Sunday, April 15, 2012

Breaking out from the cycle of cheap labor and low productivity....Part 2

Professor Lim has responded to criticism of his "shock therapy" proposal[Link]:

"'Speaking of free markets, I hope Minister Lee Yi Shyan does not get the cattle market or the fish market mixed up with the labour market, which deals with human beings." - Professor Lim Chong Yah


For a population that is fairly literate in economics, I think people can appreciate the logic of Professor Lim's arguments and understand the risks involved. There are trade offs and uncertainty - we should not over simplify the the current situation and the severity of the problems we face with income inequality, rising poverty and low wages. Today, 400,000 Singaporean workers or 1 in 5 earn less than $1500 [Link] in a city that is the 9th most expensive in the world to live in[Link] surpassing New York, London, Frankfurt and Hong Kong.  Unlike the other cities, we have no rural or less expensive areas for the poor to escape the pain of poverty. Singapore has little in the way of safety nets and welfare to mitigate the effects of poverty and large income gap. If we want to avoid welfare spending, we have to get wages up to otherwise there will be severe economic pain among a large segment of Singaporeans. So far nobody denies there is a problem just how to best to fix it and whether it warrants "shock therapy".

The PAP govt which caused this massive problem by importing cheap labor to get fast GDP growth shows very little sense of urgency to fix it even as so many Singaporeans suffer the consequence of their bad policies - the rising anger against the PAP is not due to "poor engagement",  poor communication, or other euphemistic reasons cited by the PAP,  fundamental changes are needed to tackle this rising resentment and the PAP is still not on the right track.

Remember what we were told when the foreign influx grew from a trickle to a torrent? We were told the large influx will benefit Singaporeans creating jobs and higher incomes for households. Years later, we discovered that this is not true and a growing number of Singaporeans faced stagnant or falling wages and older workers faced structural unemployment. When the wages for low income workers started stagnate, the PAP govt told us that retraining is the key to fixing this and no major adjustment was need for the large influx of foreign labor. More than 10 years later, we there is little progress because low wage workers were simply retrained from one low paying job to another. You ever wonder why the trust between the PAP and the people is so badly eroded?

A few days ago, Minister Lim Swee Say who is also the NTUC chief reiterated the gradual approach of the PAP govt to drive up productivity and have wages follow[Link]. It is not clear how productivity can rise when enterprises still have access cheap foreign labor - what motivates them to invest and upgrade when they can just employ 3rd world labor? Suppose we put this concern aside and assume Minister Lim and other govt agencies succeed at driving productivity up. I want to show you this chart for the only other developed  country that has the same level of income inequality as Singapore:


For the last 20 years productivity in USA has been rising and real wages has remain stagnant. This is known as the wage-productivity gap. Where did all the money go when productivity of workers go up?  In a society where income inequality is very high, it goes to the top management as excessive compensation packages. During the Reagan era, the power of independent unions declined and along with it the power of ordinary workers to negotiate for better wages. The social and political factors that  causes changes in wages to correlate with improvement in productivity have over time disappeared from the American economy and these factors are even more absent here than they are in America, In Professor Lim's words....the labor market simply became the cattle market - the free market can take the cattle market anywhere without much repercussion to people and society but the same cannot be said for wages.  There is real pain and social consequences when you just let labor markets behave like the cattle market to be determined by free market forces. Lets not forget the primary purpose of an economy - it is not to maximize GDP growth or be a servant of the free market but achieve outcomes that will improve in the quality of life of ordinary citizens.

"From the business perspective, it's not just productivity increase that we need, we need the economy to do well so that revenue can go up. When revenue goes up, you can better afford higher pay for the lower-income. It's not just the one aspect of just increasing the low-income earner's salary, it's actually an overall aspect of whether the economy is doing well, whether you get the demand for your services and products, whether your revenue would increase, whether you can meet the bottom-line that you've set for yourself. " - Teo Ser Luck[Link]

What Teo Ser Luck said is disconnected from reality, pro-business and relegates the low wage problem further down the list of priorities for the PAP. He is telling us that raising productivity going is not sufficient, we should wait for the economy, revenues and bottom-lines to improve before we do something for low wage workers. Let me ask you what have the economy, business revenues, and business profitability been like the last 15 years? Our GDP growth has been great, business revenues have been expanding and businesses are so profitable that business profits as a % of GDP is at a record high but the wages workers at the bottom 20% have been stagnant or down. Yet Teo Ser Luck is telling us to "double down" on what has already failed to improve the lot of our workers. Where will our poor workers be if we go with what the PAP plans to do 10 years from now....? I shudder to think.

