“The second group, which comprises the lower and middle segments,… … They do not like the uncertainty of the free market and do not wish to make many difficult decisions in their lives; for example on how to invest their money or manage their wealth, which they are not equipped to handle.”

This is a generalisation! Why do you assume ALL or MOST people in this “second group” behave in this way?

Hi Mr Kong j c (#1)

I do not assume that everybody fits into one mould. I am sure that there are people in this segment that also prefers the capitalist system. Perhaps I should add the word “most”

Mr Tan, I share your concern for the lower class members of the society. And I’m also agree with you that a mix of capitalism and socialism (like most parts of the world) is more desirable than any one of them alone.

But I have also some opinions which differ from yours:

A) The Singaporean economy is a meticulously planned one.

There are hardly any dominant SMEs. Most large local companies are stated owned (by GIC or Temesek), and so the economy is largely planned by the central authority. Take the biomedical sector for example. It is a state made decision. So are the bid for the F1 race, and the use of IRs to boost tourism.

There is recent article in the ST forum about a family who is sending their child to study medicine overseas due to the low rate of admission rate of the local university. This is another evidence that the university in-take is highly regulated to coordinate with the planned economy.

B) Limitations of central planning

University enrollment – The effectiveness of social planning efforts by the Singaporean government is limited by the volatility of the global economy. University admissions are highly regulated to provide manpower for the planned economy. However, a recent ST article (I don’t have the reference off-hand) reports that majority of degree holders are not working in the area in which they obtained their degree. The economy changes faster than they graduate. This shows a limitation of central career planning — difficult in forecasting the economy and also “dictating” people make a commitment so far ahead.

(I’m do not think a totally free-wheeling capitalistic economy will solve the problem either. But I do not have sufficient information to make a confident and specific recommendation)

C) The title of your article “One country two systems” is inappropriate, in my opinion.

This title has a separatist connotation, even if you do not mean it. Very bad for preserving unity in the anticipated tough economic doldrums ahead. A title like “Need for better social planning” may convey your key idea better.

D) Unethical business practices not a fault of capitalism.

Bad business ethics occurs in China too, in fact plenty of them. They also exists in the USA too. What I think is more important is to have better regulation both by the government and the people. In many countries, citizens organise active groups to help keep watch. This is one area I hope to see becoming more mature in Singapore.

We have to take care of the lower class, and I also totally agree that a mix of free market economy and social welfare is necessary. What I’m equally concerned with are also how to:

i) sustain the economy going so that there is sufficient tax revenue to pay for the welfare
ii) better fine-tune social welfare benefits
iii) better communication between the people and the government

Hi jjb55 (#3)

1. I believe that it is necessary to plan for the economy, just like a company has to plan for its business. This includes the number of places for doctors and other key skills. It is all right for a parent to send a child to study medicine at the parent’s expense. if the parent thinks otherwise.

2. It is wasteful for people to get a university degree and not work in their area of training. The fault lies with the economy, which rewards people to be in financial services (insurance, banking, property agency, multi-level marketing,land banking), which allows them to earn high incomes than to work in the profession of their training. This is the fault of the low regulation and consumer protection in these sectors.

3. I agree that unethical business practices are not confined only to capitalist society. But capitalism believes in the free market and that there is less need for regulation. I believe that the economy need stronger regulation.

I agree with your points on:

i) sustain the economy going so that there is sufficient tax revenue to pay for the welfare
ii) better fine-tune social welfare benefits
iii) better communication between the government and the people

Tan Kin Lian : “People at all levels should be paid fairly for their services.”

I think you have hit the nail on the head and I quote what I wrote in another thread:

“The problem with Asian society is that it does not value “labor” and the end result is low pay for the bottom rung of workers. They make this mistake from Karachi to Kuala Kepong and to Indonesia and India and even in Spore. Japan is an exception.

For example in the junk food industry here they pay only about $3.50 per hour for the service people (serving) hamburgers at the counter. ( correction mine).

In Aust they pay Aust$17.50 an hour !! There is only a slight different between the pays of the educated and the unskilled workers there. Here the difference is as big as a football field.

The flawed rationale here is that we must remain “competitive” but we can never be competitive with the likes of China and India when it comes to salary.

We need to go up the value chain and the people must be willing to go back to school to upgrade their skills so that the corporations can justfiy a higher pay.

At the very least we need to relook a minimum wage system to enable the people to live a life of dignity and yet able to save for their retirement. How can anyone save for his/her retirement if they are paid a 3rd world salary?”

Err, Mr Tan there have been variations of what you propose in UK, Nordic countries and the original six EEC countries. Mixed results

From 1945 — Thatcher, UK tried to balance capitalism with social security. Got balance wrong and moved to a more US system, now swinging back to welfare system.

Nordic countries had too comprehensive welfare system. It didn’t work and they moved towards a more capitalist system but with vv strong welfare programmes. Seems to be working: Nordic countries consistently outrank S’pore is competitiveness surveys. Our MSM say vv little abt this. Denmark has an employment welfare system that other couintries are studying. Mixes gd safety net with training and the need to find a job.

