I have been reading ¨The Undercover Economist¨ by Tim Harford. It offers a look at the everyday issues we face from an economist´s perspective. There is a section on the topic of immigration.

It basically says that our receptiveness to incoming immigrants is determined by our self interests. Skilled workers are more interested to have plenty of unskilled immigrants coming in because that would mean that skilled workers have become relatively scarce compared to unskilled ones. And vice-versa. However, an influx of either type of workers will lower the wages within the category.

This is a simplified but, in my opinion, a very realistic view of what is happening in Singapore.

Despite reading in the newspapers everyday about the good economy in Singapore nowadays, many middle and lower class workers are feeling the pinch. This doesn´t mean that the economy is not doing well. It is doing well; for the richer people… specifically for those who benefit from the influx of foreigners who are willing to work for lower pay.

So who are these people enjoying the good economy? They are probably the capitalists, business owners and high-level executives whose qualifications get relatively scarcer, or who benefit from paying out lower wages as more middle and lower class immigrant workers come in.

A good example will be the starting wages for graduates in Singapore. Ten years ago, despite the better purchasing power of money at the time, it wasn´t unusual to hear fresh graduates getting $2,500 a month in the private sector. Nowadays, it will be good if a fresh graduate can get $2,400… and this is in civil service… which by right should be more or less reflecting the job market conditions in private sector. And, this is taking into consideration the lower purchasing power of money in today´s terms. So, we are getting lower wages, coupled with lower bang for bucks – while employers are earning more than ever in revenue, at the same time saving on manpower costs.

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