The PAP has a habit of going along a failed strategy even after everyone can see the deleterious effects on our society and people. We just have to go back to what they said about the foreign talent policy as recently as 1-2 years ago to keep prolonging the policy even as the negative effects become apparent to everyone else. When they can no longer deny the problem, they will perform a few tweaks and claim that the problem will be solved and all that is needed is time. But this low wage problem has been with us since the 90s. After denying there is a problem, they will admit it when it is no longer credible to deny it. Then they will make a few tweaks and proclaim that those tweaks sufficient to solve the problem. Those who have thought through the problem know that we are not heading towards a solution but a deepening of the problem- Professor Lim proposes shock therapy, Ho Kwon Ping suggests we "complete the wage revolution" by raising domestic service sector pay[Link] and Tommy Koh supports minimum wage[Link]. But the PAP will not move from its current trajectory because it is deeply entrenched its ideological box - they can't think out of it until the worms eat through wooden walls and show up on the inside - then they will claim nobody could have possibly foreseen the looming disaster ....and these people paid million dollar salaries will deny, delay, resist amd follow old ideas until they are broken beyond repair.

82 comments:

Anonymous said...

"The PAP has a habit of going along a failed strategy even after everyone can see the deleterious effects on our society and people."
Lucky Tan

If I were PAP, no strategy has really failed, as long as my election strategy to win at least 90% seats succeeds at every election.

Or my strategy is considered failed only if the opposition can contest all seats at elections as one party like the PAP. But can they?

So PAP strategy will always succeed where it matters most.

Anonymous said...

"...everyone can see the deleterious effects on our society and people."
Lucky Tan

Not everyone lah. It depends on who you are, whether you are LKY, LCY, LHL, Lucky Tan or even me.

Each one will see it differently lah, right or not?

Anonymous said...

People with conscience have already spoken. PAP government is not stupid, they definitely know the problems. What they lack is political will. Meanwhile, the party and dance continues until the day the roof falls.

The last hope of change rest with Singaporeans.

Anonymous said...

"'Speaking of free markets, I hope Minister Lee Yi Shyan does not get the cattle market or the fish market mixed up with the labour market, which deals with human beings."

Well said. Cattle and fish are slaughtered and caught dead to be sold off like commodities to serve human needs.

Labour, or human beings, will fight back and shout, scream & kick if they feel that they are being 'slaughtered' or going to be 'caught dead'.

Anonymous said...

"'Speaking of free markets, I hope Minister Lee Yi Shyan does not get the cattle market or the fish market mixed up with the labour market, which deals with human beings."

Ah ha, practical economic lessons. Not those simple theories on supply & demand, productivity vs wage.

Veritas said...

Lucky you think too kindly of them. PAP leaders are not only able to see the effects of their policies but these policies are carefully crafted to ensure wealth trickle up and workers get exploited.

Kuan Yew made the below comment about Thailand 1997 crisis and yet today, he looked exactly like a hypocrite.

Many Thai leaders in Government and opposition have personal interests in the fate of finance companies and banks, hence a natural reluctance to discipline them, ......
So warning signs were ignored and remedies postponed

Anonymous said...

"It is not clear how productivity can rise when enterprises still have access cheap foreign labor - what motivates them to invest and upgrade when they can just employ 3rd world labor?"

You spotted it.

Once you become a high cost country, the room to add value (productivity vs cost) becomes tighter and tighter for mass production / service (supporting the labour market for average joe & jane) as any country with lower cost structure will just grab your market share - and in our case property development seems to be more profitable and bumping up business operational costs in a vicious cycle of needing higher productivity and human labour having to chase & meet these costs.

Anonymous said...

Yes, you are right.

The economy has been growing very well the past decade and yet wages remain low.

So why does Mr Teo Ser Luck sees that we need to have better conditions to implement wage increases?

Its warped logic.. and the only reason for this is that they are the boss and say what they like.

Pity we cannot just ignore them.. there is always a crowd around when they visit or make a statement.

Lye Khuen Way said...

Seem that no amount of reasoned plea even by one as renowned as Prof Lim can move the PAP leaders to act in the interests of the larger community. They are just selfishly and shamelessly clingingly to their million$ yearly pay check plus bonus & allowances.
Just wait till 2016, if we are still together as a country or city-state, to see if there are still enough dumb /daft Singaporeans voting for them.

Anonymous said...

Nowadays, I no longer give a fark about what the Pro Alien Party does or say.

I hold them responsible for the mess we are in.
We pay them million dollar salaries.
Why the fark do I also have to help out with "constructive" feedback and suggestions to clear the mess they created.
More unpaid national service for me? Fark Yew!

You break it.
You farking well fix it.
I'll keep voting Opposition until this gets fixed.

