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The Social and Economic

Impacts of Foreign Workers


on Macaus Labor Force

SOCY215-012

13rd April, 2015

Abstract
Because of the transfer of sovereignty over Macau in 1999 and
liberation of gambling right in 2002, Macau economy has develop
sharply. GDP per capita jumped from 125,013 MOP (2002) to
713,514 MOP (2014), 1 which increased more than 5 times. The
majority reason is that the number of tourism came to Macau was
11,530,841 in 2002, it boosted into 31,525,632 in 2014.2
Nevertheless, the number of local people in Macau increased slightly
(from 418 thousand to 465 thousand) during this period.3
Here comes a question, how these small city deal with so many
tourism and make so much money without increasing the number of
local people? The only answer is the huge number of foreign labors.

Background and Causes

Macau, located at the mouth of the Pearl River Delta, has unique
geographical advantages for its development. From a small village
to the Vegas of the East, Macau has been developing at the
highest rate in history since the Return to China in 1999. Casino
concessions has increased from one to three, and then six, which
caused Macaus economy to boom extraordinary and caught the
worlds eye (H.C. Chang, 2014, p.21).
There are so many visitors come from all over the world, hence the
demand of labor force in Macau is very high. Even though there so
many foreign workers come to Macau for a better job, data from the
DSEC published in March,2015 shows that the unemployment rate in
2014 is 1.7%, this actually implies that there is no such problem of
unemployment in Macau, rather, Macau is in a status of lack of
labor.

Gaming, construction, and hotels, restaurants & similar activities are


three major industry that occupied majority of labor force in Macau
(DSEC).

These kinds jobs need a huge amount of labor, but Macau citizens
tend to opt for croupier jobs over frontline service positions, which
is one of the areas facing acute shortages, according to Jiji Tu,
director of human resource agency, MSS Recruitment and helloJobs.com (2013, Macaucloser). The Labor force participation rate in
Macau is relative high which is over 75% (DSEC 2015). It means that
three-quarters of people in working age have to work in Macau.
Parents need to work in day time. It raise the demand of baby sitter
and housekeeping. Moreover, foreign labor have several competitive
advantages compare for local labor. It is fact that there are so many
upper level manager in Macau are foreigners. General speaking, this
kind of foreign labors are well educated, can provide their unique
experience to local workers.
Whats more, average salary is Macau is relative higher than other
places nearby Macau, such as mainland, Thailand and Philippines.
This is a main reason way so many people want to work in Macau

rather than in their home countries. On the other hand, because of


limited of local work force, the salary for local is much higher than
foreigner generally. Company would like to hire foreign worker to get
greater profit. According to these reasons, there is no doubt that
Macau need foreign labor whatever is upper level or lower level to
solve labor force problem.
Base on statistics from the Human Resources Office and the DSEC,
the number of non-resident workers in Macau has increased from
68,832 in 2007 February to 173,358 in 2015 February, at an
increase of 152%; while the number of foreign workers occupies
43% of the total employed population in 2015 January. Undoubtedly
the rapid development in Macau has indirectly affected the
population and labor force pattern since the last decade.

Consequence
There are so many foreign labor inject to Macau in recent years,
they come from different places in the world; the following table
shows the distribution:

As the table above we can see that, the number of foreign labor
increase from 110,552 in 2012 to 172,062 in 2015, which increased
more than 50% within 3 years. It means that the demand of labor in
Macau is very intense. The huge amount of foreign labor play an
important role in development of Macau. In the following, we will
investigate into the possible social and economic impacts with the
help of statistics.

Culture and Language


We can see that most foreign labors come from Southeast Asia.
Amongst, more than half comes from mainland China; follow by the
Philippines and the Vietnamese. The variety leads to a large impact
to the local culture in Macau, which includes the effect on the
language use and the difference in working behaviors. Local people

will have to communicate to the foreign labors mainly either by


English or by Mandarin. For instance, most of the largest resorts and
casinos in the Cotai area belong to the parent companies in the
Vegas. To communicate better, local managers will have to consider
learning better English. They have to participate in advanced
studies to improve themselves to compete with the foreign labors.

