SINGAPORE: Minister of State for Trade and Industry, Lee Yi Shyan said Singapore must be careful about raising wages without a corresponding increase in productivity.
Mr Lee was responding to media questions about Professor Lim Chong Yah's recent wage restructuring proposal on the sidelines of a community event.
Prof Lim had said a wage revamp is needed to address the issue of growing income inequality.
This includes progressively raising the pay of low income workers and freezing the wages of top earners.
Prof Lim suggested that those earning below S$1,500 a month should have their pay increase by 50 per cent over the next three years, and freezing wages of those earning S$15,000 or more a month, for the same period.
Prof Lim was one of those involved in Singapore's economic restructuring exercise in the late 1970s.
Prof Lim was one of those involved in Singapore's economic restructuring exercise in the late 1970s.
"In a free market system, for it to work well, we have to be very mindful of the interventions we introduce and if you artificially raise it too much... there are consequences and some of these consequences are not what you want to see," said Mr Lee.
"So I think by Prof Lim's proposal, if I understand him correctly... I think this is a very drastic way of raising the wages without corresponding increase in productivity and that will have a wide impact on the economy," he added.
******
The first man to stand up to block a possible wage restructuring in Singapore is Lee Yi Shyan. His reasons and concerns are highlighted in bold as above. I will now present my rebuttal against his lame statements.
Lee talked about a free market system and the harmful effects of artificial interferences. May I ask Lee what kind of free market system does Singapore have when foreigners are brought intentionally by swarms to artificially depress average working class wages? Do we have a free market system in the first place? The consequence of the government's manipulation of a free market system that caused a stagnation of mass wages in Singapore is the very reason why we are talking about wage restructuring today. What kind of consequences are is Lee Yi Shyan talking about here? I'll like to hear him explain.
Lee implied in his next statement that wages of the low income group should not be increased unless productivity increased in tandem. Let's look at some statistics.
Singapore's GDP per capita is among the top in the world.
Important fact: We also work the longest hours among the top countries
As a result for GDP per hour worked, Singapore is almost at the bottom of the list
GDP per hour worked is a measure of how productive we are. At near bottom, Lee Yi Shyan was right, Singapore has a productivity issue. The figures will not change unless two things happen.
1) Singapore workers decrease number of working hours
2) Singapore workers increase their output
For productivity to increase, we need at least one of the above to happen, both to be optimal.
Now, for the man who earns less than S$1,500 yearning for a long overdue wage adjustment, what must he do to please Mr Lee Yi Shyan? Working shorter hours, is that within his control? Increasing efficiency, by following instructions of his superior, performing his work with the equipment he was supplied, how much faster can a worker go?
How about 50% faster, if that possible at all? A newspaper distributor who used to cover ten HDB blocks will now have to cover fifteen perhaps. A toilet cleaner who cleans four toilets a day will have to clean six. We have to ask ourselves this question. Is doing more possible with the same procedures and equipment over a shorter time? Obviously, there is a limit a worker can do. Thus a worker has no chance to increase his productivity significantly.
Who has the resources and the power to change the way we work? Bosses? Not a chance. With extremely weak manpower laws to protect workers and a dysfunctional labour union, company heads handed a free rein have grossly overworked the Singapore workforce, as statistics shown. Only by the creation of strong manpower laws stipulating the number of hours an employee can work and the penalties that will occur to companies for overtime, corporate leaders will then be coerced to look into ways to improve efficiency in their companies' workflow.
As a Minister of State for Trade and Industry, Lee Yi Shyan must know that the key to increase the country's productivity is in the government's hand. Yet obviously a radical change isn't going to happen without the government's intervention; he is very well suggesting that Professor Lim's framework to be shelved. A heartless jerk.
Meanwhile, what's a 50% increment to the workforce earning less than S$1,500 per month? If you are earning:
S$800 a month, your wages will be S$1200 in 2015.
S$1,000 a month (and could buy a HDB flat), your wages will be $1,500 in 2015.
S$1,499 a month, your wages will be S$2,248.50 in 2015.
How very motivating. Should you be celebrating? I can't see how this will be a wide impact on Singapore's economy as what Lee Yi Shyan suggested. A stronger impact could be created by paying Ministers of Parliament an annual salary of just S$300,000 instead of their current salary levels. Imagine if we implemented this from the year 2000, how many low income workers can get their 50% increment by today. Even without this, Singapore is rich enough to pay its workforce a better, fairer wage. The government refuses to acknowledge this and wants you to believe otherwise.
For every Singaporean reading this, you voted self serving Ministers without hearts into parliament to serve you. As long as your life is not affected, your self interests protected, you carry on a life of apathy without sparing a thought for the poor. Yet you donated money in charity shows and pretend you care.
If you have a heart, it's time to feel. Please spread the word so that the blind innocent eyes can finally see.
It's ok to raise their own salaries without mention of productivity, but not so for peasants.
ReplyDeleteAfter pushing up the high cost of living,
Deletetheir multimillions salaries/bonuses/benefits will always be increased ASTRONOMICALLY to "outpace" the high cost of living, e.g. whopping 60% salary raise in 2007!