France, Netherlands, Belgium, Germany, Lux, Italy had systems that were very geared towards welfare. They found it didn’t work. They are muddling, trying to find a middle way, but only Germany and Netherlands seem to be succeeding.

The problem is not in the concept but in implementation. There is a tendency for too much welfare. Not surprising as voters prefer carrots rather than sticks.

Hi Kent (#5)

I am in favour of a minimum wage, to protect the weaker members of our society from being exploited by the free market. Even USA has a minimum wage. By paying adequate wages, we will benefit many other aspects of our society:

> social justice
> better quality of life
> better respect for people
> better behaviour by people with dignity

The argument against minimum wage is that it will make our economy uncompetitive. It may affect some businesses, but they are not suitable for Singapore anyway. A minimum wage will increase the cost of services, but we can live with it. It means we pay less for our property and shareholders earn low dividends and top CEOs earn less than their millions.

Hi A Tan (#6)

I agree with your views that it is a matter of implementation. It is also a matter of principles and understanding. The prevailing thinking in Singapore is that the free market will solve all the problems. I do not agree with it.

We need leaders to exercise judgement and manage policy, strategy and implementation, to achieve the desired outcome. I find that countries do well, if they manage ideology with practical common sense.

In my view, Singapore had the right strategy during the 1970s and 1980s but seems to get things wrong since the 1990s (when we move to a free market model).

Why is there no min wage?

As the name implies, its the min wage.

What is the harm of making it a law to protect the lowest paid in singapore?

What is the harm of protecting the people who works their shiit off for the country?

tell me, what is the harm?

mee siam also got the harmful. ha ha.

Singapore is effective at being the best in providing incentives for businesses to flourish but not a good place to live in. Why is this so?

This is because the govt treats the governing of the country akin to the managing of a company, where “foreign talents” are said to replace less efficient locals, disregarding the morale of the workforce as long as the end result is a positive economic growth. However, the govt has failed to realise that the peope aren’t robots. Soon there will be an uprising.

The economic structure of australia is very different from sg. Pace of life is slower due to the culture and thus as Kin Lian pointed out less wastage and more time for family and friends.

I am working in a utility here, where the concept is “if it didn’t fail why change?” so means as long as it still work, we leave it. We got assets built 30-40 years ago which today we are still patching and not changing them.

When i go shopping, the items are generally the same. We do not have so much goods as what sg has, no new models of laptop or pc will be imported until the current models are sold out.

Property investment. The gov highly encourage the pple to invest in properties and they manage it so well to make sure the properties value increase more than interest rates each year. They open the floodgate only to foreigners whom hold degree or above. These foreigners contribute tons of tax and also by investing properties, the money is kept within the country. Over-spending or inflation can be controlled by controlling interest rates. If you sell the property, tax 50% of it. If you sell it after you reach 60, you keep all.

As a degree holder, or someone who earn more, you will be paying 45% to 50% of your pay to nation building.

Lastly, we produce “needs” for the world, sg produce “wants” for the world. Who can demand pple to pay more?

I agree free market is crap. 4 major banks here increase interest rates together. no one can do a thing to them (I don’t snatch from you, you don’t snatch from me, lets squeeze them dry together). I can forsee the same thing for the energy market in sg too, unless sg gov keep one power generator to control market rates, otherwise it will be worse than public transport “hike”.

Mr Tan, many grassroot trade union leaders believe that there should be a minimum wage, as they are aware about the financial conditions of workers at the lower end of the wage scale. But, because the NTUC leaders support the PAP positon on “no minimum wage”, they decide to keep quiet. Quite sad.

Tan Kin Lian : “I am in favour of a minimum wage, to protect the weaker members of our society from being exploited by the free market. Even USA has a minimum wage. By paying adequate wages, we will benefit many other aspects of our society..”

I agree but in the beginning it will be tough for the employers and shareholders
as they “earn low dividends” and “top CEOs earn less than their millions.”

May I quote a piece from http://www.wisegeek.com with regards to a living wage here for all to read :

“A living wage is a wage which is based upon the cost of living in an area, rather than an arbitrary minimum. Under an ideal living wage, someone who works an ordinary 40 hour per week job would be able to afford shelter, food, health care, and other basic necessities of life. The amount of a living wage could potentially vary quite a bit, as standards of living are different in different parts of the world, and the overall cost of living is also subject to extreme fluctuation.

Proponents of the concept of a living wage argue that everyone is entitled to a comfortable standard of living which is comparable to that enjoyed by other people in the same society. Living wages are not designed to eliminate class differences; obviously, some people make much more than others, and this would continue even under a living wage. A living wage would ensure, however, that everyone in a society would have access to the same basic privileges and services.

Many countries around the world have what is known as a minimum wage. In these areas, all workers must be paid at least the minimum wage for their hourly work, although many governments stress that the minimum wage is a base wage, and that ideally people should make more than minimum wage. Unfortunately, the cost of living often increases much more quickly than the minimum wage, causing economic hardship for people on the lower end of the pay spectrum.

