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“But just because something has worked well in the past does not necessarily mean that it will continue to work well in the future.”

I concur with you.

Many highly successful and large corporations collapsed in time. The past is no guarantee of the future where the Future is Unknown, Uncertain like the stock market.

Oooops! it happened. What to do? Oooops……

No one knows the economy.
Or
The economy is best explained after the fact based on hindsight.
Oooops! it happened.

If Singapore Opposition can create Gobal Enterprises equal to the GLCs than I think there is Hope for Singapore!

Just like the Christian Business Network who got Hidden Agenda of Pro Business or Pro PAP not very sure!

Lucky lot of Christian Business Network is in Finanical Industries and now they suffer no better than their brothers in Manufacturing Industries!

“Does the equation “growth equals development” always hold? My answer is an unequivocal No.”

I would say growth comes at a cost of stretching income inequality, but I would also say that growth leads to better life even for people at the lowest income group.

“I would say growth comes at a cost of stretching income inequality, but I would also say that growth leads to better life even for people at the lowest income group.”

Yes, Singapore’s GDP in the past few years has shown growth. However, alot of pple in the lowest income group have not seen any wage increase, and some even suffered lower wages.

Do you think that growth comes at the expense of these people, or because the these people do not get the rewards of growth?

Does it make a difference? They are all Singaporeans

So in your opinion, what would be a fair distribution of work and rewards?

minimum wage policy

These people contribute to GDP growth in more then one way. And don’t forget, these same people are the one who have not seen much of a wages increment, but in fact are facing reduction of wages so as to ‘retain” or appeal to firms to operate in Singapore which will help to generate the growth.

“but I would also say that growth leads to better life even for people at the lowest income group.” that is very generally speaking and theoretical. However, even economics textbook are stating that people will still get left behind and won’t benefit from growth.

Just like Small Time Businessman has said in post 5, quite a number of people has been faced with stagnating wages, the coupled that with inflation and rising cost of livings that is attributed to growth, do you, Mr KKK, think that these same people will be well off when their wages are nearly the same, but real wealth has fallen, and can purchased lesser stuff due to increasing cost? mmm, so is that considered as better off?

Anyway, this phrase from the article “But just because something has worked well in the past does not necessarily mean that it will continue to work well in the future” has been something that is painstakingly obvious and I have been posting comment about it, referring it to Nadler and Shaw’s Trap of Success. It is said that the paradoxes of success is that success can set the stage for failure.

but are consumers including low-income families willing to bear the costs?

huh…low income families will have more income also what. Definitely better than paying millions to ministars who are good at hindsight forecasting

huh… have you think about the many low-income families who are earning just above the minimum wage?

Yes, minimum wage definitely better for them too

huh… suppose you set the minimum wage at $X. There will be low-income people earning above $X. How is having minimum wage policy better for them?

how is it not better?

if they are already earning about $X, they don’t have a pay rise, but they have to incur higher cost of living since businesses will pass the additional cost due to minimum wage to consumers

ERP works since 1979 what and COE works even better…if it ain’t broke why fix it? That is what gahment will say

the possible benefits of minimal wages:
1) less (social) financial assistant schemes needed
2) higher domestic spending (higher disposeable income)
3) earlier marriages (more financial stability)
4) reduced likelihood of job hopping (reduces need to constantly retrain new staff)?
5) higher job satisfaction?
6) higher birthrates?
7) lower divorce rate (no money, no honey)?

any company that hires people cannot ignore the fact that their HR policy does not affect the social fabric of the society. the current situation where companies’ policy are pro-business who less emphasis on social consideration, has resulted what S’pore by & large is going through now.

there is even a campaign to get people to smile- how sad is that! lol…

Singapore is like a blue-shifted Sun, though we strive to shine brighter than others, ultimately we die early.

Singapore is too crowded. This is the heavy price we paid for the growth and with most of the growth benefits going to the foreigners, including the PRs.
Other citizens in other cities like New York, London, Tokyo, etc, the citizens have the option of moving into the surburbs when they grow old, retired or when they stopped worked. In Singapore, where to move to????

During the hey days, Singapore cannot afford failures or windup……….now we have to face the consequences as the good days are over……………

“14) kkk on May 11th, 2009 3.25 pm huh… suppose you set the minimum wage at $X. There will be low-income people earning above $X. How is having minimum wage policy better for them?”

Do you think a $8/- per hour is better or $10/- is better. do you think you can have a better life if you have S$200,000/- per month, S$2,500/- per month or only S$300/- per month.

now stop your rubbish. our saints on top do not want competition (fix the oppo??) and still peg their salary to the highest (not minimum). but for lower income, they do not mind opening floodgate for other low-cost FT to come in to compete (yet no minimum wage) and yet they have to pay for so many essential services (glc services ???? like transport, utilities, hdb, medical, etc. ) which must operate under the cost-recovery model – these costs i believe also factor in all the pay for all civil servants, top garment elites, etc.

if it is subsidies that they are talking about, i wonder if it is real cost subsidy or economic subsidy they are talking about. apparently, those costs of glc services must be recovered whereas the basic income (of our own low-income) is not protected (no min wage) at all and they yet they have to service their own basic costs which is operating under the cost-recovery model of our dear glc.

