Tan Kin Lian / Columnist
Just pumping funds into the economy will not do. It is also important to curb unemployment, and Singapore can do this by creating new “Economic Recovery” jobs.
Being an open economy, Singapore has been badly affected by the global recession with a severe contraction of the economy in 2009. Many people have lost their jobs.
There is an urgent need to create new “economic recovery” jobs for these displaced workers and new job seekers.
Examples of these jobs are teaching assistants in schools, health care assistants in hospitals, carers to look after children, elderly, disabled and the sick, customer service assistants in train stations, bus terminus, town centers and neighborhoods.
These assistants can reduce the stress from employed people who now have to spend work longer hours to keep their jobs.
I hope that the money that is set aside in the Jobs Credit Scheme can be used to create these “economic recovery” jobs to improve short term employment to large numbers of people and tide them over until the recovery of the global economy.
Availability and Security of Employment
There is now widespread recognition that the key to recovery is the availability, security and fair terms of employment. If people feel secure about their employment, they can continue to spend according to their capacity.
This will create a stable economy that works efficiently and creates the right balance of work and leisure that can give a satisfactory standard of life for the people.
It was once thought that the free market was the best mechanism to ensure that the right goods and services are produced and to give employment to people according to their skills. The global recession has shown the weakness of the free market.
Being largely unregulated, it has attracted large numbers of talented people to work in financial services that was creating false wealth. This system has now largely collapsed.
The free market is now not able to generate the new demand that will create employment for the large number of displaced workers and new entrants to the job market.
To solve this problem, we need a new source of employment, which can only be provided through the public sector. The state has to create new “economic recovery” jobs in the public sector and to build infrastructure.
President Barack Obama recognizes this role for the state. His administration is giving top priority to make this happen quickly. He is employing more teachers, more people to maintain state facilities and similar jobs.
Some people will argue that these public sector jobs may not be the best use of the human resources that can be better utilized in the private sector. This may be true in a few years time, when the economy has returned to good health.
Fair Terms of Employment
A good approach is to make these “economic recovery” jobs pay a minimum wage (and not a generous wage) and be for a term of two or three years only. When the economy is able to generate better paying jobs, the workers can abandon these “economic recovery” jobs and move to the private sector jobs.
The key is to make jobs available to anyone who is willing to work at a minimum wage or higher.
In a weak job market, workers can be exploited with low wages, even by companies that are operating profitably. Unemployed workers will be willing to get a job at any wage. The wages of the existing employed workers will also come under pressure.
If the workers do not get adequate wages, they will reduce their spending, causing delay in the recovery of the economy.
Therefore it is important to ensure that all jobs should give a minimum wage. If there is a supply of “economic recovery” jobs at this minimum age, it will set a floor on the wages in the free market. This will give the confidence to workers to have optimism in the future.
Stimulus spending not enough
In normal times, the free market works well in matching supply and demand and provides choices for people to find suitable jobs and to spend their income on products that best serve their needs.
A major shock, such as the global financial crisis, can cause many people to lose their jobs with a severe impact on the economy. Unemployed people have to curtail their spending. This caused other people to lose their jobs due to reduced demand. Even the supply of credit gets disrupted as bankers become more careful.
The economic experts did not foresee the severity of the collapse of Lehman Brothers on the global economy. If they knew, they would not have allowed this bank to fail.
Its failure has caused so much damage that it needed several trillions of dollars of stimulus spending in America, China and other countries, to stabilize and restore the global system. Even Singapore added its share of stimulus.
There is still much uncertainty regarding the positive contribution of the stimulus packages on the economy. Unemployment continues to rise. Consumer demand continues to fall, although at a slower pace. Economists are worried that these packages will take a long time to work, and recovery will be a slow and painful process.
Not a Planned Economy
Some people will perceive that I am suggested a centrally planned economy, where economic planners or bureaucrats decide on the number of people to be employed in each occupation and the wages to be paid for each occupation.
I am not advocating such a system.
I am suggesting that state should ensure that jobs will always be available at the minimum wage level to any person who is willing to work on these terms for a temporary period. This will provide competition to the private sector to produce goods and services of better value to consumers and be able to pay higher wages.
This will help to make the market economy work more efficiently by reducing exploitation and wastefulness, and giving workers the confidence to consumer according to their stable level of income.
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aiyoyo
cna news :
Lim Hwee Hua urges nations to be mindful of recovery patterns
is elites to create more recovery jobs?
aiyoyo
I am 69 and to find a job I left Sing for Indochina.
I found my own job by growing sugar and selling them
I also sub-edit for an English newspaper and I write and take press photographs too.
I am thinking of teaching writing and journalism and I mean in English to the local English journalists. For foc.
My pay as a journalist is very low as my employer is struggling. 180 sing dollars per month.
But, life is good to me.
I enjoy my job.
@94) some comments
respect your views, but here are my speculations:
(1) of course it is still expensive. We should ask why we didn’t pump R&D money back 5-10 years so that NOW it can be affordable. Still relying on foreign tech as short cut? You TKK (wait long long). Too many scholars in wrong positions doing f***. Yeah, too much $$ in investments too.