Within some larger countries, individual provinces, states, and cities have set their own minimum wages in an attempt to compensate for cost of living increases, and in a few of these areas, the new minimum wage has become a living wage. Living wages are calculated on the basis of what it costs to live a fairly ordinary life in a simple house with basic needs. Ideally, workers should not spend more than 30% of their income on housing, devoting the rest to food, transportation, health care, education, recreation, and other needs.

People who support the living wage argue that in many areas, people who work minimum wage jobs are actually below the poverty level. It is common for people to work multiple jobs to support themselves, especially if they have children, and in some communities people with full time employment have been forced to rely on homeless shelters, food banks, and other social services because they cannot keep up with the cost of living.

Opponents of the living wage argue that it could potentially hurt the economy, by forcing employers to compensate their employees at a higher rate. Some have also suggested that the institution of a living wage could lead to unemployment, as small businesses might be forced to let workers go because they could not afford their wages. While these arguments are valid, some people feel that ensuring the same basic standard of living for all citizens is worth a brief period of hardship in the transition stages.”

Kent,
so what’s your conclusion ? There always a tradeoff for everything. You just need to make one final stand without the BUT. LHL is just example of a weak leader with so much BUT that to provide alternative route to escape.

Hi Kent (#12)

Thank you for the extract on the living wage. It is a useful guide.

The living wage differs from one country to another. This is why each country sets its own minimum wage and adjust it from time to time.

The minimum wage can get out of line against inflation. But, it can be re-adjusted back as soon as possible.

Although there is no perfect solution, it is better to have a minimum wage, rather than to have none. Even USA has a minimum wage which they revise recently, after a lapse of more than 10 years. The US Congress decided that it is necessary and President George Bush could not veto it.

I think that small businesses can afford the minimum wage. It will apply to all busiensses, so the cost of the goods and services will increase to a level to compensate for the higher wages. If the small busienss cannot survive, they can rely on unpaid family workers.

I hope that this step wil lbe taken soon in Singapore. As said by unionist (#11), many grassroot trade union leaders support a minimum wage, but they dare not speak up.

Hi Kin Lian,

Your title “One country, two systems” would be more appropriate for Singapore, comparing the public sector with the private sector. If you could do a bit of research about these two systems, the trends of the public sector (fundamentally civil service) moving more aggressively into Statutory Boards, Public Authorities, Government Corporations, joint ventures, etc and the justification to match the renumerations of public sector employees, particularly Ministers and CEOs with those from the private sector, taking into consideration stakeholders and beneficiaries of both systems. An indepth study of both systems would provide a better insight into the hotly debated arguments and justifications rammed through and implemented by the PAP government to reward themselves handsomely at horrendous taxpayers’ expense.

Daniel : “Kent, so what is your conclusion? You just need to make one final stand without the BUT.”

If you read my previous post (see below) you will know my stand BUT what is your
final stand when push turns to shove?

“I emphatise with the poor. They need all the help we can muster. Spore is a rich country and there is no excuse for our people to be “poor…The problem with Asian society is that it does not value “labor” and the end result is low pay for the bottom rung of workers. They make this mistake from Karachi to Kuala Kepong and to Indonesia and India and even in Spore. Japan is an exception. At the very least we need to relook a minimum wage system to enable the people to live a life of dignity and yet able to save for their retirement. How can anyone save for his/her retirement if they are paid a 3rd world salary?”

Kent, yes, that is a good stand as I did not see the BUT in the quote.
My stand is implement the minimum wage and provide some form of security especially in this country where the ruling government has all the leeway to give half-truth information and denies reality on the ground. The government has been giving too much BUT to evade responsibility and accountability.

“16) Kent on August 29th, 2008 10.48 am I emphatise with the poor. They need all the help we can muster. Spore is a rich country and there is no excuse for our people to be “poor…The problem with Asian society is that it does not value “labor” and the end result is low pay for the bottom rung of workers. They make this mistake from Karachi to Kuala Kepong and to Indonesia and India and even in Spore. Japan is an exception. At the very least we need to relook a minimum wage system to enable the people to live a life of dignity and yet able to save for their retirement. How can anyone save for his/her retirement if they are paid a 3rd world salary?”

On this part, I concur with you – which is not the problem. Some people UP THERE (not a lot of people here) have to be convinced and up till now they are hard nut to crack.

You mentioned a few countries. On this wage & labour thing and about Asian society, Spore lumping together with Karachi to Kuala Kepong and to Indonesia and India. Japan and most of the first world countries are definitely falling outside this unique grouping. So now you have it so clearly. Do not even need a graduate to detect the difference.

Hi Langshan (#15)

I disagree with the approach taken in Singapore to have public sector CEOs and political leaders paid on the same benchmark as the private sector. Most other countries do not adopt this approach.

In other countries, the public sector is paid a reasonable remuneration, but they are not benchmarked to the private sector.

For example, Henry Paulson earned USD 50 million as chairman of Goldman Sachs, but he gave it up to be Secretary of the Treasury for a modest salary of USD 200,000. (I am guessing the numbers – so I may be a few dollars out).

