Inside Asian Gaming

August 2010 | INSIDE ASIAN GAMING 27 Macau Policy received only pre-school instruction. Before a new Labour Relations Law was enacted in 2008, Macau residents could leave school at 14 and legally start work. The age for full time employment has now been raised to 16. That policy certainly didn’t create a stampede for university places. In Q1 2010, 30.7% of the Macau school population got no further than junior middle education (i.e. age 16). Inotherwords, there is currently inMacau a culture of exiting education as quickly as possible in pursuit of work. During the days of Stanley Ho’s gaming monopoly under STDM, that lack of a strong tradition in post- 16educationwasn’tasignificantimpediment to Macau’s economic progress. Up until the mid-1990s, Macau was still a relatively low skill, low wage, industrial and commercial economy with some gaming. That was at a time when Hong Kong, by contrast, had already significantly de-industrialised and was starting to reinvent itself as a gateway for investment into China. Since the liberalisation of the Macau casino industry in 2002 and the opening of the first foreign owned casino, Sands Macao, in 2004, the locals’ culture of early exit from education has been reinforced by a policy decision that casino dealer jobs should be reserved for permanent residents. Competition between casino operators vying to employ 18 year old school leavers looking for their first job has helped push the median dealer wage up to MOP13,000 in Q1 2010. That makes card dealing one of the best-paid occupations in Macau behind public administration and financial services. It’s also, however, a job with a distinct glass ceiling unless dealing staff are willing to return to education to develop new skills to perform other roles within the organisation. Modern gaming resorts are systemically very complex and need highly skilled and highly trained professionals to manage them effectively. Currently, therefore, Macau cannot avoid importing some people to occupy that role. That said, the number of imported workers in Macau is well below the peak reached in 2008, when there were 92,961— equivalent to 28.8% of the employed population at the time. After the global financial crisis that began in September 2008, theMacau government ordered casino operators to reduce the number of ‘blue card’ holders on their books. People were let go almost overnight, with just ten days to leave Macau after the termination of their employment. Between the end of 2008 and the end of 2009, the number of non-resident workers in Macau fell by 18.7%. At the end of Q1 2010, there were 72,843 non-resident workers in Macau, with the inflow down 11.6% in Q1 2010 compared to the same period a year earlier. It’s only by the good grace of the Macau government that foreign investors were allowed into the local casino market in the first place. It’s perfectly reasonable, therefore, that Macau would want to engineer its job market to benefit its own people, and not those of Hong Kong or foreign countries thousands of miles away. The issue is not Macau’s sovereign right (or at least subsidiary sovereign right as a Special Administrative Region of China) to do that. It’s that it would probably benefit everyone if it could be done in as rational and coherent a way as possible. Despite the skills gap in the local economy, most Macau residents already have jobs, even if not always particularly interesting or glamorous ones. So when the government sets quotas for a certain proportion of locals in a key industry such as construction, the employers have to poach workers from other sectors. The unemployment rate among residents was only 3.7% in the first quarter of this year, according to DSEC. That would be counted as statistical full employment in many European Union countries. Local residents need to be moved up the value chain in terms of skills and income so that more of them are doing the higher level, well-paid jobs and the migrant workers are mostly doing the low paid ones. That’s how the labour market increasingly works in the United Arab Emirates, where there’s been Non resident workers in Macau, 2007-2010 2007 2008 2009 2009 2009 2009 2009 2010 Q1 Q2 Q3 Q4 Q1 Inflow of non-resident workers number 62206 65905 33250 8863 9004 7702 7681 7837 y on y % change 18.7 5.9 19.5 12.0 53.9 58.6 38.5 11.6 Non-resident workers in Macao number 85207 92161 74905 87789 83616 77239 74905 72843 y on y % change 31.8 8.2 18.7 2.5 15.1 25.9 18.7 17.0 Source: Macao Economic Bulletin/DSEC Straight ahead—the UAE is gradually replacing expats with locals