With globalization spreading in full force, Singapore as a tiny red dot is caught within this vicious cycle of development and growth. There are no perfect solutions so to speaks regardless of which ruling party is at the helms. If Singapore choose to maintain a high-growth model, common citizenry who are less fortunate will be constantly be playing the catch up game (i.e. a continual strings of skills upgrading and training to counter the ever increasing demand of professionally correct workforce to spur the growth of investing companies whether local or foreign alike). We (Singaporeans by and large) cannot compete any better with upcoming developing or industrialize countries surrounding us as the labor cost of these countries are more attractive to companies who relies on these group of workforce to sustain a reasonable return of their investments. The gap of the haves and have not will expand further and further. On the other hand, if Singapore chose to revise its high-growth model, to what extend should it be revised that it ensures our less fortunate comrades are not left behind? Since there are limited land space, agriculture and low value manufacturing is certainly out of questions. Retailing is all but limited to the small population and that coupled with expansive imports will drive cost even higher than it already is.
There are a few basic questions on our fundamental living needs that one needs to have a long term resolution to ensure the survivorship of this tiny nation citizenry for the next 50 years if not a century to come. Not that we are better off now compared to decades ago (for the top 10~20 percentile, the views are different).

1) Affordability of housing ~ thus far in comparison to the said country such as Hong Kong, I would gladly say that Singapore’s public housing program is an iconic success. I know and expect many will disagree and make the argument that HDB is no longer that affordable comparing to 10~20 years ago. The comparison country (Hong Kong) property market pricing is ever ballooning to a point where it is hardly affordable and public housing queue seemed almost never able to see the light at the end of the tunnel and with much lesser public housing estates being build (for the sole reason of propping the private property pricing structure). The facts are there for you to contest. Other neighboring countries, their problem is not on the scarcity of land space and natural resources. As crude as reality would be, the cost of all related materials used for the building of public housing estates had quadrupled if not in 10 folds (mainly through multi-layer pricing of contractors??? May be, may be not). The only possible cost that can be controlled within is labor and it is mainly done via importing less expansive foreign labors from neighboring states (the Singapore work force alone simply isn’t enough to cope with the demand, bluntly put, these jobs may not be well received by locals~ my assumptions).

So how then can this part of the basic living necessities be tackle? Please remember, all of the material used (whether pre-fabricated or not) are mainly imported. One of the more prudent ways is to only allow natives to own HDB with a higher subsidy and longer installment period and barred none naturalize citizen from ownership of this public estates (but the consequences would be seen as being advocating protectionism which the current ruling party do not advocate). The other implications are more obvious, foreign workers who turn PRs that this country relies on to continue to contribute towards the high-growth model will be challenge. Without which, the ruling party think the high-growth model cannot be sustained with only limited local professional workforce. It is a sort of catch 22 situation unless the URA council foregoes the high tariff charges on property tax (which I certainly doubt that is ever going to happen as it will deplete its intake of revenue and can never justify their “world-class” remuneration packages).

2) Affordable consumer products ~ by far this is still considered affordable if one is to spend within their means (but again there are many who may not even make ends meet). The progressive affluent Singaporeans become choosy and goes for more branded products but on the other hand complain that the price has rocketed. Fundamentally, cost of such consumable products will escalate as these are mainly foreign imports (Singapore had little or no local produce and if any it is only minimal, not sufficient to sustain the demand for the 4.8 million and growing population). Unless land development are re-zone to promote agriculture for self sustaining purposes, the issue of high consumable product prices is here to stay for a long time and may even out-stripe whatever wages increment one might enjoy (not discounting that ever growing of the GST). The only ammunition that common citizenry had is to be more prudent in their spending. Of course it will certainly help if all costs of living can be lower (by artificial means). Can Singapore return to non-GST era? Can this government do away non-essential taxes (at least for the natives)?

3) Sustainable employment growth ~ this area requires much contribution from home grown companies if we are to ensure that we are not price out by neighboring competition. A scenario that has been played out in our competitive nemesis Hong Kong (within one decade, the hay days of manufacturing and certain retailing booming sectors have all but move up North to neighboring China). Of course Singapore too had experience this episode of foreign investments (in particular low-end goods manufacturing companies) had moved either up North for a more cost effective return of investments or folded their business entirely. Home grown companies are less risk takers and not entrepreneur enough to retain insatiable local talents.

These are but a few very teething issues that any ruling party will have to address (internally). Further uncontrolled external elements had not been factored in (including the ever improvement of lesser developed and industrialized neighbors within the next decade or two, we will definitely see a total different neighbors). Having said, will Singapore perish if this high-growth model collapses? I should think not, just that we may become poorer and the rebuilding cycle will find its way perhaps through a different leadership. Who knows, if this day ever comes, we might after-all be part of a larger nation for the sake of survivor. A problem our younger generations will have to face. Is it for real? It could happen. Don’t take it to heart. Just an old man view.