I find the system adopted in Singapore to be not right.

I think this will have to be country specific.
why?
Try puting this onto taiwan, I dont think it will work.
It least for now.
Taiwan’s political environment is so much different but follows more on the American system of freedom of speech and etc.
Beside that applying one system which works on one…may not work on another

Every country have their own culture, way of living, working method. It will have to be tailored made for every single system.

I know that it’s easiler to say than done.

As for singapore, being so small, will be even harder to think of such “perfect” system.

Tan Kin Lian : “I disagree with the approach taken in Singapore to have public sector CEOs and political leaders paid on the same benchmark as the private sector.”

I agree. The rational approach is to benchmark the pollies’ salaries with the salaries of their counterparts in the developed nations. That should be generous enough.

The last time I counted, the combined salaries of Bush, Brown, Sarkozy, Putin, Hu JIntao plus the salaries of the presidents of India, Indonesia and the Phillipines representing about 75% of the population of the world, are less than US$2.5 million.

A) Social Welfare Policy is Different from Economic Policy

1. I agree with “A Tan” (#6) that “the problem is not in the concept but in implementation. There is a tendency for too much welfare. Not surprising as voters prefer carrots rather than sticks.”

2. Moreover, I also believe that social welfare policy is related but not necessarily synonymous with economy policy.

3. Take Canada for example. Its economy is largely based on free market, but the state also provides very much social welfare support. However, we also cannot assume its policies are a panacea. Its economy is unique — it is largely based on international trade, particularly oil, logging and other primary sectors, although 3/4 of their local employment is in the service sector.

4. One should not adopt principles and ideologies wholesale. We need what that works for each nation.

B) “No” to a even more Centrally Planned Economy for Singapore

In this light, I wish to comment why I do *not* think why a even more centrally planned economy is suitable for Singapore:

1. Our economy, which fuels social welfare, is dependent on the rest of the world. An open economy is what makes staying competitive a need, not a want.

2. The economy is already a centrally planned one. For example, quotas are imposed on university enrollments to regulate manpower supply with the aim of keep unemployment low. My comments (#3) show other examples.

3. Even so, it already shows limitations of a centrally planned economy.

4. For example, most people eventually work in a different field from what they have majored in school. This is undesirable. But, it is naive to believe that one can completely forecast the economy 3 to 4 years ahead before students graduate. For example, it remains controversial if the specific specialty within which our biomedical industry is planned to groom is the best choice.
(Dr. Lee Wei Ling from NNI holds a different view from the
government)

5. Also it is impossible to impose career commitments so far ahead, like in an ant colony. For example, some parents eventually send their children, who fail to get admitted to local universities, abroad instead of choosing to enroll in a different local program. For some others who stayed, they are unhappy. There are also people make career changes for various reasons.

C) Distribution Of Public Resources is different from Economic Policy

1. Distribution of public resources (such as transportation, land space, information, CPF, water, and energy) is different from the economy (which provides state revenue and employment).

2. Centrally planned allocation of public resources can be beneficial. The NTUC Income cooperative strategy works to provide insurance at a lower cost than market-based insurance service in Singapore. However, a state-based management of public resources is not always better than a market-driven one.For example, the success of privatisation and nationalisation of the postage and the railway services in nations worldwide varies in different degrees.

3. We can see that the government is constantly attempting to balance market-based and state-based distribution of public resources. So the public resource distribution is not entirely market-based. (However, I do not mean that the
status quo is perfect)

4. The creation (and later merging) of competitors in the transportation and television media in Singapore are examples of experiments to fine tune the distribution of social resources.

To conclude, I wish to reiterate that:

A) Broad economic and social ideologies do not work. Implementations specific to local circumstances are what is important.

B) Social welfare policy can be different from economic policy.

C) Free-market forces are imposed by the global economy. The economy of Singapore, however, is already largely centrally planned, i.e. the government mostly influences of where the revenue comes from and where people are employed.

D) Distribution of public resources and social welfare could be centrally planned. This is where I believe improvements can be done.

Hi jib55 (#22 to 25)

You stated in your conclsuion that “public resources” and “social welfare” should be centrally planned. I agree.

I suppose “social welfare” includes education, health and public safety.

What about “saving for the future needs of the people in their retirement”? I think that it should also be centrally planned, rather than leave it to the individuals to make their own decisions (and be fleeced by the financial institutions).

These items cover a large part of the economic activities.

By “more centrally planned”, I do not imply that there should only be one choice. A few choices could be provided, with clear explanation and guidance to the ordinary people to make their choice.

The ordinary people should not be expected to fend for themselves and make personal decisions that they are not well equipped to do, such as investing in structured financial products. Businesses should be required to observe ethics and treat their customers fairly. They cannot be allowed to “rip off” the customers to make more profit.

An alternative to “more centrally planned” is “stronger regulation”.

For example, in recent years, there are so many scams in the market. Many people are taken for a ride. I think that the authority should take action against the people involved in these scams.