And I'll happily help convert anybody I can find to the Opposition Parties side.
This is National Service I'm happy to perform.
The Pro Alien Party is the problem.
Voting Opposition is the only solution.

Anonymous said...

some countries dying of new funds should allow singaporeans to migrate freely, so that they can live in a nice freehold landed house, drive a nice car and take out their cpf to invest in that country.

Anonymous said...

Why the hell should Singaporeans leave?
This is our country.

The pimps who are selling us out so cheaply should leave Singapore instead.

Anonymous said...

Look people, PAP is the best government in the world, click on link below for proof.

Sorry, Lucky Tan, once you read what is in that link, you no longer need to blog against PAP's policies anymore, their policies are perfect & the best in the universe! Enjoy... http://www.facebook.com/DemoncraticSingapore#!/photo.php?fbid=343657629004572&set=a.274164129287256.58504.201649463205390&type=1&theater

Anonymous said...

If hundreds of thousands salary cannot satisfy CEOs and Ministers and only multimillion dollars paycheck can, why should workers be contented with minimum wage that add only butter to their bread?

Lucky, you need to see a doctor soon.

Anonymous said...

These hypocrites preach the gospel of salvation to the poor but themselves collecting tithes,from the poor, so they can build trendy homes to live in while the "saved poor"( because of good preacher like lucky) can live in "castle in the air".

You see, gov are not the only people who fart. Preachers fart too for a living.

Anonymous said...

There is another facet to the debate which is that cost of living has gone up too much. Reduce cost of living to 1990 level and screams for higher wages may start to abate. How to afford?
First, begin to recognize the huge cash from land sales into the yearly budget like hong kong.
Secondly, reduce the ridiculously high defense spending becos we now spent more than Malaysia & Indonesia combined. Defense spending in excess adds no long term value. The real security threat is 6th lowest birth rate in the world. In time to come, we won't hv the enough soldiers to defend the country.
Thirdly, profits from govt owned monopolies should go back to reducing costs with a reasonable amt kept for reinvestment. Singapore Power, SMRT, PSA, PUB, Changing Airport, Singapore Pools and others will easily add $3 billion into the govt budget without hurting their ability to reinvest in their operations. It is time the real shareholders of these companies (the tax payers) get to enjoy the fruits of these investments, not just the executives running them.
Easily $10 billion can be added yearly in the govt coffers to lower cost for Singaporeans. It is time to rethink how the govt money is managed very year!

Anonymous said...

educators fart too. and they beget graduate farters some come from Yale and some Oxfart.

Anonymous said...

Singapore already has huge reserves if you start to study the figures. Temasek Holdings is supposed to have US$180 bil, MAS is managing a foreign exchange reserves of US$200+ bil and GIC is estimated to have US$400 bil by some investment bank. Including the hidden reserves (cash retained from past profits & not reinvested) sitting inside the stat boards that are owned directly by the govt and not Temasek.
We have huge reserves already and it simply does not make sense to keep adding furiously to it when so many Singaporeans are hurting from govt related cost increases. It is time to get the executives who make millions every year to earn their keep. And if they are as good as warren buffet who turn $100,000 to $40 bil, can you imagine how rich we will be in 20 years time without adding any more money.

Anonymous said...

Do you want to prosper in your business? Do you want to prosper in your job or in your pursue of education? Do you want to prosper in your finances and achieve financial freedom? Or do you simply want to prosper with your family and love ones? All of these prosperities are offered by God to us. He wants us to prosper in life. This is the reason why He has given us His instructions and commandments – so that we may follow and obey them to prosper our lives.

Anonymous said...

Did you just fart?

Anonymous said...

Investing in people is a complete waste of time.

Ask the SMEs
Ask the bosses

If people cannot learn on their own, its money down the tubes and pointless in pouring more money or raising wages

Foreigners know how to look after themselves.. they leave their homes to earn money. They have purpose and meaning.

Singaporeans want doorstep service.

I say all of us leave town and go work elsewhere where your efforts will bear fruit.

Anonymous said...

Find ways that align your physical “energy” with the “energy” of the wealth and prosperity that you desire.

Anonymous said...

Dear PAP trolls ... please do your homework!
1. Lucky is a millionaire who has benefitted greatly from PAP policies.
2. Lucky is pro-LGBT, secular and hard core follower of American capitalism ... exactly like PAP!

Leave Lucky in peace to dispense his advice to the opposition parties... just ask GMS and TKL how useful it was ...

Anonymous said...

The Great Dictator - speech (4 minutes only)

http://www.youtube.com/watch?v=5IvPIWzQcUY

Anonymous said...

