Citizenship Doesn’t Entitle You to a Job

IF THERE are Singapore Airlines (SIA) pilots thinking they will automatically be first in line for jobs at ValuAir, they should think again.

The budget carrier that's being spearheaded by a former SIA stalwart won't be in the air for some months yet, but SIA pilots should by now have drawn a lesson from the pay dispute that's been referred to the Industrial Arbitration Court: Never assume citizenship has its privileges where the market is concerned.

Pilots' pleas for SIA management to retrench its 120 overseas-based pilots first before considering drastic wage cuts for local pilots have cut no ice, and rightly so.

The reason is not simply that passengers around the world want cheaper flights and airlines need to cut costs to keep their share of these more cash-strapped passengers.

Neither is it just that Western airlines are aggressively restructuring, and in the words of Deputy Prime Minister Lee Hsien Loong, SIA is 'going to be left high and dry and in serious trouble' if it doesn't 'move early'.

The bigger reason is far more serious: More and more white-collar jobs are now going the way of blue-collar jobs. That is, they are being exported to lower-cost countries.

It used to be mostly assembly-line and sweat-shop jobs that moved to places like India and the Philippines. Now, it is also jobs like accountants, software designers, financial analysts and radiologists.

A report in the June 23 issue of Fortune magazine gives some chilling figures. In the United States - the richest and most advanced economy in the world - it is projected that the number of white-collar jobs going overseas will rise from 0.1 million in 2000 to 1.6 million in 2010, and double again to 3.3 million between 2010 and 2015.

Indian radiologists based in Bangalore now analyse CT scans and X-rays for American hospitals, at half the American cost. Indian accountants do tax returns for Americans, also at half the cost.

'It's amazing how good they are,' Mr Alan Kline, Ernst and Young's director of tax operations in America, is reported as saying. 'There's no question (hiring these offshore workers) has allowed us to lower prices in the US and capture market share.'

And these are not sub-contract workers, but full-fledged Ernst and Young employees, with MBAs and all - only housed thousands of kilometres away in India.

Two factors make the arrangement workable: technology, in particular the Net, and the common English language. What more the airline industry, in which technology and language are even more homogeneous and unified worldwide?

In fact, pilots should know better than most that they are easily substitutable. SIA was hiring foreign pilots long before Singapore began producing its own.

There's also a lesson to be learnt from Ryanair, the first successful European budget airline.

How did Irishman Michael O'Leary turn it around? 'He refused to recognise or negotiate with unions... and in 1998, in Dublin, he shut out baggage handlers who were demanding better conditions,' says an article in the June 21 issue of the Financial Times.

In addition, a typical Ryanair pilot flies 'about 80-90 hours a month, close to the 100 legal maximum and about twice the British Airways equivalent'.

In comparison, SIA's Singapore-based pilots fly 900 hours a year, or about 10 per cent less than Ryanair's. SIA's overseas pilots are not covered by the same agreement, and work up to 1,000 hours a year.

'SIA pilots have become the byword for the self-entitled Singaporean. The ship is sinking, yet they are still complaining the air-conditioning in their cabin is not working,' my colleague quotes one of her contacts, a headhunter, as saying.

But it's not just pilots who should be worrying about their jobs. Here in Singapore, other white-collar flight is as much of a threat as it is in the US.

Retrenched lawyers, accountants and engineers are a dime a dozen. The recession is part of the cause, but the other simple reason is that companies can get equally qualified lawyers, accountants and engineers elsewhere.

Even if the job doesn't leave these shores, what is equally threatening is a non-Singaporean coming in to fill the same post - at much lower cost.

A top local lawyer says: 'I can get plenty of Malaysian lawyers - hungry and cheap.'

How are Singaporeans to respond?

Anecdotal evidence suggests that many have yet to appreciate the way the cookie is crumbling. Many among the white-collar retrenched still like to think that their joblessness is temporary, and that things will return to the halcyon days of the mid-1990s.

Many have been able to draw upon savings accumulated during those days. They use this down time to pursue post-graduate degrees, dabble in business, or become full-time housewives to give 'quality time' to their children.

These options are not wrong, of course. What would be wrong is if they are choices made while in a state of denial, and if they lead to calls for job-market protectionism.

Members of Parliament have many stories to tell of professionals who should know better urging them to call upon the Government to limit the number of foreigners allowed into Singapore to work, because, as they argue, citizenship ought to have its privileges.

What is happening to SIA pilots, and to white-collar workers in America, should serve as fair warning.

As the Fortune article says: 'Trying to stop those jobs from going elsewhere may be as dubious an exercise as using tariffs to protect the steel industry... The answer lies in adaptation rather than stagnation.'