Sincerely

Observer (SG-HK)

Rajiv, thank you for the honest and down to earth article, look forward to the future parts. I agree that truly gone are the days of high growth. My take is this, something has got to give. And what has got to give is the financial circumstances of the average families. As commented we are just too small and the consequences are just to telling and impact will be immediate and faster. Gone are the days too of sky high investments and returns of the GIC as shown by the loss they made late last year. If they have not learnt their lessons I think we as the average Singaporean is going to suffer more if they keep up the “indirect taxes” on us to fill their coffers. We have been saying especially the last few years to bring down or at least manage a realistic and equitable cost of living for all of us but much to deaf ears. There seems to be a gap now, those who have , I dare say the civil servants and its subsidaries, the high earners but not so stable and the rest of us. Although there seems to be still some movement to the HDB market, I think it will grind to a halt as those who have sold them simply cannot or will struggle to get a second flat , hence the long queues for rental flats if the government continue to say HDB flats are still affortable My bet too is this, the government simply have no more answers to growth for this country. I really fear for my kids. Met a neigbour’s father and he said his son simply cannot do business in Singapore and has businesses in Malaysia. I made a bet, the Ponggol 21 proposal will not happen in the long run after PM National Day speech. At the cost ot today’s prices, it’s crazy to go on. I think our leaders are living in a glass tower and out of touch with its citizens for a long time now. Have we benefitted at all from all the high growth years, I dare say not one bit. Infact I’m paying more for everything else with the same or lowe pay!.When the world turns around again it might be a different economic reality for Singapore and my bet is we might be left behind because of our high cost of doing business and living. A customer just emailed me to say that he’s looking across for his supplies and giving us a miss. Maybe you would want to comment on this too. Keep up your good work.

The country success must also be measured by degree of growth in worker’s wages over the years. If workers are drawing stagnated salaries or even decreasing it relative to the roketing cost of living, than I do not think this country has succeeded. No amount of LKY memoire should make us proud of Singapore or even boast about our workers predicament. There is no reason for our public civil servants to draw more than private sector workers since these group are usually the hardworking and risky lot to be retrenched in bad times.

Even our tourism industry model is in trouble. had a business dinner with a Japanese tour operator last friday and he said that Singapore is no longer attractive to the Japanese tourist. Reasons are:

1. Too expensive – They can buy cheaper things in HK, and even in some parts of Japan. hotels are waaay to rediculously expensive
2. No culture – Thailand is the no 1 tourist destination because of Tourism Authority of Thailand’s very aggressive marketing of Thai culture in Japan. They feature thailand’s culture almost weekly in some media.Thailand is also the place for repeated visits for spas and resorts.
3. Too sterile
4. STB is not doing a good job in Japan
5. Singapore has become a stopover destination – 1-2 days, no repeat visits.

would the IR save us? Dont think so because it is nothing unique or special; just another one of the many casinos in the world. It would be a 1-visit -is-enough kind of attraction.

With regard to the minimum wage, there is significant empirical evidence that a minimum wage has negative effects on the wealth of unskilled and low-skilled workers. A minimum wage can have unfavourable results on wealth distribution.

For example, workers who are below the minimum wage leve will have fewer jobs for their skill level as the minimum wage will result in firms cutting the number of low wage jobs to stay profitable. Additionally, people just above the minimum wage will be disincentivised to keep their higher paying jobs since they can easily attain the minimum wage by doing more menial work.

So it is very difficult to develop a minimum wage that improves income distribution and does not reduce the unemployment levels of the low-skilled groups.

28) BD

“So it is very difficult to develop a minimum wage that improves income distribution and does not reduce the unemployment levels of the low-skilled groups.”

I am afraid you are missing one part regarding the avocation for minimum wages. if you are an employer, employing both singaporeans and foreign workers which cost the same, who will you rather employ? the call for min. wages was done partly as quite a number of Singaporeans are losing their jobs to FW that are paid lower. as for your example in second paragraph, Mr BD, somebody has already did a case study of Australia min. wage vis-a-vis Singapore and answers has been given.

and i find it really really funny. “people just above the minimum wage will be disincentivised to keep their higher paying jobs since they can easily attain the minimum wage by doing more menial work.” Mr BD, if you are working in a high paying job, will you want to give up that higher pay to do menial work? that’s where it doesn’t make sense. You will not give a higher-paying job for a lower paying menial job that meets min. wage…Geez…where did that idea of yours comes from btw?

There is always two side to a coin, pros and cons. just like how the formula that brought success to Singapore also brings about Singapore’s vulnerability during this crisis…just as mention in this article

“there is significant empirical evidence that a minimum wage has negative effects on the wealth of unskilled and low-skilled workers.”

again, what are the controlled variables in your empirical evidence. take doctors (top talent) or electrician (mid talent) or rubbish cleaners for example ? if you let market control the number, their salaries are likely to move up and down in accordance to supply and demand.

the problem in life is that the decisions makers (the influential ones on top including business owners / politicians) happen to benefit a lot from the hard work of low-wage workers who are not protected and are too conditioned to resign themselves to be submissive and made to feel that their hard-labour-work is not worth as much while they (the former) like to put themselves into the a much more comfortable so-called brain-power-high-value-work. the sad thing in our country is that those low-wage workers simply do not have the platform to exert themselves as all the ‘right force’ is in place to ensure that it is so.

the recent financial crisis has indeed given us a lesson on roughly which group of people were wrongly looked upon highly in the past and had brought a mess to the whole world at the great expense of many decent working people, most badly hit were those low-wage hard workers.

