The most puzzling story of the week is the one about the government outlawing expat pay packages. The SCMP ran this story (subscription required) on Wednesday:
Hong Kong companies will have to justify their offers of generous "expat packages" to foreign employees under an anti-racism bill now in an "advanced stage of drafting". They will have to prove the recruit has expertise not readily available in Hong Kong, and permanent residents will not be able to receive such special terms.
Are we really supposed to believe that although Hong Kong has no minimum wage, there is going to be legislation to stop companies paying staff more than they are worth? Seems unlikely.
There are (as far as I know) two types of "expat" job. The first is where a foreign company wants to have someone from Head Office on-site, and the second is where an expat has skills or experience that are not available locally. It is many years since Brits could work without an employment visa, and if you want to hire someone from abroad you already have to convince the Immigration Department that local candidates are not available before an employment visa will be issued (and rumour has it that a high salary makes it easier to convince them to grant the application). So why would anyone go to the trouble and expense of recruiting from abroad if there are local candidates who could do the job?
Not that you'd believe it from reading the letters in the SCMP. Here's Harry Chen, who seems to have a chip on his shoulder:
I believe that it is time for the glorified expat salary packages to disappear. It is true that they are important to attracting to Hong Kong staff with talent and expertise, but at the same time the companies providing these expat packages are guilty of racial discrimination. A local Hongkonger educated in an Ivy League university and fluent in four languages would not be eligible for the same generous expat salary package that an American, with a lower educational level and no Asian language skills, demands.
Ask yourself if having these overpaid staff actually helps the economic situation of your typical Hongkonger. An expat company vice-president in Hong Kong would still be a department supervisor if he or she had stayed in their home country.
Isn't this a myth? How many expat companies like that are there left in Hong Kong? Well, OK, there are a few companies left where all the top jobs go to expats, and very competent locals are stranded beneath the glass ceiling, but the good staff will leave and join employers who will give them more opportunities, and fewer and fewer companies can afford that luxury. Things are changing, and one high-profile example of this was Marks & Spencer, who decided to cut costs by getting rid of expat managers and 'localizing' instead. Hence you hear complaints from expats who find it difficult to get jobs because companies prefer locals (perhaps in the belief that expats expect higher salaries).
The fact is that the last ten years have seen a steep decline in traditional expat packages, and the main reason is the economy. As the economy picks up, a few companies will look abroad for staff with particular skills, but it seems very unlikely that we will ever see a return to the way things were ten years ago. There is absolutely no need for the government to legislate against expat packages, and I find it hard to believe that they would do so.