Help the unskilled, or help the businesses?


So I was having Popeyes (y’know…Louisiana Fried Chicken) last night with Edmund.


We sat, he ordered and we ate.


In between mouthfuls of fatty goodness, a staff marched up to the table adjacent to us and hastily cleared a mess of chicken bones and oily paper plates. His name tag spelt “Junaz Alvarez”. (obviously not his real name, but you get the point)


Edmund raised an eye brow at me with a look that spoke of smugness.


“Make wages higher, right? Review employment act right? But look at who benefits!” hammered Edmund with amplified sarcasm.


Let’s stop the story here for a moment of thought.


The statement that Edmund expressed must have been made on thousands and thousands of occasions many, many times. It is a question that begets other questions, for example:

  • Are local unskilled/low-waged workers under employed?
  • Does foreign competition accept a salary so low, depressing wages even further?
  • And if both questions above answer “yes”, then is it the job of Government to enforce the hiring of locals, or restrict the in-take of low-wage earners so much, that companies find it difficult to hire?


To answer the third question, one must understand what the country ought to do:


  • Do we want to help more unskilled workers get jobs easily?
  • Do we want to help employers lower costs?
  • Or should we help unskilled workers upgrade, so that more industries are available to them?


One school of thought says: instead of chasing low-wages, the labourer should be building up on skills to get higher wages. Another group would argue that our elderly (our previous article explained why most unskilled are elderly) shouldn’t even be working and should be subsidised by universal state welfare.


These are difficult thoughts. However, we feel that economics of any country ought to be about helping people make choices. If this foreign labourer is in town, his/her presence must increase opportunities for the rest of society.


Imagine Singapore had just shrunk to the size of Pulau Ubin. In this imaginary Singapore, there are only 3 people living here and 3 jobs available: a taxi driver, a hawker and landlord. Now, a new immigrant arrives in town, and he takes the job of driving taxis…. at a much lower rate. The original driver, now squeezed for salary, decides to switch lines. He now opens a shop selling goods from the immigrant’s original country. Now there are 4 jobs in imaginary Singapore, and the landlord has a new person to rent to.


But of course, in the real world, there is also political karma to face. Immigrant labour is seldom welcome, in any country. Policy makers cannot expect the citizen at large to welcome competition with open, loving arms. Any decision, no matter how logical, how well thought out, is surely to make someone worse off, either real or imaginary.


This is less of a matter about helping Popeyes earn a profit easily, or helping old Uncle Tan find employment. It is a more a matter of how many more Uncle Tans can earn a better salary, whilst keeping Popeyes financially strong. And in this choice, the foreign labourer may have been a misunderstood demon.


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