While union leaders in other countries are always asking for the best wages possible for their workers, the role of union leaders in Singapore is very different. They moderate wage demands during good times, persuade workers to make sacrifices during bad times. With bad times around the corner, Lim Swee Say will be very busy in the coming months explaining why workers have to make sacrifices.
Recently Minister Lim has been on the news persuading workers not to ask for higher wages as it will worsen inflation. His logic : Higher wages =>inflation. This is very interesting. As our state own monopolies, many of which are still wildly profitable, move ahead with price hikes, not a single minister has stood up to condemn these hike as inflationary and unnecessary. We are told that these hikes are necessary because costs has gone up and service quality will fall if we don't accept them. But when the low income workers whose real wages has fallen below what is sufficient for basic living ask for a hike, Lim Swee Say springs into action to explain the economic theory of the "wage-inflation" spiral. However given that our inflation is due to food and energy which are largely imported or cause by govt monopolies raising prices, how will wage hikes for ordinary workers cause prices to spiral up? Will the rise in the wages of a cleaner cause oil prices to rise and spiral up?
In the coming months, our leaders will ask us to tighten our belts as the economy slows. This is for our own good because our wages will remain stagnant as various state own enterprises raise their prices to maintain their profits.....so it is best for us to be prepared for these increases. When we get out of the coming slowdown, we have to remember that it is good leadership that took us out of it and not a recovery of the US economy.
NTUC chief concerned global economy heading towards stagflation
Channel NewsAsia - Saturday, August 2
SINGAPORE: Labour chief Lim Swee Say has urged workers to work together to cope with a global economy which may be heading towards a state of stagflation — one sparked off by low growth and high inflation.
The NTUC secretary general made the call in his National Day message.
Singapore’s National Day is being celebrated amidst concerns about the slowing global economy and rising inflation, said Mr Lim.
And to tackle these concerns, the labour movement, the employers and the government are addressing two core priorities.
First, coping with the impact of inflation without being caught in a price—wage spiral.
"The worse thing that any country does at a time of high inflation would be for the unions and workers to push for wage inflation. Wage inflation is different from wage increment. Wage inflation means you are pushing up wages to fully offset the inflation," said the labour chief.
He added that companies in the unionised sector are currently in talks on their annual increment.
One key consideration that is being taken into account in these negotiations is the current state of inflation.
The labour movement noted that private sector companies in the unionised sector have been giving a higher percentage of built—in wage increases in the first half of this year compared to last year, with the figure in the range of 4.4 per cent against 3.8 percent in 2007.