Jake's View

Sunday, 25 August, 2013, 5:24am

Greed, not need, drives call for more foreign workers

Jake van der Kamp

BIO

Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

One of Hong Kong's most influential business groups is working on a proposal calling on the government to allow an influx of foreign workers - warning that it is the only way to solve the city's labour shortage.

South China Morning Post
August 21

For starters, I have a slight quibble with the General Chamber of Commerce's numbers on unfilled job vacancies, the reason it is now calling for the doors to be opened to labour migrants.

According to chief executive Shirley Yuen, there were up to 110,000 vacancies last month. The government, however, has only published vacancy figures up to March and the figure then was 76,000.

The red upwards spike on the right of the chart shows what would have had to happen to make both numbers correct. It seems unlikely to me.

It seems all the more unlikely given that the labour force rose by 30,000 people over these four months. The participation rate has surged recently.

But I think this question is best approached from a different angle. I went to see my optometrist in Melbourne House the other day and on the ground-floor lift lobby observed three men employed to stand by the lifts all day long and motion people in.

Here is my question: How does it happen that one of the world's wealthier economies - with a gross domestic product of US$38,000 per capita, about the level of the Britain's - makes such poor use of its working people?

I have never seen this sort of thing in Britain. I have, however, seen plenty of examples of it in Hong Kong. It is what I expect to see in a basket-case economy. Why does it still happen here?

I shall answer that question for you. It is because until recently, our government regularly fell over when it was pushed by employers to keep wages down by bringing in more labour migrants.

I think it is finally becoming apparent to our bureaucrats that this is the wrong way to go, that it brings ever widening income polarity to our society, that it acts as a disincentive to acquiring job skills and that it slows down our economy's progress to a higher level.

Yes, we always need to bring in certain skills, but when it means that we look to Sri Lanka first for construction crews and the Philippines for shop clerks, then perhaps we are taking things too far. What is wrong with Hong Kong's own people?

What is wrong, say employers, is that they want too much money and there are not enough of them. What is more, they won't take dirty jobs unless they are paid even more.

Exactly, and just what is wrong with that? If Hongkongers have worked to make themselves rich, why shouldn't they enjoy their riches? Why must they dilute their own incomes to suit the convenience of their employers?

I am sure it is true that wages will rise rapidly if we restrict entry to labour migrants. I think it is a good thing.

I am also sure that some businesses will find conditions too tight and shut down. That is the cost of adjustment to an equitable and wealthy society. The nature of work will change. Progress is not painless.

I do not believe, however, that rising wages will lead to widespread job losses. Labour operates in a labour market. There has always been a very close inverse relationship in Hong Kong between wage increases and unemployment.

But most of all, it is just being fair to the people of our city. Those lift attendants in Melbourne House deserve better.

jake.vanderkamp@scmp.com

This article appeared in the South China Morning Post print edition as The flaw in the call for influx of more foreign workers

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This article is now closed to comments

IRDHK Aug 27th 2013
8:12pm

If Hong Kong does not import construction workers then high speed rail, MTR expansion, new roads will be slow and extremely expensive. This will move onto property as well. Salaries will double which means private housing will become prohibitively expensive and public housing will drain public coffers.
Also it is a well known fact that the most expensive per square foot builds of housing is public housing. Per square foot it costs more.
This is because developers are very very good at keeping costs down, maximizing space and negotiation bulk purchases. The housing society due to burrocracy, overpayments, tendering rules and approved vendors is extremely expensive and is not value for money.
The one I hear the most quoted is government elevators cost double private ones due to tendering. But it is government $ so no one questions it.

Giwaffe Aug 26th 2013
11:40am

Well written, Jake. My sentiments exactly.

Raising wages will naturally increase labor supply. Those who attempt to claim otherwise are either being disingenuous or are downright incompetent. Importation of foreign labor, be they domestic helpers, construction workers, or various other workers, only serves to distort the local labor market in favor of employers. Seeing as employees outnumber employers, this distortion is detrimental to the public interest.

John Adams Aug 25th 2013
1:44pm

I must be missing something, and no I'm not being sarcastic.
So I hope that Mr van der Kamp can clarify in a follow-up article.
.
My question is this : why do we have 18% of our population below the poverty line and yet we still need to import labor ? If we import low cost labor (which is what I assume the HKGGC wants) where will they live and how will they be able to afford to live here unless their acceptable standard of accommodation and daily cost of living is even lower than the poverty line?
.
Also there's several hundred thousand mainlanders who are now living in HK legally (mostly by marriage, although there are other legal means as well) who have not yet been granted a HK ID card and therefore cannot work here, so they either don't work or else they moonlight. Why not accelerate the issuance of HK ID cards to Chinese people who are here already?
.
What am I missing ? Is the nasty fact that only imported labor will accept the really nasty back-breaking jobs like working on construction sites or digging up roads?
.
BTW: It's not necessary to have a HK permanent ID card to work here. Just a temporary ID card is sufficient, especially if it is issued freely without the prior requirement of proven employment.

Camel Aug 25th 2013
9:32pm

The 18% of the population who are living below the poverty line, I doubt that they can do or are qualified to do the jobs most employers want to fill. You mean the low end and "dirty" jobs, but those jobs nobody want to do. Even the ones who are living below poverty line.
What I am experiencing with our company is, that quality and well trained staff still needs to be imported.
For one, reason, the local market does not offer or have enough the candidates we need and fitting into the profile. Then local HKnese staff, tend to job jumping. Most of the time for only 1000HKD more at another company.
For the construction industry, you need defin. to get foreign labour as it is very hard to find HK people who wants to do this kind of job even with higher payment. This kind of job is regarded as exhausting, harmfull to your health and life shortening.
Married Mainland Chinese are on Dependant Visa and should be allowed to work in HK. I think you are wrong informed.

Giwaffe Aug 26th 2013
11:29am

I am quite certain if the wage was high enough there would be adequate workers in the construction industry. Concurrently, if construction jobs are "exhausting, harmful to health, and life shortening", then they probably need to be redesigned. I do not believe construction jobs in Sweden would be "exhausting, harmful to health, and life shortening".

megafun Aug 25th 2013
1:20pm

importation of mainland labour is NOT our solution, as this has happen in Macau, where alot of local jobs had already gone to imported labour. It creates alot of problems.
In construction, we ought to listen to sensible advice, and slow down our infrastructure projects and increase our public housing, which uses precast units - made on the mainland. Local architects and developers are still sticking to old construction, using timber formwork and non-standard designs. Do we really need all those new designs? or do we merely have them so that the over-paid architects / other profesionals can rip off the society.

Camel Aug 25th 2013
9:37pm

Hk already imports alot of foreign labours from everywhere. Domestic helpers and Expats from US, Europe and Asia. You are just against Mainlanders because they are Mainlanders.
Slow down infrastructure projects is the key for labour shortage? what a nonsense. Without modern infrastructure and well planned mantainance HK will down for sure. Also the need of more housing is obvious as only with more supply you can get prices for real estates down.

Giwaffe Aug 26th 2013
11:46am

Importation of labor anywhere is not the solution, mainland or otherwise. With higher wages (such as 40k a month), some real estate agents just might go into construction.

goncalo Aug 25th 2013
12:40pm

"The comfort of the rich depends upon an abundant supply of the poor" (Voltaire)

johnyuan Aug 25th 2013
5:47pm

The truth of zero sum. I've always looked at our problems this way. Paper money has made the mirgation quite easy. But the electronic money makes it even easier with all the consequences the world has to bear. All in your pocket and not mine.