Did their productivity increase by 60% in 1 year alone??? How come this heartless LeeYS did not say SINKapore must be careful about raising wages without a corresponding increase in productivity, when it come to his ASTRONOMICAL salary increase (one-shot 60% jump)? IF this is not an extremely self-serving party, then what is???
Singapore announces 60 percent pay raise for ministers
http://www.nytimes.com/2007/04/09/world/asia/09iht-sing.3.5200498.html
Aptly put rebuttal to Prof Lim's proposal, see: http://www.wherebearsroamfree.blogspot.com.au/2012/04/prof-lim-chong-yan-from-pap-camp-thinks.html#more
ReplyDeleteYour 2nd last paragraph was well-said and it reflect the truth that that's facing our country now. We just got too many self-serving selfish voters around who feels that as long as things don't affect them, they'll keep status quo. Sadly, what they don't understand is the fact that govt policies will affect us in some way or another and by the time it affect us, it'll be too late. Sad to say, there are just too many of such people around.
ReplyDeleteJ
Why don't Li just come straight to the point by using the same argument of his infamous colleague by questioning where do low income earners expect to have their meals, at the hawker centre, foodcourt or the restaurant ?
ReplyDeleteGoing by this sort of arguments, does it not imply that our PAP Ministers (LKY & GCT included) do not expect to dine at any of these places unless they are of min Michelin rating especially when we look at the kind of pay they demand for themselves ?
Why don't this Professor father-in-law of one of LKY's sons just admit that we need some kind of min wage to begin with ?
It's just appears he trying to talk big, isn't it, especially after all these years of silence ?
This lee yi shyan was from the arm forces of singapore.
ReplyDeleteWhat do you expect of him and hs attitude as a yes man in
this society. He cannot expect to think out of the box as that will be out of line for one who was train to be a YES YES MAN.
No. He was only in mindef from 87-91. Not long enough for the forces to change his mindset.
DeleteLee Yi Shyan was Chief of IE Singapore when I heard him speak before his 'promotion' to higher mortal status. Could speak and motivate very very well. He was from the EDB before, so no surprises there. Guess that was the motivation that he was picked to be inducted into the PAPies.
Poor Singapore...under this "new" generation of PAP "leaders"...we seeing a real Animal Farm "live" as written by George Orwell...
ReplyDeleteWe have the "pigs" in charge...followed by their "dogs"...and the rest expendable fodder...
Sick.
I would call him a brainless regurgitator, with no opinion of his own. His motto reads : Whatever boss says, just regurgitate. Bu Yong Sang Now Jing !
ReplyDeleteGentlemen,
ReplyDeleteLet me remind you that the GLCs and NTUC shits are all over this tiny red dot. Every corner you go on this 700 sq km, you sure bound to step on their shit. That is why refuse till today to implement min wage when so many countries got that! Do you think they would want to increase your pay drastically? Those GLCs and NTUCs only know how to squeeze and suck citizens dry to increase their bonuses and bottom line! Got it?
wah lao eh, this guy still got the cheek to talk about productivity when he was the one who failed in his mission as deputy ceo of psb, later ceo of ie singapore. go check it out for yourselves. everywhere he went, he performed so badly but he was always rewarded with his next posting, i mean double triple promotion hor, not to the next immediate level. dun you guys even try to think that i suka suka lie bcos you can verify them. small failure not enuf, he went on to bigger and bigger failures until pechah then crawl back home from suzhou. so who want to argue with me that we won in suzhou? in fact it was nothing wrong to lose but the problem was that singapore was utterly shamed in suzhou. the prc there were literally rofl so hard that millions were having stomach cramps from that episode. so i was not surprised when i heard that he was ushered into politics and why should i be surprised to come to know later that he was made a little minister. anyway coming to the essay, this man was never heartless...never, he is just lost. may God have mercy on you yishyan.
ReplyDeleteWe are constantly moving up (or down) the world ranking, but always to the wrong direction. It is now rank the 9th most costliest city to live in. Perth ranks 12.
ReplyDeletehttp://sg.finance.yahoo.com/photos/world-s-10-costliest-cities-to-live-in-slideshow/world-s-10-costliest-cities-to-live-in-photo-1334120898.html
Compare salaries and welfare (subsidies) for both countries.
Haha! Coz the costlier SINKapore is (e.g. higher property prices), the wealthier the pappies and familee will be.
Delete'Suffering and deprivation is good for the soul.' - Mrs Lee Kuan Yew
http://young-pap.blogspot.com/2009/01/we-have-been-brought-up-to-be-frugal.html
Now the Cheaper+Better+Faster NTUC chief Lim Swee Say taking turn to make his voice heard:
ReplyDelete===========================
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.
===========================
Wage shock therapy ‘very risky’: Lim Swee Say
http://sg.news.yahoo.com/wage-shock-therapy-%E2%80%98very-risky%E2%80%99--lim-swee-say.html
Singapore is going to explode economically. It's really only a matter of time. I think ministers are very jaded and not at all in tune with what the country needs. They see this country as a corporation, not as a place of residence where millions of lives depend on authority to make wise and ultimately right decisions.
