January 28, 2020

Singapore to Give Citizens Priority for Job Openings

HONG KONG — The government of Singapore announced measures on Monday that will compel companies to give priority to local residents in the job recruitment process, a move that could create more challenges for multinational firms doing business in the Southeast Asian city-state.

The measures will require companies operating in Singapore to advertise vacancies to local residents for two weeks before they can apply to fill positions with overseas workers. The recruitment notices must be posted to a central job bank to be administered by a government employment agency, according to a statement released by the Ministry of Manpower.

“Providing better jobs and diverse opportunities to meet Singaporeans’ aspirations are the ultimate objectives of economic growth,” Tan Chuan-Jin, the acting minister for manpower, said in the statement. “What we are doing is to put in place measures to nudge employers to give Singaporeans — especially our young graduates and professionals, managers and executives — a fair chance at both job and development opportunities.”

Singapore has already taken steps this year to make it more difficult to import workers, including increasing levies on overseas hires and reducing the allowable ratio of foreign to local employees at companies in the service, manufacturing, construction and maritime sectors.

Singapore is a major hub for regional and multinational companies operating in Southeast Asia, and such measures have raised concerns in the foreign business community about the ability to meet staffing needs, given Singapore’s aging population. In January, nine foreign business groups, including the American, Australian, British, Canadian and European chambers of commerce, sent a letter expressing these concerns to local labor officials.

“Singapore’s openness to foreign labor has enabled it to attract, retain and absorb the best of foreign talent, providing it with a clear competitive advantage over its neighbors,” the business groups wrote. “While Singapore continues to attract significant foreign investment, we nevertheless fear current implementation of revised labor policy risks negatively impacting Singapore’s economy and reputation as an open economy.”

While many countries impose restrictions on foreign workers, few of them depend on imported labor as much as Singapore. With a citizenry of 3.3 million and a fertility rate that falls far short of replenishing the population, tiny Singapore relies heavily on foreign labor for construction workers, service staffs and financial and legal professionals.

That dependence is increasing as the economy expands. The number of foreign workers in Singapore has soared in recent years, to 1.2 million at the end of 2012, accounting for 37 percent of the labor force. At the same time, Singapore’s unemployment rate has remained among the lowest in Asia, at 2.1 percent as of June.

Still, opposition to imported labor has risen among locals who see themselves as missing out on opportunities, and that has become a political liability for the government. The People’s Action Party, which has governed Singapore since it became an independent nation in 1965, generated its weakest level of support ever in elections two years ago.

Also on Monday, the government raised by 10 percent the minimum salary required before it will issue an employment pass for a foreign worker. The new amount is 3,300 Singapore dollars, or $2,600, a month, effective in January.

Companies with 25 or fewer employees and jobs that pay a fixed monthly salary of 12,000 Singapore dollars, or $9,600, or more will be exempt from the new recruitment advertising requirements, the government said. The policy takes effect next August.

Mr. Tan, of the labor ministry, dismissed criticism of the measures. “The framework is not about ‘Hire Singaporeans first,’ or ‘Hire Singaporeans only,’ ” he said. “What the government is doing is to help them get a fair opportunity. Singaporeans must still prove themselves able and competitive to take on the higher jobs that they aspire to.”

Article source: http://www.nytimes.com/2013/09/24/business/global/singapore-seeks-to-put-locals-first-in-line-for-jobs.html?partner=rss&emc=rss

Europe Has Plan for Failed Banks, but Germany Isn’t Convinced

But Germany’s skepticism about giving authority to a group overseen by the European Commission, as well as other concerns, could bog the proposal down in months of rancorous negotiations.

On Wednesday, Michel Barnier, the commissioner overseeing financial services, is expected to call for consolidating decisions under a group supported by around 300 staff members and creating a pool of money funded by mandatory levies on banks. The system, which was described ahead of the formal announcement, would rely on the European Central Bank to signal when a financial institution in the euro area was facing severe difficulties.

A resolution board to be made up of representatives from the central bank, the European Commission and member states of the union would then make a recommendation, as necessary, on how to shut down or shrink a bank. The commission, the union’s policy-making arm in Brussels, would reserve the right to make a final decision.