“So it is very difficult to develop a minimum wage that improves income distribution and does not reduce the unemployment levels of the low-skilled groups.”

it won’t work if you have plenty of workers (thanks to very liberal low-wage FT policy). if the numbers are controlled, employers are indirectly ‘forced’ to pay labour more while capitalizing on the other resources (legal & physical infrastructure, political stability, knowledge workers, financing etc) still giving a net gain while the benefits are more ‘evenly’ distributed among workers and employers.

of course, employers can relocate to another country but then having business in some other countries also have their own set of problems (e.g legal, labour and local cultural attitude towards foreign investments, etc) and equilibrium (e.g overall costs will rise) will be reached if a lot of businesses are concentrated in the same place and competing for the same scare resources. not true ???, well just ask our garmental foreign ventures and you would understand.

Perhaps what we need is some form of income supplement (and not mere one-off tokenism which the government currently practice) for citizens who earn below a certain threshold. Minimum wage would be largely unnecessary; the Government can simply tap into the vast reserves to alleviate the income inequality problem. Furthermore, such income redistribution through reserves is arguably more transparent than whatever which occurs in the all-consuming black holes of Temasek Holdings and GIC.

CPF contribution should only occur ABOVE a certain income level, and the contribution can be used to maintain the (currently rather ineffective) CPF social security system. I feel that this is a more equitable solution than asking the lower income to bear the burden of supporting the CPF system by paying a disporportionate size of their income.

But this means a rethinking of the governing philosophy in Singapore, which I feel is firmly entrenched in the ruling party (which is dominated by upper class elites who thinks like John Galt in Ayn Rand’s Atlas, if you get the reference/or play Bioshock).

Before diving into this topic, we much consider if Spore’s growth is REAL growth. Did our increase in GDP ride on other’s success? Yes, yes, yes! So this is NOT real growth to me. Real growth is independent of foreign investments and foreign trading and real growth has no chance if the nation is gripped by state controlled ‘businesses’. When we finally have real growth, will the ordinary citizens ‘taste’ it if the fruits are only for the elites to enjoy?

well said angelina.
what growth? salary grow by 2 times while cost of HDB grow by 10 times?

the only people who have benefited are those at the top and those greedy ministers who use this statistic to keep on demanding for more & more pay.

but the good news is that many finally see their true colors after the latest round of pay increase demand.

In response to #29:

I appreciate your criticism however, my point still stands. I give the simple example of a minimum wage of $10 an hour. Consider two jobs, one which paid $10.50/hr and one which paid $4/hr under the market equilibrium. We use the simplifying assumption that discrepency is due to the less paid job needing less effort and less qualifications. The individual now can earn $10.50/hr for the high effort/qualification job and $10/hr for the lower effort/qualification job. There is a strong disincentive to put in the extra work and attain he extra qualifications. You obviously misread my point because it only applied to people just above the minimum wage leve.

This leads to another significant criticism of minimum wage which is that it reduces incentive to gain higher educational standards and proffesional qualifications.

In response to #31, I apologise for the strength of my statement. I would reword it as there is contradictory empirical evidence, with empirical evidence of both positive and negative effect on low-skilled wages, although the latter tends to dominate the former.

A commonly cited article is
http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=11659

**I am NOT against a minimum wage. In fact I believe if properly instituted it will have positive effects. However, I think it is important for people to have complete information with respect to the subject. Minimum wage can have negative effects even for the low-income group.

**If there is a minimum wage in Singapore, it must NOT be applicable to young people, i.e. people under 18 or preferably not applicable to people under 21. The minimum wage cannot be fixed across the economy and must have multiple levels for different sectors and job classes. The efficient level is VERY hard to determine but it is essential that it is well estimated for minimum wage to be effective.

Do not mindlessly support any economic policy. Every economic policy has its dangers and its benefits. This is the very reason why economic policy making is so difficult.

In 1979, I was drawing a basic salary of $395/- married and only beadwinner living in my 4Room HDB was then $23,000/- cost of living was manageable and owning a mini car was fashionable and affordable with no ERP or COE to worry…….30 yrs. later I don’t wish to be in this situation……….it will be a struggle and beyond attaining the quality of life that we are in the 10 most expensive city in the World.
These days, we hear about migration amongst the young as I truely share they concerns etc. (cannot make ends meet)

Mr BD, then you are making an assumption that people will not strive to improve, that they do not want advancement in life? And do you believe that jobs out there that that are lower in wage requries less effort?? Less qualification, i believe so…however for less effort, I don’t think so. An assumption, again.

Yes, a person may develop the mentality that since i can do this job with lesser effort in studies etc, and get a similar payi don’t have to put in effort for studies or to work hard. However, you are totally wrong about: “There is a strong disincentive to put in the extra work and attain the extra qualifications.”

Mr BD, like what you have said, you are assuming, but you have simply neglected the facts that human are wanting beings. well, at least most of them anyway, but they will want more “advancement” and the difference in pay is justifiable for them to work harder to get a better paid job even though it may be harder. What you are trying to do here is looking at things from a tunnel-vision. true, there may be SOME people like what you have describe, but there will be others who strive for more. i always like this saying BD, One man’s meat is another man’s poison.

