Global Talent Update - July 2017

Europe, Middle East and Africa

The ramifications of the Brexit decision have come into even sharper focus in the U.K. as negotiations with the EU continue into the second round. The main issues of dispute are now whether the U.K. will have to pay to exit the EU, along with determining the rights of citizens, the BBC reported.

While British officials have agreed to pay to exit the bloc, the specific amount is still up in the air. According to BBC sources, the U.K. may have to pay between 30 and 50 billion Euros to leave.

"We both recognise the importance of sorting out the obligations we have to one another, both legally and in a spirit of mutual cooperation," said Secretary of State for Exiting the European Union, David Davis.

However, there appears to remain a "fundamental divergence" in the agreement of terms that would set the rights of EU citizens in the U.K. post-leave, as chief Brexit negotiator for the EU, Michel Barnier, recently stated, according to Politico.

"There does remain one fundamental divergence on the way on which such rights would be guaranteed and on other points such as the rights of future family members and the export of certain benefits," said Barnier.

The official negotiations for Brexit terms are expected to continue into August, the Express noted. As a result of Brexit and the financial uncertainty it has caused, many companies are choosing to relocate their offices from the U.K. to Germany, the Guardian reported. Morgan Stanley recently announced that it would establish its "post-Brexit EU hub" in Frankfurt, which may put the bank's 200 jobs in London in jeopardy.

Deutsche Bank also announced that it will likely be moving roles from the U.K. to Frankfurt, according to City A.M. The chief regulatory officer of the bank, Sylvie Matherat, has noted that up to 4,000 jobs in the U.K. could potentially be impacted by Brexit.

Asia-Pacific

Labor laws may undergo development in Japan, where a recent Reuters poll found that more than half of all Japanese companies intend to increase the retirement age of their workforce, The New York Times reported.

Currently, the majority of companies in the country mandate retirement at 60. However, historic labour shortage and an aging population are causing many employers to consider the benefits of raising the retirement age. The Reuters survey found that 46 percent of companies plan to set the age at 65.

Earlier this month, Japan and the European Union reached a trade deal that will reduce barriers to the exchange of goods, the BBC reported. The two groups also agreed on a "Strategic Partnership" that will have Japan and the EU teaming up to both establish a favorable trade environment and involve collaboration in fighting climate change, among other issues.

According to President of the European Council, Donald Tusk, the deal expressed "the shared values that underpin our societies, by which I mean liberal democracy, human rights and the rule of law," the source reported.

In other economic news, a positive jobs report for Japan may cause the Federal Reserve to continue with its plans to raise interest rates "as early as September," according to MarketWatch.

Exports increased in Thailand in June, surpassing analyst expectations and marking the fourth consecutive month of growth, the Bangkok Post reported. Custom-cleared shipments jumped 11.7 per cent in June compared to a year earlier, while imports increased 13.7 per cent during the same timeframe. The country had a trade surplus of $1.92 billion in June as well.

The Thai Commerce Ministry estimates that exports will increase 5 per cent this year, which would be the first annual growth in four years, the source noted.

Increased STEM employment may also help economic growth. A recent data analysis by JobThai.com found that sciences/research jobs are the highest-paying positions for new bachelor degree graduates in the country, paying between 16,000 and 25,000 baht per month ($476 - $745 USD), according to the Bangkok Post. Engineering jobs were the second-highest paying, followed by production/quality assurance and control positions.

Americas

The U.S. added 222,000 jobs in June, exceeding economists' prediction of 178,000 jobs gained, Bloomberg reported. The unemployment rate increased slightly to 4.4 per cent, while average hourly earnings rose to $26.25.

Federal Reserve Chairwoman Janet Yellen spoke positively about the monthly job gains, though she noted that continued inflation weakness may cause the Fed to be cautious about raising interest rates in the near future, The New York Times reported.

"It's premature to reach the judgment that we're not on the path to 2 per cent inflation over the next couple of years," she said. "We're watching this very closely and stand ready to adjust our policy if it appears the inflation undershoot will be persistent."

Employment figures may be affected by the outcome of the first round of upcoming NAFTA talks between the U.S., Canada and Mexico, CNBC reported. The discussions will begin on Aug. 16 in Washington.

Mexico continues to see improvements to its labor market. In the first half of 2017, more than 517,000 Mexican employees received access to social security, which is a 17 per cent increase from the first half of 2016, the Press Herald reported.

"This is a very strong year for job creation," said Chief Latin America Economist for UBS, Rafael de la Fuente, according to the source. "The shining light in the whole consumption story is employment. There's no question that you've made a dent in informality under this administration."

The Brazilian Senate approved a major labor reform bill on July 11, The Rio Times reported. The bill was called "one of the most ambitious reforms of the last 30 years" by President Michel Temer and has caused significant controversy between political and labor groups in the country.

The bill includes the lifting of regulations governing freelancers and remote and temporary workers, and is hoped to help decrease unemployment figures in the country.