Pm lee: Singaporeans' wages will fall if productivity falls

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An honorable member of the Coffee Shop Has Just Posted the Following:

PM LEE: SINGAPOREANS' WAGES WILL FALL IF PRODUCTIVITY FALLS

Post date:
30 Apr 2015 - 7:53pm








Prime Minister Lee Hsien Loong repeated his stale message today that if productivity in Singapore does not grow, wages cannot grow as well.

But this is a stale message that Mr Lee has been repeating since way back to at least 2012 but the issue has still not been resolved.

Mr Lee said: "Wages have been rising in the tight labour market, but this is not sustainable. If productivity continues to stagnate, after a while so will wages, which may even fall back."

However, Mr Lee had labouriously repeated this message since 2012 but little effective has been done to address this.

In 2012, Mr Lee said at the May Day Rally that, "you must get at least 30 per cent productivity growth in ten years" so that "we can raise the workers’ wages by 30 per cent".
He said that to do so, "that means every year, I need to make 2.7 per cent productivity growth. 2.7 per cent year by year, 10 years compounded, I can make 30 per cent in a decade and then we can raise the workers’ wages by 30 per cent."

However, since 2012, Singapore's productivity growth has been dismal, to say the least. In fact, from 2011, productivity in Singapore not only stagnated but even fell.
In 2011, productivity fell by 2 percent, in 2012, it fell even lower by 2.6 percent. In 2013, productivity was zero and last year, productivity yet fell again by 0.8 percent.
Productivity never picked up since 2011. One wonders where Mr Lee gets the deluded belief that productivity should grow for wages to grow.

Not only that, real wages in Singapore for the median income earners have largely been stagnant for the past 10 years and for lower-income Singaporeans, it has been stagnant for even longer - for 20 years or so.

In fact, real wages have been estimated to have only grown by 0.5 percent annually for the past 10 years.

Mr Lee also said: "We have to get used to slower growth than before, because our economy is more mature, and we have tightened up on foreign manpower."

However, what Mr Lee failed to also mention is how the low economic growth in Singapore is also due to the overly-high income inequality in Singapore.

An OECD report at the end of last year revealed that, "The single biggest impact on growth is the widening gap between the lower middle class and poor households compared to the rest of society."

OECD Secretary-General Angel Gurría said: “This compelling evidence proves that addressing high and growing inequality is critical to promote strong and sustained growth and needs to be at the centre of the policy debate."
This was also what a report from the International Monetary Fund said, that "lower net inequality [that is, after tax and transfers] is robustly correlated with faster and more durable growth."

As such, what Mr Lee had failed to mention was that the low economic growth is also a direct result of the income inequality in Singapore.

Indeed, Singapore today has the highest income inequality among the developed countries and because of that, it has also resulted in a whole host of social problems: the lowest levels of trust after Portugal, the highest prisoner rate after the United States, and one of the lowest social mobilities among the developed countries.

Yet, Mr Lee said, "We must still be concerned with growth, because that is how we can afford to invest in healthcare, education and our people."

But again, what Mr Lee conveniently ignores is how Singapore already spends the least on social protection, health, education and pension among the developed countries.

In fact, Singapore's income inequality is so high precisely because the Singapore government spends the least on social protection among the developed countries, even though the government has tens of billions in surplus every year that it does not declare to Singaporeans which is more than enough to provide free healthcare and education to all Singaporeans.

However, Mr Lee continues to bear down on the propaganda that growth is needed for the government to be able to spend more on social protection.

First, the government does not spend more on social protection because it does not want to - there is more than enough money over the past 10 years for the government to do so, regardless of the level of economic growth. Second, economic growth is low also become the government spends the least on social protection, which results in high income inequality and thereby low economic growth.

In short, the stagnation of economic growth in Singapore is a direct result of the Singapore government's perpetuation of the income inequality.

Not only that, Mr Lee had the cheek to say, "Nowhere else in the world do Government, employers and workers work closely together, give-and-take and create win-win outcomes out of difficult circumstances."

However, what Mr Lee said is severely out of line and out of touch with the lived realities of Singaporeans. In the first place, it is widely known that workers have very little rights in Singapore.

In fact, Singapore has the least employment protection legislation among the OECD and Asia Pacific countries, after the United States. Not only that, Singapore is one of very few countries in the world which still do not have income protection for unemployed workers.

In short, Singapore's workers basically have very little employment protection, or next to nothing, not least because the Singapore government also controls the labour union by putting its own minister in charge of the labour union.







Not only that, the Singapore government also controls a significant portion of businesses, where the largest companies in Singapore are government-linked and Singapore has been ranked 5th on The Economist's crony capitalism index, whereby it is the 5th easiest for the rich to get rich in Singapore if they are affiliated to the government.

Also, the government had in the 1960s to 1980s arrested hundreds of labour unionists and detained them without trial, and crippled the a segment of the labour unions, and then taking control of the existing one.

As such, Mr Lee can make lofty clams that "Nowhere else in the world do Government, employers and workers work closely together" but this can only stand true in Mr Lee's own imaginations.

Yet, Mr Lee continues to ignore the realities of the problems in Singapore due primarily to the income inequality and the government's resistance to mediate the situation, and he instead said, "We need a fresh approach. This is why we are working hard to make SkillsFuture a reality."

But SkillsFuture had been panned for being only a symbolic gesture, without any real effects when it comes to improving the wage situation of Singaporeans.

Mr Lee said, "As a society, we must be supportive and open-minded. We should not measure people by their paper qualifications, but by their skills and contributions."

All nice and well, except that when it comes to being supportive, it is clear that the government is only paying lip service. The rich-poor gap in Singapore is the widest among the developed countries. In fact, it is estimated that 30 percent of Singaporeans live in poverty where they cannot earn enough to even spend on basic necessities.

SkillsFuture is supposed to provide support for polytechnic and ITE students but no where in SkillsFuture does the government has a plan to increase wages. Where the starting pay of polytechnic students hover at around $2,000 and where 30 percent of Singaporeans who live in poverty earn less than $2,000, this means that polytechnic and ITE students are expected to live on poverty wages, especially since these groups of students can expect their wages to remain stagnant for the rest of their lives.

In fact, Singapore today still does not have a minimum wage. Cleaners still earn only $1,000 and this is half of the basic necessary for Singaporeans to have even a basic living. Not only that, when compared to countries with a similar cost of living, Japan has a minimum wage of $2,000, Australia $3,000 and the lowest-paid workers in Switzerland and Norway earn a minimum of $3,000 and $5,000 respectively.
In short, Singaporeans are severely shortchanged by the Singapore government, or more specifically the PAP-run government.

One is hard-pressed to understand why Mr Lee even bothered to give a May Day speech for workers.

Basically, workers in Singapore are given a tough lot in life, primarily due to the Singapore's government lack of responsibility to its citizens.

Mr Lee said that Singapore can achieve growth, raise wages and achieve better lives for all if everyone worked together.

However, it is clear that the PAP-run government has not kept its side of the bargain. In fact, the PAP-run government has reneged on its responsibilities.

Mr Lee might say that everyone in Singapore should work together but where the government can only make lofty claims without acting on them, then they will remain lofty and the lives of Singaporeans will continue to be compromised by the Singapore's government's lack of responsibility.


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