I have high respect for the attorney general of New York City. He takes action against the financial institutions in the recent “auction rate securities” and require them to compensate the investors for their losses, due to some misrepresentation. The ordinary consumers are not left to fend for themselves.

In my view, the free market, deregulated environment has produced bad outcomes for ordinary people. We have to get away from it and move towards “more centrally planned” or “stronger regulation”.

Hi Kent (#5)

Some people argue that we should allow wages to be decided by the market and that a minimum wage will cause our businesses to be uncompetitive against India and China.

Take the example of the wages in the fast food industry quoted by you:

Singapore SGD 3.50 per hour
Australia AUD 17.50 (SGD 20) per hour.

How does the low wage for the fast food industry make Singapore more competitive? Are our fast food cheaper than other countries?

The low wages for workers mean more profit for the shareholders, higher salaries for their top managers, and higher rental for their premises.

This is why the income gaps in Singapore is so wide and the Gini coefficient is among the worst in the world.

“26) Tan Kin Lian on August 31st, 2008 10.43 am
What about “saving for the future needs of the people in their retirement”? I think that it should also be centrally planned, rather than leave it to the individuals to make their own decisions (and be fleeced by the financial institutions).”

Mr. Tan,

I am distrubed by your comment that decision to manage individual retirement should be centrally planned. The option to ‘delegate’ this function should remain open for those who feel comfortable to do it themselves.

The solution is to have more openess / transparency in the discussion of issues on the inner workings / mechanics of how the financial institutions go about doing their stuff, etc. This discusssion must be freer and can be extreme so that no one may get trouble with the laws as regards to possible defamation for the benefits of the investing public who may not be in the know and who may be more wise from this process. You did use the word “fleeced” which is an implicit signal of your understanding on some of the not-so-desirable situations here.

The question of whether it is better to let individuals or the government manage retirement savings is sticky one.

Ideally, we want the government to manage savings for people whom are bad at it, while letting capable individuals to manage theirs. In practice, this is difficult to implement: It is difficult to ascertain who are capable and not, and also it’ll be perceived Nazi to do so.

Another ideal is that one should be responsible for one’s choice. In reality, there are people who still want to blame the government for not putting safety nets. It is ironical that the totalitarian government is never shouldering enough responsibility.

“29) Leonard on August 31st, 2008 1.25 pm
In reality, there are people who still want to blame the government for not putting safety nets.”

I agee. In reality & most likely, there will always be odd balls in any situation. The problem is the proportion of odd balls, are the odd balls so serious as to become the norm (non-odd). Or are penalising the majority just because of a few odd balls ? To put it in another way, are we trying to boost up our own case by publishing / blowing up into a larger-than-reality picture for some convenient purpose just because of some odd balls ?

Only the party privy to this information on odd-balls knows best. Well, to kill the doubts, naturally such hard information in a clear & easy discernible form should be published for people to make an informed conclusion.

“It is difficult to ascertain who are capable and not, and also it’ll be perceived Nazi to do so.”

Is it any better to apply a blanket coverage on everyone (both capable and not) then ? I feel that this is even worst as this captures the full range of the whole spectrum.

29) Leonard on August 31st, 2008 1.25 pm

In reality & most likely, there will always be odd balls in any situation. The problem is the proportion of odd balls, are the odd balls so serious as to become the norm (non-odd). Or are penalising the majority just because of a few odd balls ? To put it in another way, are we trying to boost up our own case by publishing / blowing up into a larger-than-reality picture for some convenient purpose just because of some odd balls ?

Only the party privy to this information on odd-balls knows best. Well, to kill the doubts, naturally such hard information in a clear & easy discernible form should be published for people to make an informed conclusion.

“It is difficult to ascertain who are capable and not, and also it’ll be perceived Nazi to do so.”

Is it any better to apply a blanket coverage on everyone (both capable and not) then ? I feel that this is even worst as this captures the full range of the whole spectrum.

I’m in favour of managing my own retirement savings than leaving it to any centralised authority, be it government or CPF. Legislations and regulations should be aimed at rogue financial institutions or financial advisors to prevent or mitigate scams from happening.

In modern and 1st world SIN, I’m sure there are now more educated, experienced and well-informed citizens about the financial world and hence, are more able to manage their own financial well-being, be it fixed investments/incomes or variable.

I’m sure most mature SIN-ans would not want the government to baby-sit or piggy-back them in financial matters all their life. You make or you break is your own responsibility and dignity. Life is full of risks anytime, anywhere and anyhow.

As it is, the creation of SM and MM are additional levels of control to stifle and retard the hands-on experience, initiatives, creativity and growth of the elected PM and his Div 1 team in running the country.

I suppose SIN has been too long and too far a patriarchial government that is unwilling to cut its umbilical cord. I’ve yet to come across any developed country in the world having two upper rungs of control and wielding.

Don’t you think the SM and MM or whatever other Ms (Minister Finale? (MF))thereafter are long redundant and parasitic moneytheists? How can the PAP boast of a Div 1 top talents government? What an irony and a laughing PIG, remember Animal Farm?

