The most general definition of capitalism is "A free market and companies living by profit motive. They exist to make money. Prices, production, and the distribution of goods are determined by competition in a free market."
It is a perfect formula for most commodities except when applied to the labour market. Allowing free market access to cheap labour so that equilibrium price i.e. wage, will be determined by demand and supply is economically logical but is also destructive to the social fabric. Low-wage foreign workers are competing with local workers on unequal ground. Wage that is considered to be luxurious to a foreign worker may not meet the subsistence level required by a local. Foreign workers can survive in crammed dormitories, cheap food because they know that their sufferings are temporary. In the meantime, the balanced pay that they managed to remit to their families, which is considered to be next to nothing by the locals, is a big sum to them. For the locals, the same wage may be just enough to cover personal transportation and meals and there is nothing left for the family. In short, the basic needs of the foreign workers and the locals are unequal.
International trade and relocation of manufacturing bases to places with cheap labour is causing nightmare to developed countries. We are not spared. We managed to continue to keep some MNC with lucrative tax incentives, security and stability of infrastructure and most importantly, supply of cheap labour from foreign soil. It is fine if such jobs are confined to manufacturing industries because we have been employing foreigners all along. However, it soon eat into the service industries such as restaurants, even coffeeshops, retail trades ... Unfortunately, these are the main sources of employment for the low-income locals. Though measures have been taken to upgrade the skill of the locals but knowing their age and capabilities, success is limited.
Why then is there a need to allow cheap foreign labour to infiltrate the service industries? My guess is "high property price". A huge portion of our operation cost is rental. To remain viable, cutting labour cost is an easy option. However, it is a risky one.
When MBT said that if we lowered the property price, we are robbing the reserve. He is honest. A big portion of the values of companies, personal ... comes from properties. So depressing the property price is a big no. Till a great compromise can be found to dismount, we will have big trouble to continue riding on the back of the property tiger. Thank you for your patience if you managed to read till here. Just a GP essay that I thought of writing if I have the chance to take A level again.