ReplyDeleteWith the influx of foreign workers to boost our GDP, there is also an outflow of Singaporeans who have had enough of this system and are migrating to somewhere else, where economy may not seem as competitive currently, but have a better pace of life because they can afford their livelihood instead of living in debt in their own country.
Singapore may be rich with in terms of what they have in reserve, but it is a country that has been known to hoard. I'm not bad mouthing the government, but from the way history looks, we have been hoarding, and only giving what's best to whom we deem as elites. Sad as this is, it was how this country came to be controlled. We have been hoarding the best from wherever we can find, and obviously that does not exclude monetary wealth. This hoarding has caused Singapore to be indebted to its own citizens with the taxes, HDB, ERP, COE etc. We have also been hoarding from foreigners who have been shortchanged by promises undelivered.
With all these upcoming articles about growing dissatisfaction (rightfully so), wider gap between income groups, lack of affordability to even survive in our home country, it is only a matter of time that Singapore implodes and whoever is left in this country has to pick up the pieces that they couldn't even afford to have in the first place.
It is a stark and bleak reality that we all have to face. And judging by how the way things are going, if there isn't a radical change that will be taking place soon, this country could very well ruin itself with its superficial goals of wealth and success in the world.
Good Morning Gentlemen,
ReplyDeleteThe issue not how strong is the link between higher wages and increased productivity.As Lee Yi Shyan mentioned viz-a-viz, Singapore must be careful about raising wages without a corresponding increase in productivity.
Rather what we need to ask is what conditions must first be obtained before it is possible to prosecute on the imperative of higher worker productivity?
Let me put it another way to all of you gentlemen - if let's say the cost of labor is dead cheap. Then why would there be any incentive for let's say a building contractor to even be mindful of man hour cost? And if that is the case, why should architects for that matter even property developers have any motivation design buildings to optimize the use of labor?
My hope is that all of you are now internally persuaded as to how crumbly the link is between higher productivity and higher wages - is at best a red herring. At worst it misleads.
If the goal is to increase workers productivity. Then wages need to be set high FIRST. Instead of predicating the entire argument where the onus is on the lowly paid worker to increase his output per man hours - such a formulation is akin to putting the cart before the horse and expecting to make progress.
Only a super duper idiot or someone who is out to insult my intelligence will utter such nonsense.
My point gentlemen is simply this, the main bottleneck in increasing productivity is NEVER the workers, but management, specifically the attitudes which they hold. Usually lacking any background in manufacturing and production optimization techniques, these armchair decision makers usually fail to understand and appreciate the potential of and opportunities in raising productivity; they fail to see it as the wonder weapon in increasing competitiveness and countering inevitable increases in wages, raw material, and energy costs. This is why we have to regularly up with stupid statements that try to pass themselves off as wisdom. Not discounting of course the role of the propagandist press.
Gentlemen what you need to ask yourself is a very fundamental question: IF the goal is to increase wages -then which one should come first - is it higher productivity followed by wage increments? Or is it wage increases that provide the motivation for firms to increase their productivity?
This I shall leave to the perceptive reader.
Good Day.
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ReplyDeletebut I can share that I slack a lot at work. but I do pump in x10 hard work as and when needed and out perform expectations. tats life for me in Australia. so minimum wage / lower hours does help
When wages are artificially restructured, the cost of production for firms rises. When this happens, they can choose to do one of two things.
ReplyDeleteThey could pass on the increases in cost to consumers. For businesses with large profit margins and price elastic demand, we may not see any increases in price, but for most businesses, the increase in wages cannot be afforded without raising prices. Any increase in cost of labour could result in corresponding increases in price of goods and services across the board (since raising wages spans all industries?), causing cost-push inflation. This is bad because even if there is an increase in nominal wages, after adjusting for inflation, the workers barely see an increase in purchasing power. It’s like, you well may have more money in hand, but suddenly everything just costs more and the increase in wages is useless.
The other thing they could do is scale down production so as to keep their costs of production relatively constant. For example, say a firm could employ 10 people before wage restructuring. Say wage restructuring resulted in a doubling of wages (just a random number), the firm may choose to employ just 5 people so that the cost of labour remains constant for them. As we know, when financial troubles hit, the first group of people to go are the lowest-income bracket. So, in our haste to increase wages, we mustn’t forget that we will end up raising the unemployment rate, and that just makes matters worse for the lower-income bracket.
I think the solution to this is retraining? If we say that a newspaper distributor or toilet cleaner is at the peak of his productivity potential, perhaps they can sign up for programmes that impart skills to them that are useful in up-and-coming industries. Industries that enjoy rapid growth are usually more generous in their pay. By retraining, they are also improving their productive capacity and an increase in wages is likely to happen naturally. Also, the prices of most goods and services remain constant and this means that any increase in nominal wages will translate into increase in real wages. :)
What to expect? 180,000 filipinos are working in Singapore, many working in PMET industry. No wonder many Singaporeans above 40 years old are retrenched and working as taxi driver.
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