The issue of minimum wage is also an interesting one.

Proponents of imposing minimum wage on social grounds is an easy one. Its impact on the economy is more difficult to answer. In the fast food industry mentioned by Mr. Tan (#27), proponents would say the minimum wage policy doesn’t affect business cost by much, while opponents who say it does (thus increasing food prices or making companies employ fewer people etc.)

Wikipedia offers a useful guide at en.wikipedia.org/wiki/Minimum_wage (Yes, I know that we can’t trust it absolutely, but it does offer useful references from which we can confirm the reliability of the information).

The key points are:

- almost all countries impose minimum wages

- we can’t be absolutely sure if the impact on economy is positive or negative, both theoretically and empirically

- even in the USA where is it implemented, economists are still divided on this benefits:

“A 2000 survey by Dan Fuller and Doris Geide-Stevenson reports that of a sample of 308 American Economic Association economists, 45.6% fully agreed with the statement, “a minimum wage increases unemployment among young and unskilled workers”, 27.9% agreed with provisos, and 26.5% disagreed. The authors of this study also reweighted data from a 1990 sample to show that at that time 62.4% of academic economists agreed with the statement above, while 19.5% agreed with provisos and 17.5% disagreed.[31]
A similar survey in 2006 by Robert Whaples polled PhD members of the American Economic Association. Whaples found that 37.7% of respondants supported an increase in the minimum wage while 46.8% wanted it completely eliminated.[32]”

- this suggest that probably social pressure brought about the policy, even though there is no convincing evidence that it is beneficial (or not)

I’m very curious about what the economic data in Singapore reveals

Tan Kin Lian :”How does the low wage for the fast food industry make Singapore more competitive?”

Absolutely nil. It does not make Spore any more competitive. It only fattens the bottom line of the fast food giants. Their strategy is to maintain about the same prices globally in US dollar term, for example the Big Mac. It’s price is even used as a de-facto foreign exchange calculus around the world ! A lower wage regime benefits them tremendously.

>”The low wages for workers mean more profit for the shareholders, higher salaries for their top managers, and higher rental for their premises.”

Precisely and not to forget, a bigger tax liability which goes into consolidated revenue.

>”This is why the income gaps in Singapore is so wide and the Gini coefficient is among the worst in the world.”

And to add insult to injury Singapore is among the top-ten country with the highest per capita GDP in the world. And more perversely, Singapore has without peer except The Sultanate of Brunei, the Highest Per Capita Foreign Reserves in the world and our bottom-rung workers are paid peanuts ! Where is the equity?

“Shame on you Singapore” should be our workers’ song. Any lyricist around?

I think the financial regulatory bodies in Singapore are already doing the best they can to minimise the presence of unethical practices in the banking and financial markets here. It is just not feasible to micro-manage and assume that people are clueless about what they’re buying. Making the assumption, though, is important to ensure that one comes across as knowledgeable and genuinely concerned about the welfare of one’s fellow men.

Hi cybernetic (#35)

The approach taken by the regulatory authority is to require the financial institution to make certain disclosure. The disclosure are generally unclear to the public. Some financial products disclose, in small print, that “there is a risk that you can lose your capital”. What does that mean?

Many investors are “sold” by marketeers to buy these products. The marketeers earn an attractive commission, the product issuers earn a big profit margin, and the small investors are “fleeced”.

The regulatory authority is NOT doing its best to protect the small investor. They are doing nothing.

I like the approach taken by New York State. The Attorney General hold the financial institutions accountable and will bring them to court. The financial institutions decide to “settle” with the Attorney General, rather than face the court decision.

I hope that our regulatory or legal authority takes a similar approach. This will be considered as “doing its best”.

Hi Just Another Singaporean (#28)

I agree with you that the option be given for those who are knowledgeable to manage their own investment. This will probably be less than 10% of the population, and will include those people who are in the financial services industry.

For the remaining 90%, there should be some “centrally planned” options that are similar to low cost indexed funds (of bonds, equities, or diversified assets). These funds can benefit from economy of scale and diversification.

Given the choice, many people will opt for these fair products, rather than be exposed to exploitation by the financial services industry (with high hidden charges for marketing and profit margin).

I met with some people in teh financial services industry. They argued strongly that people should be allowed to manage their own investments and gave many convincing reasons to support their argument.

It is in their vested interest to have an expanding market. This means more fees and profit for the financial services industry.

We must balance this vested interest with the good of the community. Are the shuffling of meony between the asset classes adding value, or is it a zero sum sum? Actually, it is a negative sum game, after the expenses and fees are taken into consideration.

It is time to review the role of financial services and investments.

I sincerely believe that we can have a capitalist system, that is also human and that can enable us to create a system of safeguards for those who will be disadvantaged by the “winners-take-all, social Darwinism capitalism” model.

I don’t think so much as it as socialism, IMHO, but more like a concept of common sense solutions to common sense problems, and to find the best ideas to solve the common issues. These are stuff that affect everyone, let it be conservatives, liberals or moderates.

Therefore political terms don’t work all that much when we are essentially finding solutions that would help everyone.