The board also could draw on the shared fund to help shut down or radically restructure failing lenders after creditors and shareholders have borne some losses. European Union officials want the size of the fund to be as much as 70 billion euros when it is fully funded by 2025.

Giving the commission the power to close banks “is arguably the greatest transfer of sovereignty in the history of the E.U. and points toward a fiscal, as well as economic and monetary, union,” said Alexandria Carr, a lawyer with the firm Mayer Brown in London.

But on Tuesday, Wolfgang Schäuble, the German finance minister, told the European Commission “to be very careful” with its proposal for a single authority because “otherwise, we will risk major turbulence.”

“We have to stick to the legal basis we have. Otherwise, we will fail and we will create new uncertainty in markets,” Mr. Schäuble said to other European finance ministers as they held their monthly meeting.

Mr. Schäuble insisted, as he has before, that treaties governing the European Union need to be changed before the plan to centralize decision making for failing banks — the so-called Single Resolution Mechanism — goes fully into force. Because treaty changes would be laborious and far from certain, Mr. Schäuble is arguing for a potentially long delay to the banking effort.

But France called for swift adoption of the plan.

“We clearly want an agreement,” said the French finance minister, Pierre Moscovici. That agreement should be reached “by the end of the year,” he said.

Even as Germany sought to apply the brakes on a broad banking initiative, European Union finance ministers on Tuesday gave Latvia the formal go-ahead to use euro notes and coins in January 2014 by setting the conversion rate at 0.70 lats to 1 euro.

“We trust in Europe and we trust the euro,” Latvia’s finance minister, Andris Vilks, told a news conference.

That celebratory language contrasts with the hesitancy shown by Germany toward new banking efforts that many experts say are vital to ensuring the long-term survival of the euro.

After months of wrangling, the European Union decided late last year to create a single overseer under the European Central Bank that would directly supervise about 150 of the bloc’s biggest banks. The purpose of the Single Resolution Mechanism — and the rule book for dealing with troubled banks that was negotiated two weeks ago — is to prevent the costs of bank collapses from affecting taxpayers and states.

Such crises can quickly descend into a government debt crisis, as happened in Spain and in Ireland. Bank failures can also threaten the stability of the euro area when states can no longer afford the sky-high government borrowing costs that often come with bailing out their banks.

The plan for the Single Resolution Mechanism, as well as the proposal for the single rule book, would still need the approval the European Parliament.

Article source: http://www.nytimes.com/2013/07/10/business/global/europe-has-plan-for-failed-banks-but-germany-isnt-convinced.html?partner=rss&emc=rss

Today’s Economist: Wages and Employer Penalties


Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

The cost to workers of the Affordable Care Act’s employer responsibility penalties is greater than you think, because of their business tax treatment.

Today’s Economist

Perspectives from expert contributors.

Most low-skill workers are not offered health insurance by their employers, and those employers have been complaining about the $2,000-per-employee annual penalty they will pay beginning next year ($3,000 per employee who resorts to a subsidized exchange when insurance offered by the employer is deemed unaffordable to the worker).

Next year will not be the first time that employers had to pay taxes based on the number of employees they have. For example, they have been paying payroll taxes that amount to almost $2,000 per year for an employee with a $25,000 salary.

Employer payroll taxes have been extensively studied, and economists have concluded that employees ultimately pay for those taxes in the form of lower wages.

Thus you might think that the new $2,000 penalty would reduce wages by about $2,000 per employee per year. But unlike employer payroll taxes, the employer responsibility levies are not deductible from employer business taxes (see page 74 of this I.R.S. document). To have the same after-tax profit, an employer in the 39 percent bracket (a typical state-plus-federal bracket for corporations) would have to cut wages by $3,046.

An employer paying the $3,000 penalty would have to cut wages by $4,569. That would push someone working full-time at $10 per hour down to minimum wage.

Some good news for the employees who want health insurance: the employer penalties come with employee access to large federal subsidies for purchasing health insurance and paying out-of-pocket health expenses, unless you are in a family that is 400 percent or more above the poverty line.

Not all employers have to pay the penalties, and more good news for employees is that both types of employers will compete with each other in the market for labor, which might prevent penalty-paying employers from passing on the full cost to their employees.

Article source: http://economix.blogs.nytimes.com/2013/02/20/wages-and-employer-penalties/?partner=rss&emc=rss