Change in Ideology of local labor force


The rapid development in Macau for the past 20 years caused the
main sector shifted from secondary to tertiary. Together with the
large number of inflow of foreign labor workers especially in the past
decade, the value perspective of the majority group in the labor
market changed. Younger teens are attracted by the high wages
offered by casinos and resort, they may no longer go for further
education in different fields, and dealers and casino-managerial
works might have replaced instead. Such change will bring negative
impacts to the Macaus local labor market in long-term, when the
majority of the local labor force in the future is professional dealers
and casino managers. It leads to a lack of variety of local
professionals in different fields, and will increase the inflow of
foreign labor workers in different industries. This is actually a
viscous cycle.

Illegal labor

There are around 100,000 people was repatriated to their home


countries by Macau. Most of them worked in Macau without Macau
Identification Card or labor visa. Illegal foreign labor do harm to
Macaus economy and may occur some social problems.

Gambling boom a mixed blessing for Macau's youth


By Katie Hunt Business reporter, BBC News, Macau , 26 June 2012

Its exam time at Macau's Polytechnic Institute and the students are busy cramming. But they are not sat
in the library poring over textbooks, they are deftly dealing cards, counting chips and calculating payoffs.
"The most interesting course is blackjack," says one student, 19-year-old Tommy Cheang.

Tommy is training for a job in the world's biggest gambling centre and is one of thousands of students
who each year pass through the polytechnic's mock casino floor - a vast, fluorescent-lit room of baccarat
tables, roulette wheels and slot machines.
It is here they learn all they need to know about the arcane world of gaming - from shuffling smoothly
and managing the pit, to how handle a sore loser or spot a player stealing chips.

And it's a world where young people like Tommy hold all the cards. With the law favouring local
workers, jobs are handed to the polytechnic's graduates on a plate. Many receive offers of employment
from casinos long before they finish their courses.

Tommy, however, doesn't want to work as an entry-level


dealer. He is taking a degree-level qualification, which he
hopes will give him a shot at casino management.

Young people like Tommy Cheang and Yoki Leung


get casino jobs handed to them on a plate

Economic Impacts specific in Wages


According to L. P. Chio (1997), the more foreign labors, the lower the
level of average wages in the country. However, one fact worth
noticing is that Macau is nearly at all times lack of labor workers. By
using the Vector Autogressive Model, Y. N. Song (2013) suggests
that due to the lack of workers in the construction industry, wages
keeps at a quite high level; for the manufacturing, financial and
tourism industries, wages would be forced to elevate in long-term so
to attract qualified workers, and to satisfy the job vacancies. These
indicate that the inflow of foreign labor workers have positive effects
to the wage level in different industries in long-term.

Economic impacts in general


According to the ex-secretary for Economy and Finance P. Y. Tam
(2013), 32% of the six major enterprises (resorts and casinos)
management staffs are foreign labor workers. We may interpret that
Macau local people are not occupying most of the senior managerial
works, and that local people cannot fully enjoy the economic
benefits brought by the rapid development. Reasons such as the
lack of tourism-related industry experiences, relatively lower
education level, are suggested for the mentioned phenomenon.
Even though the government set policies so only Macau residents
are allowed to work as baccarat dealers, most of the dealers are

lower-educated local labor forces, and it is very difficult for them to


have an opportunity to promote. In long-term, this is not a good sign
for the sustainable development, and may bring a negative
economic impact when the labor market becomes saturated, or the
development slows down.

Living standard
As we all known, Macau is a very small city, land for living is limited.
The housing price in Macau is extreme high. The number of
residence increase by 170 thousand, which is foreign labor. With
more and more labor come to Macau for a better working
opportunity, the housing price in Macau may climb to another record
high. Too many foreign labor do occupy public resource in Macau.
For instance, every morning, there are huge amount of mainland
worker go to work by bus, it cause some of Macau local residence
can get into a bus until waiting for a long time.

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