I got to admit that I love Bollywood and being forced to
stay at home and having access to Netflix has allowed me to catch up on a few
Bollywood movies. The smattering of Hindi I’ve been able to pick have come from
watching Bollywood movies.
Anyway, I watched Aiyaary, where there was a scene about an
incident in Kashmir (the long-disputed sore in Indian-Pakistan relations). In
this scene, the younger character asks his mentor, “There are intelligent and
capable people on both sides. Why is it that we can’t solve the problem?” The reply
of the older character replies, “Kashmir is an industry,” and he goes onto
explain that too many people on both sides are making money from the problem. He
then let’s his protégé understand that, “When you’re making money from a problem,
you safeguard the problem instead of solving it.” The dialogue can be found at:
This section of the movie caught my attention because the
world is going through a lot of problems. We have a global pandemic, the depletion
of natural resources, climate change and now there’s racism in much of the Western
world. Old conflicts like Kashmir and the Israel-Palestine issue seem set to
get worse.
None of these problems are new. These problems were
highlighted in the global media some thirty years ago and if you followed the
news in that time, you’d get the impression that these were insolvable
problems.
However, if you look at the technological advances that have
been made in that period, a sane mind would have to ask, “Why can’t we solve these
problems?” Why, for example does South East Asia and the South America get
covered in a haze every so often? The annual bout of regional choking haze
comes from the burning of forest, which is meant to clear land for cash crops.
When environmentalist complained about the ecological
devastation, the standard reply in Southeast Asia (and is now being loudly used
by Brazil’s Jair Bolsonaro) was that “the poor world needed to feed people,”
and the subtext was “even if it pissed off Western environmentalist,” who were
merely imperialist trying to keep us poor.” While this might have been the case
in the 1960s, why does this have to be the case in 2020? You’d imagine that we’d
have found a way to substitute palm oil in certain products or found a way for
farmers to clear land that didn’t kill off the rest of us.
Unfortunately, it’s not been in anyone’s (or at least the
people who count) interest to find a solution. The plantation owners keep poor
people busy and politicians have been convinced that its in their interest to keep
the plantation owners happy.
Here in Singapore, there’s the issue of foreign labour,
which has become an issue now that Covid-19 has exploded in foreign worker dormitories.
Suddenly, Singapore’s media has shifted its focus on the condition of foreign
workers and there have been letters galore about the need to rely less on
foreign workers.
True to form, the industry has hit back and there have been a
number of letters from “industry” groups, which called for any cut to the supply
of foreign labour to be “short-sighted” and detrimental to the economy. One of
the most prominent forum letters can be found at:
https://www.straitstimes.com/forum/forum-call-to-cut-number-of-foreign-workers-here-is-short-sighted
The argument against having more foreign workers is
unfortunately the same as it is the same argument against any basic improvement
to the welfare of foreign workers – namely less foreign workers like better foreign
worker welfare will increase the costs for employers who will then have to
charge more and make everything more expensive for us, the consumers.
This argument has been used very effectively to dodge
solving the actual problem, which is the fact that employing a foreign worker
is not actually cheap for employers nor does it give foreign workers the money
they thought they’d have but the system benefits a host of other parties like labour
suppliers, dormitory operators, labour agents and repatriation companies. Any
disruption to the system will inevitably upset a host of other people. Nobody
explains the problem better than Alex Au, who works at TWC2, an NGO for migrant
workers:
Crudely put, every foreign worker is a money spinner for a host
of parties. The government, despite its generous support for the migrant
workers in this pandemic, is in fact one of the guilty culprits. The revenue from
the foreign worker levy is a major money spinner (average of $750 per worker
per month – the stress of this being an average) for the government. However,
in addition to that, there is a quota system, which limits the number of
foreign labourers that a company can hire.
The official reason for the levy and quota is that it
reduces the price differential between foreign labour and local Singaporean labour.
The reality is that it has created a very lucrative niche called Labour Supply.
The basics are simple – hire a labourer on the cheap and then “rent” them out to
other companies that need labour but don’t have the quota. As one former
accountant for a labour supplier says, “The worker works the overtime while the
labour supplier pockets the overtime pay.”
Other laws get exploited too. There is a lucrative niche for
lawyers working on workman
compensation. All you need is to find a worker
involved in a workman compensation claim. You pay for the housing, flight
ticket and perhaps give him a bit of pocket money and once he’s gone back,
collect the workman compensation, which is inevitably higher than what you
paid.
The answer to our foreign labour problems is simple. You
just need to reduce the people in between the labourer and the employer. If you
reduce the army of middlemen, the employers can get cheaper labour and the
workers can get more money. The key parties would benefit. However, the
middlemen form an industry in themselves.
I look at the situation with maids as an example. At one
time, a maid in Hong Kong earnt up to $700 a month because there wasn’t a
powerful middleman. In Singapore a maid would costs an employer around $700 a month
but the maid would only get $400 if she was lucky. The difference between the Hong
Kong and Singapore scenario is the fact that there is a levy to be paid in
Singapore.
I’ve never argued against the need for middlemen. Agents and
even labour suppliers have a role to facilitate the relationship between employer
and employee. Dormitory owners also serve a purpose in housing workers. Nobody
is saying that these businesses should not be allowed to make a profit.
What is being argued here is that the system needs to be changed so that the most important players (namely the employer and employee) get a fairer deal. The system as it is, remains a problem. It’s a choice between increased costs for employers and basic welfare for workers (which is defined as livable wages and accommodation that does not make people sick.)
Entrepreneurial thinking is needed to restructure the system
and the sooner the government bites the bullet and goes through the pain (including
losing the addiction to easy levy money), the better it will be for all of us.
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