Artificial intelligence technologies are creating new economic opportunities in Singapore. By transcending the city’s limited manpower, AI boosts Singapore’s industrial production, optimizes customs facilitation, generates new jobs and fosters innovation.

Economic shifts and vulnerable workers
While many in Singapore will benefit from the adoption of AI technologies such as automation and robotics, others will not. Low-paid migrant workers, who have long been crucial to the country’s economy and relations with neighboring countries, are particularly vulnerable to job losses. As AI automation redefines value and expertise, these workers, often seen as expendable in the world’s most expensive city, face increasing challenges.

Concerns about job security in the age of artificial intelligence are widespread. However, Singapore’s ambitions for global leadership in AI have led to efforts to upskill and future-proof its workforce. Since 2015, Singapore’s proactive SkillsFuture Initiative has provided citizens and residents over the age of 25 with subsidized access to thousands of courses and job transition support. In 2023 alone, approximately 520,000 people participated in training programs supported by the initiative, making Singapore’s workforce the fastest in the world to adopt AI skills.

Inclusive workforce development and the exclusion of migrant workers
Singapore’s lifelong learning initiatives have been praised for their inclusive workforce development. The SkillsFuture grants will be increased for those traditionally disadvantaged in digital adoption, including older professionals and people with disabilities. However, the exclusion of migrant workers from these programs poses a challenge to Singapore’s stated commitment to inclusivity. Many of these workers already have significant debt due to the basic training and certification costs required to work in Singapore, let alone the additional costs of developing digital skills.

Without careful regulation, AI will widen the socio-economic divide between workers in Singapore and the entire region. Singapore must evaluate its responsibilities in the transnational division of labor as it sets an example for AI adoption. The challenges AI poses for low-wage workers in the region need to be included in Singapore’s domestic and foreign policy discussions.

Impact of Artificial intelligence on migrant workers
Of the city-state’s 1.4 million foreign workers in 2019, 999,000 were low-paid work permit holders. Attracted by the prospect of higher wages, workers from South and Southeast Asia are migrating to Singapore for positions in construction, manufacturing, shipping, services and domestic work. Migrant workers fill crucial gaps in jobs considered undesirable by Singapore residents, accounting for about one in three low-paid service jobs. This scheme helps Singapore maintain a stable unemployment rate by hiring migrant workers when needed and sending them home when not.

The COVID-19 pandemic has exposed the exploitative nature of this cycle. Due to economic uncertainty, border closures and spikes in xenophobia, foreign workers were among the hardest hit by unemployment. At the height of the pandemic, 181,500 foreigners in Singapore lost their jobs, far more than foreign unemployment during previous financial crises. Tighter restrictions on foreign work permits forced many migrant workers to uproot their lives and leave the country. During this period, “low-skilled” foreign workers were responsible for 76 percent of job losses.

Technology adoption fueled by the pandemic could make some of the job losses permanent. A joint study by Microsoft and IDC Asia Pacific found that almost three-quarters of Singapore companies have accelerated their pace of digitalization as a result of COVID-19. Singapore has also increased the deployment of AI-powered robots, especially in sectors typically occupied by migrant workers. To keep pace with these changes, Singapore needs an estimated 1.2 million additional digitally skilled workers by 2025. As a result, many more people will be forced to leave Singapore’s workforce.

Addressing the impact of AI on migrant workers
Oxford Economics estimates that each new industrial robot displaces 1.6 manufacturing jobs, with less-skilled regions doubly affected compared to higher-skilled regions. As the second most robot-dense country in the world, Singapore faces significant socio-economic impacts from robotics. With 730 industrial robots per 10,000 employees and an annual average increase of 27 percent since 2015, manufacturing employment in Singapore has declined every year, despite industry growth. This inverse correlation highlights a shifting appreciation of manual labor.

AI could further dehumanize and devalue the contributions of migrant workers in Singapore, leading to lower wages and poorer living and working conditions. Migrants from India and Bangladesh earn one-sixth of the average salary in Singapore, and during the COVID-19 pandemic, segregated dormitories for foreign workers have been internationally criticized for their deplorable condition.

Regional implications
The changing demand for labor in Singapore also has consequences for neighboring countries. According to economist Walter Theseira of the Singapore University of Social Sciences, unemployed migrant workers bring with them the social costs of unemployment when they return home, exacerbating problems for even poorer populations in the source countries. Work experience in Singapore can give former migrant workers an advantage in the job market in their home country, potentially displacing those who never had the money or opportunity to leave.

Socio-cultural and policy recommendations
The first change is socio-cultural. As AI automation redefines productivity, it is critical for Singapore to separate an individual’s economic contributions from their personal skills and success. One in five migrant workers are employed as foreign domestic workers, making an invaluable contribution to the care of Singaporean families, despite little economic recognition or compensation for their labor.

The terminology of “low-skilled” work devalues ​​the social and occupational contributions of Singapore’s lowest-paid workers. A focus on efficiency can distort perceptions of what it means to be human and Singaporean in the digital age. Rethinking labels such as ‘low-skilled’, ‘semi-skilled’ and ‘high-skilled’ can reverse the inhumane attitude towards foreign workers and promote a more constructive relationship with AI.

Second, Singapore should push to secure the rights of AI-affected migrant workers in Southeast Asia. Establishing a buffer period during which displaced workers can find new employment before deportation and establishing an ASEAN-wide standard could help protect workers across the intra-regional labor market.

Furthermore, Singapore must lead research efforts to investigate the impact of AI on job losses and skills demand in the region. Regular reports on these trends can prepare integrated economies for potential labor supply shocks and inform individuals on how to increase their competitiveness in line with the bloc’s long-term digital economy goals.

Singapore will undermine its commitment to narrowing the development gap among ASEAN member states and leading the adoption of inclusive AI if it fails to address its role in the oncoming wave of transnational unemployment. The global push for AI regulation is an opportune time for Singapore to implement reforms for ethical, responsible and mutually reinforcing labor migration.

While these initiatives might benefit worker-sending nations more than Singapore, taking leadership on ASEAN-wide labor rights could signify that Singapore recognizes the contributions of foreign workers to its success. This could enhance Singapore’s relationships with its neighbors, address past controversies regarding worker rights violations, and position Singapore as a leader in ethical AI adoption.

Conclusion

As Singapore integrates AI technologies across its economy, the rights and future of low-wage migrant workers will become an increasingly pressing issue for Southeast Asia. The international community must pay attention to how Singapore’s decisions set a precedent for AI in the global labor landscape.