And I think, Mr BD, you are misreading my point too. What I am trying to imply is your over-generalization and inaccurate stereotyping of these people because of this phrase “it only applied to people just above the minimum wage level” we can’t stereotype and just pretend that everybody is the same and will behave similarly, the way you do.

“This leads to another significant criticism of minimum wage which is that it reduces incentive to gain higher educational standards and professional qualifications.” Like what i have said BD, you have neglected the fact that Humans are wanting beens. In fact, wages is at the bottom of Alderfer’s hierarchy of needs. After the existance needs is satisfied, people will strive to satisfy other needs too. you are just assuming again that people are satisfied by monetary needs and won’t seek self-improvement in order to satisfy growth needs.

However, there is one part I am in agreement, “Do not mindlessly support any economic policy. Every economic policy has its dangers and its benefits. This is the very reason why economic policy making is so difficult.” As i have said before, all we want is the best for Singapore and the people, to reach a new equilibrium that will ensure singapore’s survival, no matter what’s our point of view. We need to keep our minds open to all idea and constructive conflict.

reply to Que

//// the Government can simply tap into the vast reserves to alleviate the income inequality problem.////

i think the reserves should not be used for such a purpose. S’pore will be poorer for it since there will always be a group that will need that support.

just my opinion.

Growth is commonly measured in terms of GDP or GNP. And all of the following contribute to these numbers – transport engineering, oil, high value manufacturing, finance and pharmaceuticals.

Transport engineering is the term commonly used to describe rig construction. And the workers on at these sites are mostly not local. Oil, well, they can run the plants and refineries round the clock with a small force and deliver enormous quantities of oil. High value manufacturing and pharma can also do with few people and run machines round the clock. Finance – a few folks can manage huge funds out of Singapore, cut some large deals out of Singapore and probably contribute to the statistics.

All these can create huge national product and employ few locals who are mostly well qualified people. Creating huge national product is not a bad thing. We need to have the lesser qualified folks on the growth bandwagon. While the govt is constantly talking about upgrading and reskilling/retooling, not all will make the jump for various reasons.

reply to BD

////Consider two jobs, one which paid $10.50/hr and one which paid $4/hr under the market equilibrium. We use the simplifying assumption that discrepency is due to the less paid job needing less effort and less qualifications. The individual now can earn $10.50/hr for the high effort/qualification job and $10/hr for the lower effort/qualification job. There is a strong disincentive to put in the extra work and attain he extra qualifications.////

eh, these are fictional numbers right? can the pay differences could be $6.50 vs $10.50? with little pay increase throughtout the years there is also little incentive to attain extra qualification also wad.

////If there is a minimum wage in Singapore, it must NOT be applicable to young people, i.e. people under 18 or preferably not applicable to people under 21.////

isn’t this very ageist? besides even part time job seekers are already segmented into their educational level like, post secondary, poly, university students. going by your reasoning, most senior staff should be paid more taking their age as a factor? would it not deter younger 1s to perform, since they may not be paid more even if they were to outperform older staff?

////The minimum wage cannot be fixed across the economy and must have multiple levels for different sectors and job classes. The efficient level is VERY hard to determine but it is essential that it is well estimated for minimum wage to be effective.////

this i agree. dun worry about hard to determine, i think relevant industry people can be tapped on for advised.

there may be an issue of why pay scales differ industry to industry. would the lesser paid industries not cry foul? that in turn may lower the level of professionalism, making it harder to fill vacancies. hmmm…

will unemployment rise rapidly necessiating great social and political change? It may be necesssary to fight a war to keep the economy back on track, minimising market failure and have better quality health care for all. After the war, a pension fund may then be created.

To #37 mice is nice:

Well, any form of social welfare system will definitely incur greater government expenditure, and most probably at a cost to the country’s growth. But I agree with the premise of this article, that growth is by no means the holy grail in fiscal policy. I’m willing to accept a ‘poorer’ Singapore, if that means a more socially equitable and a more livable place for its citizens.

A annual 7% growth rate where about (-1 to -2%) goes to lower-middle income citizens (going by the decreasing real wage rate for low income groups) is not the economic growth most Singaporeans would want. In fact that is effectively welfare to the rich and elite (income redistribution to foreign MNCs and other capital owners). I rather a more modest growth rate (1-3%) akin to developed Western countries, together with some form of income redistribution through means of a welfare system.

Whether growth or no growth, recession or no recession, the ordinary man in the street does not bother or having any impact on them as the ones who are the money drivers and high flyers are mostly affected so what can a worker bee say to the Queen bee?

re to Que,

i know any form of welfare will incur cost to govt expenditure, that is why a minimal wage policy is more attractive & logical. this is so there will not be any resentment towards the lower income individuals.

if a job cannot provide a decent basic wages to cover living expenses with a portion going into savings for a sudden major illness, retirement & family planning, what good of that job?

as you have said “some form of income redistribution through means of a welfare system.”, can i ask if its a long term thing?

“We use the simplifying assumption that discrepency is due to the less paid job needing less effort and less qualifications. The individual now can earn $10.50/hr for the high effort/qualification job and $10/hr for the lower effort/qualification job. There is a strong disincentive to put in the extra work and attain he extra qualifications.”