That’s why I do support pretty much what US President Clinton did over in America in the 90s, and what previous Presidents, like Franklin Roosevelt has done, and what Sen. Obama is promising to do.

In the end, I believe government has a role to play, alongside businesses and alongside non-profits, and alongside workers’ unions and so forth. But its role cannot be one of a tyrant, nor one of a “don’t care less” attitude. Its role should be of the administrator, creating checks and balances through common sense regulation with the consent of the majority of the voters and people within the system. Its role is also to just administrate, not to micro-manage and control. Its role is also about giving options to people and allowing and trusting them- in their maturity- to do what is best for themselves, the people around them and also for the country.

In the end, an open market is the best way in allocating capital and labour in an efficient matter. But when things go wrong, which happens a few times in such a system, it should not be surprising that government, labour laws and government regulations are necessary correctives.

This will go a long way in rectifying the inequalities in our society and allows us to come together as one nation.

Dear Tan Kin Lian,

I think your idea is just too idealistic and vague.

You mentioned about planning, but in every country there are already lot of plans..

You mentioned about business ethics, but business ethichs are already there…

You mentioned about wastefulness caused by competitions, but human tend to waste things..go hawker centers and check with the cleaners how much people are wasting on their meals…

You might be thinking of creating a perfect society, but as human is not perfect, it is just impossible to build utopia..

You think China with its two systems is better than Singapore or US ? Think again. Look at the corruptions that are created by central planning…look at the wastefulness caused by central planning….

To create a much better society, I’d suggest that we start with RIGHT EDUCATIONS for the youngs, the next generations..

Teach them how to Love others and not just they themselves or their family
Teach them about Compassion
Teach them about Righteneous

If everyone has more Love, Compassion and Righteneous…I can guarantee you 100%, our society will be better, much better, regardless of what system we use.

on one country two system,such as china..is needed..just depend on how the country needed is tat environment in the early year of china..

on my view,i don care about one system or both..
as long as the GOV on any country just need to take good care of their citizen can le.

but singapore,,totally disappointed..

from:
@young generation@

i support an egalitarian and mix economy….strong trade union, fair market rather than free-market. universal healthcare and cheaper, better quality (focusing more on individual’s potential rather than competition) education, unemployment benefits (for a few mths), reasonable minimum wages (v.impt).

In conclusion, favouring more towards the socialist model along with capitalism (akinto scandinavia countries) that is focus more on human esp indvidual’s potential to grow.

Hi Tim (#39)

You said:

In the end, I believe government has a role to play, alongside businesses and alongside non-profits, and alongside workers’ unions and so forth. But its role cannot be one of a tyrant, nor one of a “don’t care less” attitude. Its role should be of the administrator, creating checks and balances through common sense regulation with the consent of the majority of the voters and people within the system. Its role is also to just administrate, not to micro-manage and control. Its role is also about giving options to people and allowing and trusting them- in their maturity- to do what is best for themselves, the people around them and also for the country.

I agree with you.

The Government should be more por-active in adopting common sense regulation, instead of a “leave it to the market” or what you describe as “don’t care less” attitude.

The areas that need pro-active action are:

> Raising the wages of lower income workers, e.g. adopting a minimum wage policy.

> Acting against scams, by prosecuting the people who cheat

> Providing low cost, good value optons for the people (instead of allowing them to be exploited by businesses.

Read about scams in my blog
http://www.tankinlian.blogspot.com

Watch out for these scams:
http://tankinlian.blogspot.com/2008/08/watch-out-for-these-scams-see-item-8.html

Truth of life insurance payout:
http://tankinlian.blogspot.com/2008/09/new-paper-truth-of-life-insurance.html

Hi Vitor (#41)

I agree with your views. I encourage you and other young Singaporeans to be optimistic an ready to speak out in favor of the future that you like to see. We must have an educational effort, to show Singaporeans that there is an alternative to the current system.

Hi zj (#42)

I agree with your views. We need more people to speak out in favor of a more socialist model.

I hope that in the USA, Senator Obama will be the next President. His policies are more inclined towards helping the lower levels of society to improve their lives and to correct the imbalance of the pro-capitalist system of the Bush regime.

The China that created the concept of “one country, two systems” has produced a wonderful show at the opening ceremony of the Beijing Olympics, 2008. It was a fusion of moden technology with the art and culture.

Singapore wanted to teach China twenty years ago about how to run a country and economy. Now is the time for Singapore to learn from China, as they have leapfrogged us in so many areas.

We must be humble.

If your concept of “one country, two systems” is to run Singapore with two different sets policies, I am totally against it.

This will only either divide up the nation or force the rich to leave. In either case, the poor will be worse off.

44) Tan Kin Lian
thank for agree my view.

mostly of the students not like the current party rulling singapore.
FREEDOM??no.
ANY TAT AGAIN THEIR POLICY WILL NOT BE ACCEPT..hahahas..

WHEN my teachers always praise the GOV,i usually Q a lot thing tat the GOV done to their citizen,but usually is INCREASE $$..
then teacher will not praise about the GOV LE.
hahas./ i accept yr view too,SINGAPORe NEED TO LEARN FROM CHINA..

