Jake's View

Tsang mistakes full employment (good) for a manpower shortage (bad)

Financial secretary reveals little behind his reasoning as he mistakes full employment (a good thing) for a manpower shortage (a bad thing)

PUBLISHED : Wednesday, 19 February, 2014, 11:19am
UPDATED : Thursday, 20 February, 2014, 12:46am

"I believe everyone in Hong Kong has noticed that we are facing shortages of manpower …"

John Tsang Chun-wah,

Financial Secretary

Everyone does not include me. Take me out of it. I do not believe that shortage of manpower is something that really exists in economic terms.

Shortage of manpower is what you have when there are no fire hoses to put out a house fire and the bucket brigade is not long enough to stretch from the pond to the house.

To speak of it in economic terms is to assume that there is likewise a pressing, unquestionable task that an entire society must perform and, more than this, that there are not enough people to perform it.

But what is this task for which Tsang sees such a shortage of manpower?

Employers … favour [bringing] in just enough competition … to keep wages down for HK

If it is as urgent and indisputable as putting out a fire, why can he not tell us what we must so desperately do?

In fact, Hong Kong society, just like any other, is almost always divided about the directions that public initiatives should take and about how much effort should go into them. Tsang speaks for no unanimous opinion or even a majority.

This is not to say we have no common goals. We are all agreed on the need for good housing, good medical care and good transport facilities, to name just a few things. But they require effort, and we have to weigh the benefit of what we get against the cost, which is not always easy.

One way of rendering it easier is to institute poor pay for the people who make these things and perform these services for us. This would give us what we want at low cost, and we could thus have more of it.

But stop. The people whom we would pay so poorly are also us. All we would do this way is divide society more sharply into a few haves and many have-nots. These have-nots might see lower prices for housing but, with lower incomes, their housing aspirations would be as unattainable as ever.

I shall not accept the cop-out here that low-cost public housing gets around this difficulty. It still must be paid for, and the burden of taxation, through whatever route it takes, always lands most heavily on the shoulders of the working poor.

We can, of course, always adopt the Dubai model. We can bring in people from the Philippines and Indonesia to do all the dirty work. They will take starvation wages, and we can ship them back out again if we don't want them any more.

The problem with this, however, is that if we do it in quite the wholesale numbers required for all the jobs we want to keep low paid, then we would have not labour imports but ethnic migration. Hong Kong would become a province of the Philippines.

The solution that employers thus favour is to bring in just enough competition from low-paid labour migrants to keep wages down for Hong Kong's own working people. Listen to the restaurant keepers and construction bosses pleading the government for it.

And now just listen to Tsang being swayed by them with his talk of a shortage of manpower.

What he actually has at present is a full-employment economy, which economists regard as an ideal state of affairs.

In these circumstances, wages rise faster than inflation, and the whole structure of the economy adapts itself to climbing another rung up the development ladder.

Pointless jobs vanish, income distribution becomes more equitable, and people live better. It is the reward that a successful economy pays those who made it successful.

It may mean people eat out a little less and that petrol stations all become self-serve, but that's a small price to pay.

There is one thing, however, that you never have in all this. You never have a manpower shortage. All you have is an economy putting out signals on coming pay trends by changes in the nature of paid work.

And Tsang doesn't want it. He wants us to crawl back into our past and suppress wages by bringing in labour migrants. That's what he means when he complains of manpower shortages.