PAP is the largest employer. They know Singaporeans are sufferings but Temasek Holdings via GLC-linked companies are enjoying cheap foreign labours. You think PAP will stand on the side of workers. NTUC is not a worker's union, it is employer's union under different name. Todate, other than SIA, I hardly see our labour union fighting for the workers. Because those chairman, president, chief are employers themselves. Got it?

Recently my contruction boss employed 200 Indian workers to paint just a single buildings. I asked him how big is the building, he said is 2-storey high. I was shocked that 200 indian workers to paint a 2-storey building sound like the indian turning the wheels in your previous articles. See?!!! this is what PAP has called PRODUCTIVITY.

Anonymous said...

Dear Lucky
I know you mean well.
But I must register my protest with your last paragraph.

"Professor Lim proposes shock therapy,
Ho Kwon Ping suggests we "complete the wage revolution" by ...
and Tommy Koh supports minimum wage .....

It sounds so much like PAP.
With all their Committees of Inquiry,
hundreds testimonies of expert witnesses etc.

Respectfully, I no longer care what Prof Lim, Ho Kwon Ping and Tommy Koh or any other expert or elite thinks about minimum wages.
Th only important thing is what "we the citizens of Singapore" think and value.
Do "we the citizens of Singapore" want a minimum wage because it is the right thing to do by our fellow citizens?
If YES, then let's do it!
And if we have to make this into an election issue in GE 2016, then let's do it.

I have just about had enough of kow-towing to elites and experts.
If I'm supposed to fight and die for Singapore in a war, I bloody well want to make sure I die for leaders I respect.

Anonymous said...

"I was shocked that 200 indian workers to paint a 2-storey building 16/4/12 02:31"

There are 2 reasons:
Each worker paid S$5K - S$7k to come to Singapore to work. The employer pocket part of it.( although the employment can be less than 1 year)

Some workers are sublet out to small contractors. Each earned more than $100 a month for your boss.

Besides, the project value has been inflated between the main and sub con to more than S$1mil. If not your employer will not be able to employ so many foreign workers.

Anonymous said...

Teo Ser Luck sounds even stupider with this quote than his previous "three cheers" for himself at the election rally. This is PAP's golden boy of pure-looks-no-substance.

Lucky explained well. We are hit by the double whammy of low productivity and skewed income distribution. All thanks to PAP's massive foreign influx and a state machinery that favours the rich disproportionately. The former needs no further elaboration; the latter comprises personal tax breaks, company subsidies and pro-employer's stance.

If you consider how PAP's roots in the 50s and 60s, you should not be surprised that PAP is selling out Singaporeans. Playing treacherous tricks for its own agenda is PAP's special forte.

LKY started his political career with absolutely no ties to the Chinese speaking, low income ground people. His only weapon - his cosy relationship with the colonial British masters. By manipulating and then betraying his Chinese speaking counterparts, he managed to penetrate the ground.

That is PAP's essence. Just take stock of your life now and compare it with that five, ten years ago. Ignore the wool PAP amoral leaders are trying to pull over youe eyes. And ACT NOW!

Anonymous said...

"You ever wonder why the trust between the PAP and the people is so badly eroded? "

Is that so?

http://sg.news.yahoo.com/s-poreans-not-surprised-at-trust-survey-results.html

Either you have giving rise to your own frame of reality OR the mass media in Singapore are great liars and manipulators.

Cheers!

Snark said...

It seems like the white pappies just cannot leave the suggestions of an intellectual alone, probably as they have the most clout and contain the most weight.

Opinions that come from one with intellectual standing cannot be allowed to run loose in the minds of the common uneducated masses, or they may start having dangerous ideas like 'minimum wage' or 'income equality' or even 'meritocracy'. THE NERVE!

As of the time of this post, even rear admiral Lui (insert profanity here) has come out to pooh-pooh this proposal by an economics prof. Any more people that need to be activated? Old Sage? Tharman? Pinky? Some nameless flunkie?

Anonymous said...

Fantastic piece, Lucky. U have debunked the pap point by point. U have blown off their figleaf to show their naked intention to cheat Singaporeans. U have shown the true colour of the wicked pap.

Anonymous said...

Lots of hot air and chest thumping.

Its politics. and if there is no understanding what drives politics,
it will be just thumping and headless chicken running around the backyard... slowly bleeding to death.



Be a spectator & watch.


Dead in minutes.

Anonymous said...

When we look to unravel the situations and get heated up in pointing fingers, I think we must remember that the heart of today's issues are really the "desired" outcomes of the previous policy makers at a time when taking short cuts and bold risks were the rage.

Anonymous said...