46) dear Michelle,

don u think china is winning singapore??
OFCOS..yes.
actually,china is Quite freedom in some areas,china is already not a communtist country lo,but just can”t VOTE only..

WHy china can”T be democracy country?? becos its fear tat will have many parts of the cities will independent to a YOUNG NATION..tat cause by some country interfer.

china WILL BECOme THE STRONG NATION IN THE WORLD in the future.
as if u read history of china.WAh,u can see tat at the past,how strong is china be,
BUT when they strong,they do not CONTROL OTHER small NATION COMPARE TO the western country…

So in the current fact,,,singpore need to see the face of china,not china needed to see the face of singapore..

IF singapore happen in WAR,DO u THINk tat RICH WILL STAY IN SINGAPORE??
THEY ALL WILL RUN AS FAST AS POSSIBLE.

from:
@young generation@

the future i want to see is>.<

i just want a balance of all party in SINGAPORE praliament.

genuis base on what? on education result??

i don agree.

i just want party tat really takecare citizen,don import too much of foreign labour,reduce all the thing,eg:ERP,GST,HDB flats tat R affortable to us,electricity bill,oil $$
and not solving any problem just INCREASE $$,to becos our SINGAPOREANS burden.

TAT is all i want to see in the future.

thanks for supprting my views, Tan. nice to koe that there are plp here who share similar views on the socialist model.

“46) Michelle on September 7th, 2008 1.53 pm
This will only either divide up the nation or force the rich to leave. In either case, the poor will be worse off.”

Why not indulge in some thought experiment. If the top rich 50% literally leave Singapore leaving only the bottom 50% to fend for themselves. Do you sincerely think that the remaining 50% are not able to survive on their own.

I think there are many ways to help the poor..no need to do it by setting minimum wages.

Setting minium wages might cause new problems, for example, if more businesses cannot affort the labour costs, they will retrench workers…so at the end instead of helping the poors, we are hurting them…

i think we should have more policies that encourage the rich to help the poor…for example, by imposing tough checks on charity organizations and punishing heavily those who cheat through these charity organizations…

“1 country 2 system” rooted before the day Dr Sun Yat-Sen(孙中山 1866-1925) passed away. Both communist and republican’s mission are the same – one China only. Deng was the heir. His strategy was “1:2 system” for 100 years from 1997. It was a chapter of shameful and sad Chinese history! I never want to see such history repeat again.

I received this e-mail through the internet. It is relevant to this discussion about the system in China.

We Can Help China Embrace the Future By TONY BLAIR August 26, 2008; Page A21

The Beijing Olympic Games were a powerful spectacle, stunning in sight and sound. But the moment that made the biggest impression on me came during an informal visit just before the Games to one of the new Chinese Internet companies, and in conversation with some of the younger Chinese entrepreneurs.

These people, men and women, were smart, sharp, forthright, unafraid to express their views about China and its future. Above all, there was a confidence, an optimism, a lack of the cynical, and a presence of the spirit of get up and go, that reminded me greatly of the U.S. at its best and any country on its way forward.

These people weren’t living in fear, but looking forward in hope. And for all the millions still in poverty in China, for all the sweep of issues — political, social and economic — still to be addressed, that was the spirit of China during this festival of sport, and that is the spirit that will define its future.

During my 10 years as British leader, I could see the accelerating pace of China’s continued emergence as a major power. I gave speeches about China, I understood it analytically. But I did not feel it emotionally and therefore did not fully understand it politically.

Since leaving office I have visited four times and will shortly return again. People ask what is the legacy of these Olympics for China? It is that they mark a new epoch — an opening up of China that can never be reversed. It also means that ignorance and fear of China will steadily decline as the reality of modern China becomes more apparent.

Ex-British PM Tony Blair visit China many times. I think he appreciates the accomodation of new China communist leadership who do not hate the invasion of China by 20000 troop from 8 allied countries (British inclusive) in 1990.

Accomodation (有容乃大) and “1:2 System” (一多相容) were ancient Chinese philosohy thought. Confucius (BC 551-479) said:” 君子和而不同A leader would accept differences and maintain harmony.” The “1:2″ system maintains harmony like HK since 1997. This is proven today.

What if a leader would NOT accept differences, an ancient China scholar 西周史伯 had warned in BC771: “同则不续Oneness never survive ” Soviet Union collapsed !

Mr TKL suggestion of ‘1:2″ system would best relate it to Chinese civilization.

The global financial system is falling apart. The capitalis system is exploitative and encourage greed. Even US Government realise their flaws in the system. It is time for other countries, including Singapore, to open their eyes and see the flaws – and correct them.

Maybe what Tan Kin Lian is trying to say is to balance capitalism with some controls..so it’s a balancing art rather than 2 systems.

Or 2 systems means :
1. capitalism in CBD area
2. and socialism outside CBD ???

:D

no.maybe wat mr tan is trying to say is to balance the 4 corners of the world.