Competition Commission Of Singapore Should Not Have Prosecuted Employment Agencies

This letter was published by TODAY on 31 October 2011.

I refer to the letter 'Say No to Cartels.' by Mr Francis Zhan. One of the reasons for the Competition Commission of Singapore (CCS) to prosecute the 16 employment agencies is that salaries should be determined by market forces, rather than 'collusive agreements between competitors.' (The Straits Times 1st October 2011) However, our argument is that the market is already distorted to begin with because of current policies which restrict their entry and depress their wages. While Mr Zhan is right to assert that free market distortions occur in every employment sector, the examples he cites in his letter do not relate to workers' wages, and this is the crux of the issue.

Setting a benchmark for wages is something practiced in many countries around the world, where there are mandatory minimum wage standards and unions to bargain for better wages. The underlying rationale for such a practice is that persons should be guaranteed fair and reasonable remuneration for their labour.

If the CCS was prosecuting the employment agencies for colluding to raise the placement fees charged to employers and domestic workers, its decision may be justified. On the contrary, the decision was made based on the agencies' attempt to raise the salaries of domestic workers. Unlike other workers, domestic workers in Singapore do not have the right to form unions to seek better pay and working conditions. Until domestic workers are unionised and laws which guarantee better employment terms are passed, CCS should not discourage initiatives to ensure better wages for them. In arguing for a level playing field for consumers, as Mr Zhan has done, we should not forget that domestic workers are also customers of an employment agency.  

When the CCS reduces the wages of workers to 'prices' that are 'fixed' for the global market, it is in effect commodifying their labour. Migrant workers are not goods to be traded and sold. It is precisely because we view them mainly as economic units that their working conditions have seen little improvement and they continue to be exploited and discriminated.