If that is really the case, market equilibrium will kick in, and the S$10.50/hr job will pay significantly higer than $10/hr.

Hi, just wish to share my view. I respect everyone’s opinion and you may rightfully disagree with my opinions expressed…

Growth, possible?
Yes. Unlimited growth possible…? No. Strictly speaking, growth of Singapore Inc is limited to Planet Earth.

If you think about this cynically, our GLCs such as Big T, Govt Inc, have been conducting organic growth quietly (oops. State Secrets!) over the last few years (okay, not that quietly, some spectacular “paper losses” in “mistimed” investments)

Growth vs Income Inequality : Fair or unfair?
If I think about my parent’s hardship while growing up…being poor then was very much worse than being poor now.

The proportion of people below the poverty line was higher.

While it is tough for anyone to be poor (I am poor), at least, even in the worst case, there are government grants and subsidies more readily available for those who are needy, especially in the education and food requirements for each household.

Growth at “ALL” costs?
“ALL” is such a terribly generalized and absolute term. What if, hypothetically, ‘Growth’ entails infanticide? or genocide? or a “Cultural Revolution” styled “Great Leap Forward” ??

Maybe a better term would be growth a ‘reasonable’ costs. And this would be put to the test at GE. (Too bad my GRC always walk over)

As far as I am concern, in Singapore, what is worrying is the wages of the common people who are 40 and above.

Young foreigners (skilled worker) who are invited in to fight for a living in Singapore and does not have a family living in Singapore earning a “higher income” (suppress local’s wage) to feed their family in their country which has a lower cost of living is getting more and more. From what I see, it is creating inflation!!
This is super unfair especially to the people who reach 40 and has a family in Singapore.

Given this, tell me who is in the right mind to have more babies. Given that they might get a salary cut or go jobless just because they have reached 40, who is willing to risk the chance for being blamed to have more babies? Everyone knows growth always brings along his friend call inflation. Does this mean double/tripple whammy??

This issue is being brought up long ago but left unanswered.

With so many foreigners in Singapore, 45% of them, Singaporeans’ voice is getting smaller and smaller. Foreigners know Singapore needs them.
What does that impose on Singaporeans? Their living behaviors right?? Cycling on the pedestrian walkway like nobody’s business.

So, the million dollar question: Who will be retrenching first? Does the government has the POWER to take the job of the foreigners (from ALL levels, industries) and give it to Singaporeans that has no job at this time?

Yes, this is the time for the government to answer the COST the government imposes on every Singaporeans.

I am looking forward to your second piece.

The answer to all this problem is very simple in fact. To solve this problem, just not peg the minister’s and expensive gahmen’s to GDP, and that all gahmen must not be involved in directorship and business and just focus on their main job as civil servant. It will be these gahmen who in turn will reject the “growth at all cost” if they did not benefit from it and, in turn, suffer from that pursue. You see, all this thing come about growth at all cost is because the gahmen benefit tremendously from it. Just take away that “privilege”, you will find the gahmen giving less bullshit and nonsense. Unless the gahmen and ministers suffer the same as the layman, there is no way they will stop the nonsense. The greed has already blind them that they are beyond help. The last thing singapore need is a dose of greedy and self-serving government.

Go to the East Coast Beach and you will be surprised to see the numbers of foreginers enjoying and over-crowding the place, same in MRT trains and shopping centres…….”No more Spirit of Singapore” if really feel their presence!
Likewise, the emigration rate here is also increasing ! Maybe foreign PR NMP one day!

I look forward to Rajiv Chaudhry’s next piece — and hope he will examine whether the fruits of Singapore’s ballooning GDP are being equitably distributed among the people.
Also, what are the solutions to the rising costs of property. Some people used to gleefully say they were living in HDB flats, which they hoped would rise to $1 million in worth. But as Rajiv Chaudhry says, these is but wealth on paper.
I am sure many of us average-income earners would be happy living in Singapore, if the costs of living were lower.
We don’t need to wear Rolex watches, drive Mercedes cars or live in a million-dollar property, to say we have arrived. All we want to is to live comfortably, within our means, raise our children to be good citizens and, last but not least, be happy.

Foreigners are not here to work, but also here to stay, and replace Singaporeans.

Do cherish your 2011 vote :)

#23) Do you think a $8/- per hour is better or $10/- is better. do you think you can have a better life if you have S$200,000/- per month, S$2,500/- per month or only S$300/- per month.

My point is this: people earning more than the minimum wage, including many low-income families, will have to incur additional costs, because the costs will be passed to consumers. even the workers who are paid minimum wage may have to incur a higher cost of living.

My bigger point is this: using heart alone is not the best way to help the people you wanted to help. the situation is that it is hard for the lowest lowest income group to improve their life. and the reality is that everyone needs to fork out more to help them.

The question is whether people are genuinely willing to pay more to support a welfare state. If you pay taxes, you are better off than many people already. If you think you are paying the “govt” a lot now, you’ll have to pay even more taxes under the welfare state scheme. (If you look at the budget report, the salary to the politicians although high is insufficient to support support much more social welfare.) Are you genuinely interested to help the people in this way?

The next important question is how to make it work. Implementing a successful and efficient (i.e. low wastage) welfare system is not just about redistributing wealth from the rich to the poor. Trial-and-error without due consideration adds considerable economic and political burden to future generations.

