Friday, October 25, 2019

Why engineers and tech professionals hate immigration and what can be done about this ?

Image result for richard posner radical markets

I will do a little bit of social-political blogging today.

A hot topic of the next elections is likely going to be about CECA because I suspect that Tan Cheng Bock will leverage on this issue as Heng Swee Keat is very possibly the architect of this agreement that grants free access to Indian tech professionals into our economy in return for granting Singapore banks full access to the Indian economy.

From the perspective of local engineer like myself, CECA is a game changer that kept my salary low and increased the competition and stress we have in local workplaces.  As I watched the movie Three Idiots lately, I was very impressed by India's almost divine reverence for their engineering talent. I asked myself how can our local  engineering degree holders who can get Bs or Cs for Physics / Maths A levels compete against a demigod-engineer from IIT?  The truth is they can't.

The quickest solution to the problem is to simply not be a plain engineer in Singapore.

The solution is to become an engineer-landlord.

Once I started investing, I can start to see how we can benefit directly from the flow of professionals into Singapore. As Singapore becomes more competitive, companies want to set up here, and Indian professionals also want to rent our spare homes and buy our goods. I daresay that my investment and rental gains, net-net, exceed my losses under the CECA arrangement. I even spent two happy years in Singapore Mercantile Exchange which was set up by an Indian billionaire.

But this leaves a serious problem in our society today.

Not everyone can become an engineer-landlord. There will be folks who are left behind and would want to punish whoever drafted the CECA with India.

So how can we solve the problem of allowing the man on the street to benefit directly from immigration so that we will not have a populist revolt ?

Radical Markets by Eric Posner is the first time I felt that there is some hope that a solution can be found. Here is how to adapt his ideas to Singapore :

First we have to identify a discriminated class in Singapore. To me, non-degree males are a discriminated class in Singapore. The GINI coefficient for males is much higher than females and non-degree males have a lower representation in Singapore Parliament than women or ethnic minorities.

( Only MP Charles Chong lack a degree )

I think the first solution is to align the needs of non-degree males with potential immigrants.

Suppose Beck Hock is a non-degree male working hard to raise a family in Yishun, very likely he will struggle to make his ends meet if Singapore goes full throttle into globalization.

What if we let Beng Hock sponsor Rancho, a Indian Engineer, to work for Google in Singapore ?

Beng Hock will have to interview Rancho to decide whether he will fit into Singapore society, buy insurance in case Rancho turns out to be unable to work, rent a room to him and vouch for him for a year so that Rancho can get a three year work permit.

Rancho has to pay Beng Hock a fee to work in Singapore and be his guide to local culture. From some economic surveys, Rancho will be willing to pay big money to Beng Hock for that privilege, sometimes as high as $9,000 to work here.  The process of setting a price can be an auction mechanism like COE.

A non-degree male can credibly sponsor one new immigrant every year boosting his salary by a decent $300-$500 a month, this can limit the effects of xenophobia drastically in our society. Also the vetting by heartlanders will account for things like cultural fit that cannot be reduced to a set of criteria by any government bureaucracy.

For sure, there will be problems if we implement this system in Singapore. But that's what our scholars are for.

If the government does not want immigration to smack them in next elections, finding way to allow ordinary Singaporeans to directly benefit from immigration is key to their political survival.











4 comments:

  1. This likely won't work on many levels:

    1. "Heartlander interview for cultural fit" will be thrown out the window for whoever offers the highest bid irrespective of cultural fit, and become yet another cynical catchphrase like "GST is to help the poor", "COE helps pay for MRT/bus", and "foreigners create jobs for singaporeans". LOL!!

    2. Many foreign workers aren't keen to share a bedroom with the owners of the flat. They much prefer to rent entire apartments & share among fellow foreigners (for up to $4K-$6K salaries), or to stay on their own or with their families (for those upper income).

    3. Most foreign PMETs no longer pay fees to agencies or companies at S'pore end. Sure some companies still collect kickbacks from foreign agencies but (a) it's dying out & really only for low-level staffing, and (b) any kickbacks are part of the total fees back in their home countries, and foreign workers will shop around for the most cost-effective ones.

    4. For MNCs a lot of their S-Pass and E-Pass workers are brought in under "internal transfer".

    5. India will definitely raise hell over the additional immigration measures & will point to CECA as a legally-binding agreement between 2 sovereigns .... an argument that Singapore holds dear both when dealing with other countries, as well as with its subjects internally.

    The simplest mechanism really is to impose monthly levies on all foreign workers, from Dependent Pass who are allowed to work, to P1 E-Pass.

    These levies are to be set aside & used to top up salaries of lower income, much like Workfare now. Emphasis should be for those with kids and/or above a certain age.

    While India will still kick up a fuss, it won't be as bad & a palatable quid pro quo can be negotiated.

    Workfare is designed to raise low incomes closer to the level of a "living wage" around $2K to $2.3K per month.

    This "FT bonus" can be designed to raise wages closer to the national median, for those lower income raising kids etc.

    ReplyDelete
  2. I doubt any of the suggestions from Eric Posner were implemented in practice.

    But it's a nice platform for a politician to campaign in.

    ReplyDelete
  3. Chris joining PSP ?

    ReplyDelete
  4. No man. I prefer money to power.

    ReplyDelete