Two groups comprised foreign nonresident labor in Singapore. The majority were unskilled work-permit holders who could only enter and work in the country if their prospective employers applied for work permits for them. Skilled workers and professionals on employment passes comprised the other group.
Work permits were for a short duration with no guarantee of automatic renewal. Malaysia, particularly the southernmost state of Johor, was the traditional source of such workers. Singapore's tight immigration policy was relaxed as early as 1968 to allow in these workers. At the peak of the economic boom in 1973, noncitizen work-permit holders reportedly accounted for about one-eighth of the total work force. Large numbers of these "guest workers" were repatriated during the 1974-75 world recession because of retrenchments, particularly in the labor-intensive manufacturing industries.
With the tightening of the labor market in 1978-79, it became more difficult to fill less desirable jobs with domestic labor or labor from Malaysia, which also had a tight job market. Foreign workers were then recruited from Indonesia, Thailand, Sri Lanka, India, Bangladesh, and the Philippines. By 1984 workers from South Korea, Hong Kong, Macao, and Taiwan were being allowed in, on the basis that their Confucian cultural background might enable them to adapt more readily than immigrants from other cultures.
The increase in foreign workers was remarkable; by 1980 they comprised 7 percent of the total compared with 3 percent a decade earlier. No figures on foreign labor were published after 1980. According to the 1980 census, 46 percent of the foreign workers were in manufacturing, 20 percent in construction, and 9 percent in personal and household services. The recession led to a repatriation of some 60,000 foreign workers in 1985, two-thirds of the total employment decline. The foreign worker levy was raised to S$250 per month in July 1989, and the maximum foreign worker dependency at the firm level was reduced from 50 percent to 40 percent. Both measures were designed to encourage firms to speed up automation of labor-intensive operations in order to reduce reliance on foreign workers.
Data as of December 1989