Mr Rajiv writes: “History has proven that Singapore’s economic and political decisions in the past were “right”. ”

- So are all the ISA detentions without trial, physical and mental torture including women who were stripped naked and slapped, men who had urine poured over their heads all “right” political decisions?

Ravi Article is very well written. The past economic model of dependent on MNC and GLCs that exclude Home Grown Enterprises has already fail and PAP still in their Dream lands.

Look at Taiwan, their Scholars from MIT go back Taiwan in the 80s to create World Class Enterprises but our scholars came back to join PAP.

Currently Singapore has only Creative Technologies who is create by Non Scholar Mr Sim worth to mention but also dying very soon.

Good Luck for Singapore!

it’s all in maslow’s hierachy, baby. All in maslow’s.

#54: The past economic model of dependent on MNC and GLCs that exclude Home Grown Enterprises has already fail and PAP still in their Dream lands.

i’m not quite sure this concludes that local enterprises are suppressed. the edb has been trying hard to grow them but hasn’t been very successful. the fact that creative is mostly based overseas shows difficulty of breeding local business that brings revenue INTO singapore

this ultimately has lead the govt to continue to rely on GLCs to compete globally, and thus adding on to their political burden…

i feel that if ministers are taking care of themselves the more they should look into the minimum wages for lower group in order to sustain and maintain the standard of living as we more on.

besides, they are over paid many times and lower group pay getting decreasing??

as economy grow so as expenses so it logic and fair increament should be across the board porportionally. if not, it is a problem for lower group to suffer which happening now.

i feel sometime if i have voted the party to become ruling party and you seem to take good care of yoursevles but not us then i think something is wrong somewhere.

If you Study Econonmic you know what is crowding out effect!

Why America, Taiwan society can be so successful cause of their competitive , enterprenuer and fearless environment in business, political area.

Why we Singaporen are so fearful, study hard and work in MNCs or GLCs and listern to your Boss. It is Gov Induced Culture of suppressing any alternatives and oppositions that might be of greater influence than them.

That is life in Singapore!

“My point is this: people earning more than the minimum wage, including many low-income families, will have to incur additional costs, because the costs will be passed to consumers. even the workers who are paid minimum wage may have to incur a higher cost of living.”

instead of suppressing wages, bring down the other factors in cost of living: public housing prices, petrol tax, ERP, GST, office rental, retail rental etc.

“and the reality is that everyone needs to fork out more to help them.”

Help who? Our great ministars

if you check out the budget report which is available from MOF website, you’ll see that although the ministers’ pay are high, the total expenditure for political and parliamentary appointments is small compared to the whole public expenditure, not enough to increase social welfare support by much (compare it with this year stimulus package)

they justify the high pay by the necessity to retain people who can bring in the revenue. How true is it? To some extent, I think it is plausible — personal income tax and GST in total take less than 20% of the fiscal revenue. Corporate taxes takes up about 10% to 20%. The rest (majority) arises from either direct or indirect state ownership of entities or investments.

since they generate most of the economic activity, you do have some right to blame them for not getting you a job. but bear in mind that the more you expect from them, they harder they work on what they are good at — creating jobs by meticulous central planning — and this cycle continues…

“they justify the high pay by the necessity to retain people who can bring in the revenue. How true is it? To some extent, I think it is plausible — personal income tax and GST in total take less than 20% of the fiscal revenue. Corporate taxes takes up about 10% to 20%. The rest (majority) arises from either direct or indirect state ownership of entities or investments.”

there are many other taxes like petrol tax, alcohol tax, cigarette tax, COE etc. Also, why are HDB prices so high. Please provide detailed breakdown on cost, and save the BS on market subsidy.

kkk,

Also, let me stress this, we are not asking for social welfare. We are only asking the govt not to make too much money out of us

Angelina #33 and Que #32 were spot-on in their respective posts.

Joe #55: “it’s all in maslow’s hierachy…..”, unquote.

The poorer Singaporeans start from the basics; hunt for jobs, get a job to buy food, shelter…..and survive with monthly arrears here, there and mostly to the PRIVATISED ESSENTIAL GOODS AND SERVICES PROVIDERS WHICH ARE ALL PROFIT CENTRIC. The housing, utilities, healthcare, public transport, education, medias are all profit driven entities.

The Talented and Elite Singaporeans start with a huge bank account, buy highend properties locally and overseas, flying first and business class, dine and wine and enjoy the companies of each others’ tai tai, dance and changing partners.

The Rulers increasing foreigner intake to help in economic development to benefit Singaporeans ? Do the average Singaporeans think they benefitted from the Scheme ? I FEEL SQUEEZED !!!

patriot

Karl Marx had said throughout History, One Class will be displaced by Another Class and afterwhich they will tightly secure their power . There is no fair System expect in True Democracy like the US.

Now the Ruling Class of Singapore had to justified its existence and they are fearful to be displaced and will try whatever means to suppress the oppositions!
Are we going to serve Ns to protect this class.

Mr Rajiv also writes: “History has proven that Singapore’s economic and political decisions in the past were “right”. ”

- So are all the charges, jailing and eventual bankrupting of J B Jeyaretnam “right” political decisions?

