the Construction, Marine and Process sectors as of May 2023 was 18% higher than pre-COVID-19 levels and 35% higher than in January 2022 in the early days of the economy reopening. This is a significant increase and increased dormitory bed supply has not kept up with the demand surge. We urge employers to adopt productivity measures to reduce their reliance on foreign workers or consider applying to build construction temporary quarters and factory converted dormitories to house their workers. This will ease the pressure on accommodation costs.