Watch out for Boris’s snake oil claims of a high wage economy – Telegraph.co.uk

This is the result of deliberate policy; Lee Kuan Yew, the founding father of modern Singapore, argued that “[immigrants] will do many jobs better than the next generation Singaporean would because the next generation Singaporean will have been brought up in an easier environment that has not deprived him of enough basic necessities to make him really want to work so hard”. The classic economic argument in favour of freedom of movement, in other words. 

For much of its early time as an independent state, Singapore applied this way of thinking, helping the former British colony power its way from third world to advanced economy status in double quick time.

Understandably, however, there was eventually a political backlash against the influx, with its attendant strains on infrastructure and social cohesion. 

Professional workers deemed necessary to support Singapore’s growth are still largely unaffected, but unskilled and lower skilled workers today find their access tightly regulated through a complex system of quotas and levies which restricts the numbers, but is theoretically flexible enough to answer the needs of business. 

Subject to the quotas, firms remain substantially free to recruit from abroad as they wish, but below a certain level of income, a levy – or tax on foreign workers – is applied which acts as a disincentive. Recruiting native workers, or investing in productivity-enhancing capital instead, thus becomes relatively more attractive. 

Singapore is one of the few countries to use fees to regulate the entry of workers rather than numerical caps, labour market tests, or points-based systems.

To me this would seem to be a better approach than the one we have in Britain, in that it doesn’t interfere too much with the freedom of firms to recruit who they want, but it makes accessing otherwise cheap, unskilled labour from abroad more costly. 

The money raised can also be applied to other things. Great minds think alike; I see that Simon Wolfson, chief executive of Next, has suggested something similar as a way through the current chaos in the UK.

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