Lucky, put in this way,if I and a group of us were damn strong pap supporters have decided since two general elections ago to vote for opposition, do you think that as times go by, they can still get the 60% mandate?

Anonymous said...

Ask the right questions:

Which industry employs the most labour intensive approach?

and

Who are the employers?
How are they affiliated to Government?


What was the original intent of this approach?
Who presented it?
What has changed since then?

Some questions may evoke very uncomfortable feelings.. depending who the question is directed.

The usual comment would be:

"These questions serves no purpose except to being divisive - lets move forward..."

It appeals to many a Confusion mindset.. peace & harmony.

And this is how it will end.

Anonymous said...

"then they will claim nobody could have possibly foreseen the looming disaster ....and these people paid million dollar salaries will deny, delay, resist amd follow old ideas until they are broken beyond repair."

The same lame excuse they use they no one could forsee that importing population requires infrastructure. Mah Bow Tan is an example, an the state media defended him till the final hour..

Anonymous said...

You hit the nail on the head with every point! The PAP has instituted policies that benefit the minority at the expense of the man in the street.

Their inability/refusal to acknowledge problems pointed out and solutions provided by outsiders is and will always be their Achilles heel. Unfortunately, Singaporeans will have to bear the brunt of this arrogance/lack of foresight until 2016.

Anonymous said...

I like the last sentences:

But the PAP will not move from its current trajectory because it is deeply entrenched its ideological box - they can't think out of it until the worms eat through wooden walls and show up on the inside - then they will claim nobody could have possibly foreseen the looming disaster ....and these people paid million dollar salaries will deny, delay, resist amd follow old ideas until they are broken beyond repair.

Anonymous said...

If hundreds of thousands salary cannot satisfy CEOs and Ministers and only multimillion dollars paycheck can, why should workers be contented with minimum wage that add only butter to their bread?

Lucky, you need to see a doctor soon.

15/4/12 19:28

Not just butter but kaya also. That way, the stupidity is sweeter.

Anonymous said...

//Today, 400,000 Singaporean workers or 1 in 5 earn less than $1500 [Link] in a city that is the 9th most expensive in the world to live in[Link] surpassing New York, London, Frankfurt and Hong Kong.
Lucky Tan//

//some CEOs from state own corporations earning from $5.2millions to $11.6millions. (The Straits Times Monday April 16, 2012 B16)//

And our ministers’ pay from of $1.1 million to $1.76 million (grade MR4 to MR1)

很痛心! 现今的精英们大多数都没有意愿要为民谋福利而只是顾着为自己谋财富。

Very sad! Most of the elites nowadays are more interested in making money than raising the livelihoods of the people.

Ng Eng Hou said...

The reason for their stubborn attitude is because we keep voting them in. They take it as we agree to their thinking.

I'm afraid if we really want reasonable changes, we will have to change the government!

Anonymous said...

Do we know if 400,000 of workers are ALL singaporean workers? What profiles and % may be foreign workers?

I was informed that Switzerland does not have a MW across the board, but at least they have identified 40% of some of its sector to have MW. I don't see why SG can't start on that basis instead of rejecting the idea wholesale?

For LSS to say that salary increase might not follow an increase of productivity is presumptuous. The workers may feel better about their jobs and take them more seriously if paid high wage. Economists call this effect 'an efficiency wage' and there is a substantial body of empirical research to support it.
Again, they used the 1980s case to dismiss the entire premise.

Now that was 30+years ago. Unless LSS is saying that productivity all these years, and especially the last decade has not risen thus the pay rise is not justifiable, then the onus is on him to prove the evidence. I personally find it hard to believe that local workers productivity can be any worse off than a foreign workers on cheap pay. More likely, the local worker is simply not motivated (& pragmatically right too) not to take the low pay. Another way to see how MW could increase productivity is by reducing turnover (which is a common complaints).

And if LSS support the argument that productivity has not risen, then it is also an admission that he has FAILED in his portfolio for the last decade.

Ghost of Capt Smith said...

Titanic 3D is out.

In China, they have just censored the breasts of Kate Winslet in case people reached out their hands.

In SG, I think the govt has just censored the entire Iceberg because they didn't want to see it there.

Remember, Captain Smith who steered the Unsinkable Ship is highly rated and experienced captain. And never in his experience had the ice been so far south that late in the season, and without the aid of the binoculars on a moonless night, the iceberg was invisible to him/crew. And all these despite the fact that the skipper have also received repeated ice warnings that he failed to slow the ship down.

Lesson ? Captain Smith was only doing what he and his captains like him had been doing for years, taking calculated risks to make their companies look good. It was a risk no different in kind from the one that had led to the wreck of the Republic 3 yrs before. To technological arrogance, the edwardian pride that went before the tragic fall, must then be added the element of chance.

