Wage shock therapy ‘very risky’: Lim Swee Say
"The Straits Times also reported that Lim was not convinced that wages could be raised in the way Prof Lim suggested without resulting in other workers and consumers having to compensate the amount involved.
He in fact reportedly warned that if productivity did not rise to match the 50 per cent increase in wages, workers would suffer from job losses and structural unemployment.
Assuming a base pay of $1,000 per month and a group of 400,000 low-wage workers, Lim estimated that the total amount involved in the proposed wage hike would come up to a hefty $4.56 billion."
Extracted from [Yahoo! news]
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According to Prof Lim's plan to increase wages of the lower income group, this group is to have an 50% increment in a span of 3 years. Minister Ah Lim told Singapore tat the total amount involved in the proposed wage hike would come up to S$4.56 billion. This estimation is based on the calculation on 400,000 low wage workers with an assumed base pay of S$1,000 per month.
Apparently Ah Lim can't count
The increment for 1 worker earning S$1,000 is of course, S$500. That's 50% increment. So:
500 x 400,000 workers = 200,000,000
That is S$200 million. That, we know is some way to S4.56 billion bucks.
Okay, remember employers gotta pay more CPF to the workers for the increment as well. Taking 16.5% contribution rate if I remember correctly;
500 x 0.165 x 400,000 = 33,000,000
That is another S$33 million incurred by employers. Right, as we know 200 million + 33 million does not equate to S$4.56 billion.
Assuming the governments need to set up big advertising budget to announce the new scheme, say S$40 million. You know, go on TV and make a hoo ha, print banners, posters, online advertising, taxis, buses, radio, dustbin whatever. S$40 million should be ... just nice I think.
Say, the government needs to hold a meeting with business leaders to persuade them to accept the new wage restructuring. That requires a huge venue isn't it? Food and services cannot be anything less than world class. After all these are elites of the societies and you can't simply serve them Mee Siam Mai Hum. Let's set aside another S$68 million for this convention.
Lets say the corporate leaders are unwilling to accept the proposal and threatened to take their investment elsewhere, out of Singapore. The Singapore government decided to soften their blows and decided to give them 50% of the increment that companies have to fork out as special tax rebates. That works out to be S$233 million x 50% = S$116.5 million.
Let's see how the bill comes out:
233,000,000 (salary increment)
40,000,000 (advertising)
68,000,000 (makan session)
116,500,000 (special tax rebate)
Total: S$457.5 million.
Shucks, that is still a bit of shortfall to S$4.56 billion. S$457,500,000 is a hefty amount of money really. But it is still a bit less than S$4,560,000,000 that Ah Lim estimated the total to be.
Where did the rest of the money go to ah?
Let me guess. Ah Lim must have estimated the 233 million increment as an re-occurring costs. You see, wage increment is not a one-time fee. Workers will be paid month after month after the increment. Thus the real cost estimated is not S$4.56 billion.
Assuming the lower income group has about 30 more years to be in the workforce, it would be 233 million x 12 months x 30 years = 83880 million or S$83.88 billion, not including makan session, advertising and stuff. Inflation is not accounted for too! Why don't Ah Lim quote that instead? That'll scare Singaporeans into rejecting Prof Lim's proposal. Heh.
Anyway:
The issue is that: Why are the PAP ministers popping out one by one to reject a wage increment for the lower income ? If everyone in Singapore gives me S$1, I will be a multi-millionaire. What is the point of quoting big figures to impress anyone? We know that there will be cost incurred with a wage increment. The point is that the rich-poor divide in Singapore has gone way too wide. Even a 50% wage increment for the lower income will not help much, as the top earners have gone way, way too far ahead.
Why hasn't anyone question how much money the top earners cost the economy with their annual increment?
This isn't right. A labour chief stopping to proposal to increase the wages of the workers he is supposed to represent. The same labour chief who is holding a Minister without portfolio, a member of the PAP, raking in millions as his annual income. An obvious conflict of interests. Don't you think there is something really wrong with Singapore?
Why did we allow this to happen?
Very interestic - We have around USD 3,500.-- for low wage earners, because Switzerland hoarts black money from bandits and other criminals.(blush).
ReplyDeleteIndians are the largest depositors in banks abroad with an estimated 500 billion US dollars (nearly Rs 24.5 lakh crore) of illegal money stashed by them in tax havens, the CBI Director said on Monday.
India, in particular, has suffered from the flow of illegal funds to tax havens such as Mauritius, , Switzerland, Lichtenstein, British Virgin Islands etc.
It is estimated that around 500 billion dollars of illegal money belonging to Indians is deposited in tax havens abroad. Largest depositors in Swiss Banks are also reported to be Indians," CBI director A.P Singh said speaking at the inauguration of first Interpol global programme on anti-corruption and asset recovery.
He said getting information about such illegal transactions is a time taking process as investigators have to peel each layer by sending judicial requests to the country where such deposits have been made.
"53 per cent of the countries said to be least corrupt by the Transparency International Index are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven," Singh said.
He said there is a lack of political will in the leading tax haven states to part with the information because they are aware of the extent to which their economies have become "geared to this flow of illegal capitals from the poorer countries."
~Orianne~
he was former full minister of a ministry
ReplyDeleteever wonder y he is now just a minister in pm office?
must be not smart enuff lor
can tok in cabinet but cant manage a ministry
his tok r just like bad breath to me, i just spray deodorant to remove it
ignorant. apathetic. little love amongst sinkies.
ReplyDeleteat a young age we're taught to mind our own business, only conveniently using those "better" than ourselves to chastise our children into harder work at their studies.
thus fostering a selfish environment. i believe this gives the authority basically a free hand to do whatever it wishes.
and now here we stand, wondering how we got here.
Why did we allow this to happen?
ReplyDeleteBecause voters in East Coast were too stupid. They voted for a union boss who wanted a cheaper better and faster workforce along with a heartless turd.
I voted for the opposition, and I am in East Coast GRC.
ReplyDelete