Working 365 days a year

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Singapore last week passed a law which will go into effect next January, requiring employers of maids to give maids at least one day per week of leave. Currently leave is agreed between employer and employee, and it is quite common for maids to be given no days off per week and little or no annual leave. Some employers are concerned that the new law will see maids conspire together to request better conditions (!) or get pregnant, or find some other unproductive way of enjoying their excessive leisure. So how bad is life for Singaporean maids? Not as bad as for some Singaporean construction workers. Once again, employee protections are weak – it is possible for a constuction company to employee workers from Bangladesh through an agency, who keeps the employees salary for up to 3 years as an agency fee. If the employee gets injured that lengthens the time taken to repay the agency fee, assuming that the worker is able to work again. Typical salaries at the completion of the bond period might be in the order of A$5000 to A$8000 per year.

Of course Australians would not accept these kinds of working conditions for workers in Australia, but it does raise the issue of whether, as suggested by China’s Ambassador to Australia, Australia should accept 100,000 chinese (or other international) workers to help build the infrastructure that Australia is so in need of. Quite clearly working conditions in many parts of Asia are very poor, and even what would be considered as the most basic working conditions in Australia would be considered as extremely attractive to many millions of workers in Asia. One of the most robust debates I’ve had with my students over the years has been about income distributions – should we care about the distribution of incomes of global citizens, or the distribution of income across or within countries. Singapore’s policies might seem harsh, but there is no doubt that they reduce income inequality globally, at the same time as widening the distribution within Singapore.

So should Australia offer say  200,000 three year work visas for workers in low skill areas such as construction with protections such as a 40 hour working week, health cover and annual leave? This would be seen as extremely attractive in many parts of our region, even if salaries were in the range of $1000 or a month or so. And the impact on income distribution – I say that it is the distribution of income at the level of the global citizen that matters most, and on this front the distribution narrows. Of course this will come down to the hoary old debates about immigrants taking jobs (rubbish), or union arguments that these workers should be paid local wages (which will mean that it won’t happen). But it is not clear to me that Australia should continue to be an island so apart from the 4 billion people to our north.

11 Responses to "Working 365 days a year"
  1. Australia’s economy would probably benefit if we imported many low-skilled workers, though we would of course be exporting capital through remittances.
    Given the current undersupply of undergraduates (and large class sizes in universities), we should also start importing cheap Indian professors. This would be cheaper than employing Australian professors, would make Australian professors cheaper to hire (due to downward pressure on wages), and as you say, the immigrants won’t take local jobs.
    The country’s human infrastructure would benefit from higher education intervention of this nature, in the same way our physical infrastructure would benefit from the proposed construction industry reforms.

  2. “Singapore’s policies might seem harsh, but there is no doubt that they reduce income inequality globally, at the same time as widening the distribution within Singapore.” 
    On the second part of this, foreign workers don’t increase inequality in Singapore, because they are not counted in the household income and expenditure surveys.
    Given that they account for about one-third of the population the effect of adding “non-residents” into the inequality picture would be substantial.

  3. I discussed a similar idea with my children a few years ago. Both were teenagers and both had been to India and seen domestic servants. They had also seen Indian poverty and so the potential gains from paying poor Indians to come to Australia as domestic servants (on reasonable conditions and wages, significantly higher than in India, but lower than standard Australian conditions) were, I thought, clear. 
    Interestingly, both argued strongly against the proposal on the grounds that increased inequality in Australia would have negative effects here. The social implications and potential for attitudes to change worried them both. (e.g. how would people’s attitude to the poor change if we imported low paid overseas workers).
    It would be interesting to know if their views have changed but I suspect that their views would be widely held.

    On the point of ‘importing Professors’ – in universities it is what we do all the time. Higher Education is probably the most mobile and internationally-competitive labour market in the world. Don’t believe me? Wander through a Go8 Economics Dept sometime and look at the diverse backgrounds of the academic staff.
    Unfortunately (for our universities) world-class researchers are a scarce commodity and Australia will find it hard to compete under current structures and funding arrangements (but that is a different blog!)

  4. If you really care about global inequality why stop at temporary visas? I agree with you that we should increase immigration, but make it permanent rather than temporary.

  5. I certainly agree that we should allow lots of those workers in Steven.

    “both argued strongly against the proposal on the grounds that increased inequality in Australia would have negative effects here.”

    Sounds like your kids discovered that they didn’t care so much about the suffering or injustice caused by inequality as they thought. They’d rather feather their own nests than help reduce it!

  6. Importing 100,000 Chinese to work on infrastructure very much sounds like the guest worker system that was taken in Europe in the 60s and 70s and has worked out badly for Europe. Unless one is talking about very fenced-off projects and one has the political will to enforce evictions of people who find partners and jobs in this country, temporary often becomes permanent, in which case the question becomes whether these are really the new citizens you want.
    The current Australian immigration system, whereby one sells visas to highly educated migrants, where the payment runs via university fees or depressed wages, is pretty much world-best-practice.

  7. There is an interesting discussion of the effects of different types of immigration programmes by Ross Garnaut athttp://www.immi.gov.au/media/publications/pdf/mig_aust_us_compare.pdf
     
     

  8. Please explain why it is “rubbish” to say that the immigrants are “taking jobs”. The answer that non-immigrant workers will move to other sectors of the economy stimulated by the growth won’t work, because both foreign workers and foreign capital (the big miners, who would jump at this scheme, agribusiness conglomerates, etc) would repatriate most of their wages & profits offshore, so there’s not going to be an aggregate demand boost to lift employment elsewhere.

  9. James you are using an anecdote. Look at the empirical literature. The latest paper I can find in a 30 second search on the web is by Dietrich Fausten and Asadul Islam – they find “There is no robust evidence that a relative increase in skilled immigrants exerts discernible adverse consequences on the wage structure in Australia.” See the references therein for the same results for jobs, or Chris Worswick’s paper in the Economic Record from a few years earlier for the same.

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