Anonymous said...

Your premise rests on the presumption that they care about the well-being of the ordinary Singaporean.

Is that premise valid?

Anonymous said...

//LSS “What is at stake are jobs and structural unemployment. You can push up the wages of low-wage workers by 50 per cent in three years, but you cannot improve his skill, his productivity, his employability by 50 per cent in three years,”//

In 2007, MIW announced 60% pay rise for themselves.
In 2010, MIW announced another 8.8% pay rise for themselves.
In a short span of 4 years, they have their share of way more than 50% pay rise and do you see their productivity & effectiveness come along with it?
If the two casinos were not here, do we seriously see any real growth in SG?
Maybe Lim Swee Say is citing PAP as an example of why productivity growth may not necessarily come with pay increase. I would argue that it's because they didn't have any competition aka spurs behind their hinds.

Anonymous said...

"Your premise rests on the presumption that they care about the well-being of the ordinary Singaporean.

Is that premise valid?"

---

Well if my premise is not valid, then let's hear it from the MIW themselves. Nothing gives the voters more clarity than to see PAP demonstrate that intentions-not-to-care clearly and loudly for ALL to see.

Anonymous said...

If DPM Tharman wants to take another 10 years before their 'inclusive' society means to include those lower waged 400k workers, then you get the drift.

They have no solutions. The exploitation continues.
IT is like singaporeans who KPKB and don't want to give their maids a day off. Because they think they own the cheap labor like some sort of commodities and so is up to them to exploit and decide what 'rest' is..until the gahment forced down the legislature.

Same same, different industry.

The Pariah said...

It took the Pay And Profit (PAP) 20 years to dig the deep hole that most Singaporeans find themselves in. Can we dig ourselves out in 2 years?

Food court mee pok (NOT down-sized or degraded) –
1980 $2; 2010 $4; 2020 $15 when USA/Europe recovers and climate change intensifies.


WAGE SHOCK will translate into IMMEDIATE PRICE SHOCK. Hardest hit will be the (i) un-, (ii) under-, (iii) part- and (iv) non- employed above age 18. Does Prof Lim have stats to project likely impact on these vulnerable population segments?

POSSIBLE ALTERNATIVES PERHAPS?

(1) High time for U-turns on corp and high income tax. Ditto for estate tax. Thanks to laws and policies rolled out by MOF under Lee HL and his successor, Tharman.

(2) Ditto for internationalization of Singapore Dollars – 1G PAP leaders (the likes of Goh Keng Swee, Hon Sui Sen) had these measures in place but these have long since flown the coop from 2G PAP onwards.

(3) Seller’s Stamp Duty (SSD) over 4 years is a joke when new projects typically take 4 years from launch to TOP.

(4) Additional Buyer’s Stamp Duty (ABSD) is even bigger joke when GST is 7% for the poor to buy rice but ABSD is 3% for locals/PRs buying 3rd or 2nd residential property, respectively. ABSD at 10% for foreigners/corporates is cancelled out when buyers have other agendas in parking $$$ here and they know MAS uses only one tool – exchange rate.

QUESTION: How much public $$$ have been expended for the array of funds and grants to improve productivity? Have NOT worked for last few years despite various Economic Strategies Committees’ repeated exhortations (the last was under Finance Minister Tharman too), correct?

(5) Introduce schemes that would PENALIZE industries for (A) NOT achieving productivity gains thru job/process re-design or re-scoping or (B) NOT employing older Singaporeans within a specified time-frame? And then REWARD with grant only AFTER they show results?

As with a precocious child – I reckon the Regulators need the Stick AND the Carrot for Productivity to gain traction. But they have been giving Carrots without any Stick all these years. And when they brought out the Stick, it turned out to be a limp stalk (eg, SSD, ABSD). Lembek lah.

Progressive Corporatism all the way – PAY AND PROFIT (PAP) who have wittingly bolstered (1) Property Sector and (2) Asset Management Sector for almost 2 decades …. even exposing citizens’ CPF retirement savings to greater risks relative to costs and benefits.

WHAT TO DO? 60% Singaporeans voted for Pay And Profit in GE 2011. So we deserve the type of government we have. Can’t complain lor.

Anonymous said...

And you have moron MP like Lui Tuck Yew who even went on to say COE is high because there economy is good and wages are going up etc...ie. fueled by real demand. Except those 400,000 people whose wages aren't going up..i suspect many of them take the bloody crippled transport like MRT & buses to get to work for the peanut $1500 and below pay.

Anonymous said...

Those vulnerable (under $1.5k) will take their chance at casino, loansharking, vice rings etc...

