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Expense for expats

You could almost be forgiven for feeling sorry for expatriate workers when reading lists published by the likes of ECA and Mercer of the most expensive cities for expatriates to live.

It's no longer a surprise to see Luanda in Angola at the top of the list year after year. It’s still an opportunity for a bit of sly humour though as we all marvel at why such locations beat even Switzerland as the most expensive places to live. In truth, it’s not hard to understand why, when you consider the security situations surrounding oil and gas hubs.

More interesting from the perspective of the ‘typical’ shipping employers of expatriates and their staff, is the cost of living in the major shipping hubs. As ever, Swiss cities are high on the list, so much so that pay for junior jobs in Switzerland far outstrips the pay for similar roles in other expensive locations. Quite simply, Switzerland is such an expensive place to live that a minimum sum of money is a necessity even to survive. Contrast this with Singapore, 19th on ECA’s list of expensive cities (whereas London doesn’t even feature in the top 30), where junior local staff are underpaid compared to other high-cost cities.

Why is this?

Well, the clue lies in the title of these surveys; they are all about expense for expatriates. Singapore for example is an inordinately expensive place to live if one seeks to live an expatriate lifestyle; living in the centre, eating and drinking in the places to be seen and shopping in western supermarkets. Shop in the market however and eat out in hawker centres (arguably more fun, and better food) and it’s not quite so costly. “You pays your money, you takes your choice”.

Moving on a few years, those underpaid local staff in Singapore find themselves in great demand. More stringent visa regulations and a desire on the part of employers in Singapore to employ locally and to employ Mandarin speakers, mean that locals with a few years’ experience are in as much demand, if not higher, than expatriates. So, after a period of being regarded as cheaper labour, the locals may well have the last laugh. We wonder though whether Singapore has shot itself in the foot in the sense that there are now so many shipping employers fishing in the same pool for a limited amount of talent that they will start to look for alternative locations.

Another very serious issue for Singapore, in contrast to, say, the UAE, is that the trend away from expatriate employment packages is now firmly established (with the exception of staff on secondments). For some years now, fewer and fewer employers in Singapore have been paying housing and schooling allowances to their expatriate staff whereas the traditional expat deal is still available in most cases in the UAE. The most recent annual market analysis report of the Maritime HR Association revealed that just over 12% of staff in Singapore receive a housing allowance compared with 60% in the UAE.

The other major shipping hubs in ECA’s top thirty include Hong Kong, Oslo, New York and Copenhagen. And as for London? Well, it must be cheap as chips mate… *insert sarcastic laugh here*

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