“The rest (majority) arises from either direct or indirect state ownership of entities or investments.”

KKK, where do you think the money for investment comes from? Out of the blue? out from air? That’;s quite a tunnel vision, omitting other stuff just to bring out some points. Nope, those are partially from your CPF contribution, that is from 20% of your own wages. Although personal income tax and GST contribute less then 20% of our fiscal revenue, another part of the fiscal revenue is derived from the investment that your CPF money is used for, with a measly return rate to you. and don’t forget that that money is usually freeze inside the account unless you are buying homes or you are retiring with an ever changing age-requirement. and don’t forget what Small Time Businessman Says, that there are ofhter form of indirect revenue generation”

“workers who are paid minimum wage may have to incur a higher cost of living” Somehow a fact seems to be missing here, they are a higher cost of living and that’s the problem here…lol…

Oh man, KKK, thx for the good laugh “since they generate most of the economic activity,” that’s a really good one plus “they harder they work on what they are good at — creating jobs by meticulous central planning” I really enjoy it…

CIGXM how much of this economic activity is generated by them? Yes they affect our growth with their fiscal and monetary policy mr KKK,but generation of most economic activity? however, you seems to have forgotten that Labour Hour are contributed by the people. and that, In order to appeal for MNC FI etc in Singapore, Singaporeans has been suffering from stagnating wage growth.

“if you check out the budget report which is available from MOF website, you’ll see that although the ministers’ pay are high, the total expenditure for political and parliamentary appointments is small compared to the whole public expenditure,”

Using this yardstick, then a lot of developed countries will have an even relatively smaller ministerial salary payout vs their whole public expenditure – crude yet reasonable judgment by their much bigger size hence a bigger pubic expenditure. i do not have the figures, please feel free to dispute.

“since they generate most of the economic activity, you do have some right to blame them for not getting you a job. but bear in mind that the more you expect from them, they harder they work on what they are good at — creating jobs by meticulous central planning — and this cycle continues…”

well, did we initiate the cycle in the first place. they have guarded jealousy the need to be the only ones (fixing the oppos ???) to control and plan. now no more magic right and trying to parry away this ‘nagging burdensome unwanted’ expectation.

Thanks, Rajiv, for paraphrasing some of the ideas in my TOC article in a more accessible form. However I would like to point out one error. You say that GDP in Singapore increased from S$96 billion to USD 257 billion from 1990 to 2008. The correct figure is S$257 billion which would be a rise of roughly 2.6 times. Also what was the increase in real terms and per capita, which is more relevant in developmental terms, and also illustrates how the current government growth model is based on the fairly simple strategy of just adding more labour and capital inputs. This was the same strategy that ended in disaster for the Soviet Union. In fact labour productivity fell by 8% in 2008 and was slightly negative in 2007, which has important consequences for real wages. I await the latest productivity figures with interest.

If the Government does not bring in the foreigners to reside in SIN, how are our superstores, supermarkets, in fact all the retailers, going to survive. Who is going to buy our housings and to keep the property prices high ? There were village squatters to resettle to HDB, about the only property most resettled Singaporeans are able to afford. Now that almost all villagers are resettled, the only way left to prop up the price of HDB is to relax the rules governing the eligibility to sell them.

Why did the villages have to be cleared of occupiers, who were there long ago, and the cleared(of settlers) lands left un-utilized ? Why do the HDB keep building new estates, when almost all Singaporeans are already in HDB Housings ?

When our leaders say that they care for us, i believe them because we are their money generating machines.

patriot

Thanks, Kenneth, you’re quite right.

The figures have gone out wrong. The correct historical GDP figures (at current market prices) are:

1965 – S$2.96 billion
1990 – S$66.78 billion (x 22 over 1965)
2008 – S$257.4 billion (x 4 over 1990)

I’ve tried to address some of the points you have raised in the later parts, though perhaps not in exactly the same terms.

Ordinary S’poreans are bearing the brunt of this silly growth-at-any-cost policy. Life is stressful in this overcrowded island.

Don’t expect any empathy from the Higher Mortal ruling elite because they continue to live in their bungalows in prime locations guarded by Gurkhas. They are living a life totally different from Lesser Mortals.

To “Right” #53 and #66 ”

I accept the criticism on human rights abuses.

I was focusing more on the economic aspects of political decisions such as keeping the economy open etc.

My apologies for the oversight.

Growth was generate through the expense of general populations thru indirect taxation like foreign worker levys, super inflated HDB, transport prices by controlling the supplies but added sweetner like rebates with minimum impact.

I always advised younger people think very careful for big tickets item like HDB flat and don’t fall into the trap of 10 yrs car loan as the bank and gov will always suck your blood if you just earning $2500.

As we know Economic Growth is generate by Population Growth, Land Growth and Technology Growth. The Growth in past few years was artifically inflated without sustainable fundamentals and now is the effects we are enjoying!

Older people are really wiser. They are the ones who should stay. People below 30 can easily get another job. They should fo 1st when there’s an economic crisis.

I board the bus everyday & find that there are less foreigners. The MRT is another thing. I try to avoid taking MRT altogether.

[...] reading here. Singapore has done well on the HDI, on which it is ranked 25th. However, in its haste to grow the [...]