Otherwise, how to survive? And that's exactly what the PAP wants to see..the self-destructive singaporeans terminate themselves...then they have every reasons to say manpower not enough...more foreign trashes must come in. Lives of 44 men have been ruined...not the first, won't be the lasts... they will just keep dragging their feet until 2016, like whipping rabbits out of the hat, they will start all kinds of kind-good gestures to buy the votes. Or maybe not...new PRs is enough to keep 60% or more.

Anonymous said...

It's easy for Lucky Tan to lie to his readers (either that or impress them with his half-knowledge), but at the end of the day all you're doing is exposing what you don't know and/or don't understand.

http://blog.american.com/2012/04/piketty-and-saez-vs-burkhauser-and-cornell-whos-right-on-income-inequality-and-stagnation/

Anonymous said...

Thank you for continuously making a difference.

Anonymous said...

"The economy has been growing very well the past decade and yet wages remain low."

Didn't you mention in your earlier blogs that we experienced 3 economic recessions over the last 10 years?

What do you mean we have grown? You're wrong.

Anonymous said...

PAP is still dreaming that they have 40 years to correct the problems they created by allowing large influx of cheap foreigners to depress Singaporeans wage to low wage level.

In reality, there is only 4 short years left for PAP to execute the correction. In 2016, if the problem of low wage and large influx of cheap foreigners are not corrected, then during all the 9 days of election campaign,

PAP says sorry to Singaporeans for opening the floodgate so wide that any large number of foreigners can enter Singapore to depress Singaporeans wages and
PAP is sorry for not raising the low wage level of Singaporeans to decent living level.

Anonymous said...

Best retort from Dr Lim to LSS - if you don't want temporary freeze, then go for deep freeze...Pick your poison..LMAO

Anonymous said...

Bloody incompetent government we have.

People are fast running out of patience and second chances for these leaders whose policies are short-changing the people of a so-called first world nation.

Anonymous said...

Lucky,

Do not forget to mention a large group of still umemploy graduates or PMET who are in their forties, fifties. Many of them have to make do with low paid jobs while those executive jobs (it may not be their old jobs) which they can do, goes to YOUNG FTrash. Not forget to mention that there are still many companies who discrimmate against persons in forties or older.

Umemploy fifties PMET.

Veritas said...

I would like to contribute to this discussion as I spent years researching about relationship between productivity and wages.

To put it in layman's term, the real productivity of our workers has on average improve at least 20x in most sector for last 20 years. For example, 20 years ago, the job of one hundred person can be replaced today by just secretary.

The ability of today's secretary is simply unbelievable. Let take a look at sending out a document. Before, it took 1 person to type, one person to send documents to post office, probably a significant team size of post office staff to ensure safety delivery.

Today, a clerk can do this job within 5 minutes in from of computers, by a click on the SEND button of email client.

Before, it probably take more than a hundred of people to plan logistic and ensure inventory. Today, a clerk is able to do the 100 man job by SAP.

80 years ago, a building that needs 10000 person to build manually. Today headcount can be reduced by 99% simply with the use of bulldozer, cranes.... etc and all sort of modern technologies.

Now, we are generating so much wealth. By right, today, everyone should only work 3 hours a day, and we could have more than enough. The clerk today is able to replaced least 50x of people 20 years ago. How come she is now much more poorer.

Has her house 50x bigger. Did she work shorter hours? On the contrary, life is only much tougher for her today.

To cut things short, all productivity gain were being stolen by elites through various form of financial engineering too long to explain here.

The only way to claim back our rightful wealth and increase salary is not by being more productive. It is by showing the elites the guillotine.

These elites, these maggots deserve to die 1000 times.

Anonymous said...

I would like to know what are the discerning markers that ICA uses to award whether a particualar PR is a "talent".

I see my pinoy engineer doing what any Singaporean diploma can do.

Anonymous said...

Let's all not be just talk like the PAP but get to work. I have summarised what Prof Lim and said and what Lim Swee Say and the other PAP members have said and now brief all the low-wage workers what can be done and what's being done by the government. I have told many low wage union workers on what their chierf is saying and left it to them to form their own judgement. I told them they will lose their jobs according to their chief and I got this one brilliant answer. If there are not enough jobs, then foriegn will go back home and if they are not sent back and we Singaporeans lose our jobs then it's time our PAP Ministers lose their jobs too. Well said

Anonymous said...

at the back of their mind, they are probably thinking 'you can afford to hire maid precisely because of income inequality' but dare not say it in your face...so what is the value proposition for becoming a minister if the income gap is not wide enough??? :p

capsiplex review said...

So far nobody denies there is a problem just how to best to fix it and whether it warrants "shock therapy".

