atans1

FTs lower wages for UK locals/ Surely same here?

In Economy on 17/05/2015 at 12:26 pm

And it’s for the PAP administration to prove that FTs don’t lower our wages. All the data with the administration, not with us.

It’s not a xenophobic nut in the UK that says foreigners lower wages for locals. It’s the governor of the UK’s central bank.

The Daily Mail summarises Mark Carney’s remarks as “foreign workers drag down UK wages.

And the BBC reports: As long ago as last October, the Bank’s chief economist, Andy Haldane, acknowledged that immigration depresses pay.

He noted that one respected study, by Dustmann, Frattini and Preston, found that each 1% increase in the share of migrants in the working age population leads to a 0.6% decline in the wages of the 5% lowest paid workers.

And to be clear, the general point that an influx of workers from abroad represents a weight on the pay of the indigenous population is a statement of the overwhelmingly obvious: it is simply a version of the law of supply and demand, that the price of anything falls when supply rises relative to demand.

So there is nothing terribly revelatory in Mark Carney saying, at the Bank’s three-monthly news conference on its Inflation Report, that immigration had held down the rise in wages and living standards.

http://www.bbc.com/news/business-32739852

(Btw, he is a FT in UK. He was governor of the central bank in Canada. During the 2008 financial crisis, Canada did not have any problems in its financial sector.)

But cybernuts note: Mr Carney told the BBC’s Today programme that he would “really dampen down” the argument that foreign workers were to blame for lower productivity.

Btw2, the UK Sun has a pie chart showing that of 573,000 new jobs created in the last year, only 279,000 went to UK workers. Here we can only guess what proportion of new jobs created go to FTs and PRs.

 

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  1. There are FTs and FTrash. Anything that is plentiful & easy to import will be cheap. Conversely anything that is rare, harder to attract, and able to create much more value than its price will be expensive. Another way to express supply & demand.

    Real FTs will raise the salaries of locals IF there is national & institutionalised transfer of know-how & experience. Cheap FTrashes will simply lower salaries of locals performing similar jobscope.

    The problem is that S’pore is importing overwhelmingly more FTrashes than FTs. I estimate 60% of foreigners (S-Passes & E-Passes) are FTrashes. Another 20% are similar standard to local Sinkies. I’m not even counting those on Work Permits.

    Only 20% of foreigners are real FTs. And there is no real attempt at knowledge-and-skills transfer. Companies are happy to pay them millions-dollar salaries, and these expats are happy to clique amongst themselves, away from the dirty Sinkies and live the high life while they clock their hours in S’pore.

  2. It is not so clear that foreign workers were the cause of low productivity in the UK. A recent article said that after labour and markets have been deregulated, the thing holding back productivity is deregulation of land restrictions, a major contributing factor. Another thing, the UK exports far more services than other developed country, the so-called “invisibles” and being “invisible” productivity is extremely hard to measure. My take is that UK productivity is significantly understated.

  3. I have been reading your blog with interest for some time now. I have never commented on your interesting articles as I feel that as a British Indian chap, maybe it’s not my place to comment and more to read and understand. However, as you have referred to the UK in your article I thought I could chip in…

    1. UK is very different to Singapore and most of the foreign labour issues are concern construction and other blue collar roles that people feel are going to eastern Europeans’ and not the “Enguuurlanders”. Often overlooking the massive difference in work ethic. I believe in Singapore, Singaporeans are not too keen on manual blue collar roles and there are very few apprentice schemes so as such the argument does not apply to this area. So we can assume for our Bangladeshi bro’s the labour cost argument does not apply.

    2. Most FT’s here are apparently professionals. Whether they are a shit FT’s or good FT’s (and there are plenty of both) is not relevant. The reason I say this is that in terms of scale there are simply so many opportunities in Singapore for such a small population that the laws of supply and demand applied to compensation do not seem logical or valid and consequently I doubt there is that much of an effect on Singaporeans pay packets. I certainly do not see any effect on Singaporean pay packets as a recruitment consultant. To the contrary banks will pay a huge premium for excellent Singaporean talent. (And quite rightly)

    3. The guy above that said “, and these expats are happy to clique amongst themselves, away from the dirty Sinkies and live the high life while they clock their hours in S’pore” makes me sad. Just saying…. It really does….A solitary tear dripped down my cheek…

    4. Quoting the Sun Newspaper….Come on…seriously…..Really! Not exactly renowned for being a bastion of impartial accurate information! Can you at least stick to the broadsheets next time :)?

    OK I’ve popped my cherry for this blog and I hope that I did not offend or say anything untoward. Better get back to work…After all it’s all about productivity don’t you know….!

    • Thanks.It’s OK to offend here, so long as got reasonable facts, data on yr side.)))))

    • Your point 3. Yes it is indeed sad but it is rather closer to the truth. Once I was in a meeting to raise S$ financing via a bond issue and was surprised to be met by a bank’s pitch team consisting 3 expats from one country and just 1 Singaporean. And this is meant to be a S$ bond issue which will be distributed almost entirely to Singaporeans. Further, there is no particular expertise involve in arranging bond issues.

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