Anonymous said...

"So far nobody denies there is a problem just how to best to fix it..."
capsiplex review 17/4/12 14:22

The best way to fix it is to have a better alternative to replace PAP.

But Singaporeans, not only cannot produce more babies, but being daft, also cannot produce that alternative.

So the next best way, or the best available way, is to blog lah, like what Lucky Tan and others did.

Anonymous said...

Veritas is right.

Just look at the buses. They are more than double the size of the old bus; which was manned by a driver and a conductor.

For the size, the new bus would have required 4 workers (two drivers and two conductors). The bus fare today is three times the bus fare of the old days. But, the driver (now performing the work of 4 persons) is drawing the salary of 1.5 person.

Anonymous said...

The bus driver is not doing work of 4 people.

The ticketing & fare calculations was previously done by the conductor.
That function is now replaced with EZlink which calculates automatically.

On occasions the bus driver has to issue tickets, but that is infrequent.

The driver drives a bus that is now equipped with automatic gear shifts and the engine more powerful.

The costs to automate is high but the productivity gained is also high.

Yet the pay did not increase much.

Reason is simple.

More money earned went into pockets of management and shareholders.

All the gains in productivity is there.. the money got stuck inside someone's arse.

The Unions know
The management know
The politicians know
The professors know
The economists know

The worker?... just do lor..
dont know anything lor.. my boss tell me I do lor!

Anonymous said...

"The worker?... just do lor..
dont know anything lor.. my boss tell me I do lor!"

He has to, or else...

Anonymous said...

Anon 16/4, 11:21

said: ""These questions serves no purpose except to being divisive - lets move forward..."

It appeals to many a Confusion mindset.. peace & harmony.

And this is how it will end."

Well said.

It is the same confucian mind that says one must submit to blind authourity as these elites are Godly endowed to lead the masses.

Hence, money is pumped into so-called religious institutions here to make sure their followers' minds are conditioned to response to threats and fear. Heaven and Hell are both necessary constructs for the priest and the politician.

Welcome to Singapore.

Din said...

Read the book "When Corporations Rule the World" by David Korten.

MNCs rule the world and have more power over PAP govt as MNCs contribute over 40% of S'pore's GDP. Over the last 40 years, PAP has wrested power from the people and, surely now, the MNCs have become such a dominant force in S'pore's GDP that the MNCs (or businesses) have more power over PAP govt. The workers are all controlled by spineless NTUC which also bends over to serve the MNCs interest first!

We're in such a deep hole that the PAP govt has become like most govt in the world where the only solution they will adopt is to kick the can further down the road (and in the meantime spout nonsense and hand out measly goodies here and there to placate the masses to stay in power).

Snark said...

Republican and Pappies guide:

Step 1 Increase GDP in any way possible. Which includes increasing cheap labour to inflate profits due to decreased labour costs.

Step 2 Hope for trickle-down effects as the rich and elite enjoy benefits. See, when the rich are happy, they can hire more workers and everything will be hunky-dory.

Step 3 - ?

Step 4 – Profit! (and hope to get voted in the next election)

Anonymous said...

Step 5:
For PAP, if there are problems ... blame Singaporeans.
And ask for constructive suggestions and feedback.

Set up Committees of Inquiry.
Invite foreign experts to help investigate.

Anonymous said...

What we really NEED is a truely independent workers' union congress, which is run by the workers, that fight for the workers rights all the way.

Not one that is controlled by a PAP minister, one that let in millions of workers that refused min. wages.

Not One that refused industrial action to press for higher wages when transport GLCs are allowed to max. their profit at the expense of Singaporeans commuters.

Whilst their counterpart transport workers unions in UK, Metroline, a transport co bought by comfort delgro , has the backing of a REAL & INDEPENDENT unions to protect,fight for the transport workers rights.

Wide wage gap, NTUC is partly to blame.

May be we should separate NTUC from the ruling party.

Anonymous said...

Anon 18/4/12 21:55

"May be we should separate NTUC from the ruling party."

Alamak!.. Donch you know NTUC is transgender?...

Look like man
Smell like man
Talk like man
Fart like man

but actually is the same man dressed as ah girl...

LOONY?... You bet!

Anonymous said...

WORKER UNION MEMBERS ARE ALL DAFT AND STUPID, THAT SUMS UP EVERYTHING.

health product reviews said...

What Teo Ser Luck said is disconnected from reality, pro-business and relegates the low wage problem further down the list of priorities for the PAP.

price per head service said...

Pretty effective data, thanks so much for your article.

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Anonymous said...

Pap is the cowboy cattleman and we sinkies r the cattle to be slaughterd and sold.

it belongs to the FAMILEE.