(2) Yes Spore is too small, but there is actually a shortage of PV supply worldwide now. Export potential = employment, get it? Also, any tech used locally always has potential for further development. Question you should ask is what has our gahmen done about it? Compare with experience in Germany, Europe, Japan & USA. Expensive but people still adopting – why and how? They willing to cough out billions for a better tomorrow, we blow our billions where huh?
Of course cost, potential, future earnings, etc… always true in any venture. And admit PV is expensive. But then it is just a priority of where one put one’s money. If $60+b from TH losses used in an Apollo program, we could have plant our flag on the frea***** moon instead of top of Mt Everest! Do your sum, you know how many HDB blocks $60b could have solar-powered, even with current 1G tech? I say ball-park of couple of 10,000′s BLOCKS! To install, maintain, upgrade, train, manufacture, service, etc… for 10,000′s installations, what is the “short-term” potential employment/market/industry? Plus, less reliance on fossil fuels. (Oil prices going up now, right?). Now, if we only take $1b out from GIC/TH for tech development …. wah, $1 with 9 zeroes… too much risk. Better re-buy BoA.
Hi #97) mice is nice
Dr Goh Keng Swee, who was the architect of Singapore’s economic miracle, once gave the following answer to the kind of questions posed by you, “You will know an elephant when you see one charging at you”.
There is some discussion about renewable energy. The question, “will we be able to get solar energy down to a competitive cost?”
I am hopeful that this will happen within the next few years. Here are some reasons for my confidence:
a) The advance of science and R&D is quite staggering. 10 years ago, most people were sceptical about producing potable water at economic cost. We have now been able to achieve it.
b) Barack Obama is also investing a lot of money and his credibility in this effort. We will be able to benefit from some of the research being done there.
c) Singapore has sun all year round. So, we should be able to get greater efficiency in our infrastructure of solar panels and other equipment
d) I like the concept that solar energy that is not used immediately can be supplied to the power grid to be used by other users. This saves on the cost of storing the energy in battery.
I agree with the suggestion by theforgottengeneration that we should be investing in the R&D for this effort. It will create many engineering and supporting jobs and also build our knowhow for the future, and for export.
Hi kelvin #96
Yes, the Government is creating some jobs. This effort should be multiplied 20 to 50 times to get the desired effect. It has to be more than just teachers.
@94 some comments,
Forgot to add your points on “..short-term employment..”, “…without a larger market to sustain this business..”, etc. True, true, true.
But what is rational for, say, development of our Bionix IFV? How much development cost? Only market = SAF. How many did we built eventually? What is/was the export status thus far? Like NEWater, we die-die must develop it, is it? Cheaper to upgrade the M113′s? What was the returns in dollars & cents? Ok, I am not privileged to calculate how many can be made with $60b — but probably can replace the entire SBS bus fleet + extras! (Aside, do these thingys need COE on our roads?)
@102) Tan Kin Lian
c) See reply @93 – Spore insolation is 4.6 kWh/day, which isn’t really that great but yes we don’t have winter months, etc…
Any ideas how garmen can be convince to pump real $$ into such schemes? Translating to local JOBS, of course. Know HDB is currently championing solar, but seems rather a closed door affair. Again, the public sector “mentality issue”?
104) From the inside, heard there are not enough fighter pilots for recent purchase of the F15s’
hi Mr Tan Kin Lian,
i like your humour in post #101,
////Dr Goh Keng Swee, who was the architect of Singapore’s economic miracle, once gave the following answer to the kind of questions posed by you, “You will know an elephant when you see one charging at you”.////
in response to my post #97
////what are the higher paying jobs that will appear?
how do you know that many will move on?
how to acertain the economy really recover for good, & not just grow another bubble that will burst again some years down the road?////
now, can i ask why is the elephant charging in my direction?
107) mice is nice
why is the elephant charging in my direction?
good question, I too do not have the answer
now to side track…..
And how do you tell an elephant from Sri Lanka from an elephant from Sabah?
Answer: Look at his passport. : )
81) mice is nice
I was side tracking not refering to any of your post, no worries
hi KopitiamApek,
i also sidetrack abit eh…
i to elephants are afraid of mice? 8)
do you think the elephant so cooperative will show passport?
Hi #107)mice is nice,
can you make sure your last question …
////
now, can i ask why is the elephant charging in my direction?/ ///
is not a waste of TKL’s and our time?
@98) mice is nice
//how to acertain the economy really recover for good,//
You can only if you are omnipotent.
// & not just grow another bubble that will burst again some years down the road?//
Try using barter and do away with inflationary, quantitative easing, a euphemism for resorting to the printing press to monetize debts.
hi Notalone,
so true, but you should have posed this qestion to the 1 who 1st mentioned it.
well, how to take such reply seriously. lol…
………………………………………………………………………………………………………………………
hi Curious,
huh, what about people who are tasked to forecast economy? they are omnipotent?
i support barter!! say no to credit!!
#112) Curious,
‘mice is nice’ might be interested to know the answers you have diligently posted.
But a more mature and logical person should ask these questions in a more sincere manner.
You are too kind and patience.
re Notalone,
your “more sincere manner”?…
////is not a waste of TKL’s and our time?////
yeah, i can sense your sincerity in that statement above.
lol…
#113 mice is nice
You and notalone (#114) are echong each other. Are you the same person?
You seem to be posting views under other names as well.
Sorry, I will not be replying to your questions anymore.
@106) ACACIA
Spore context — fighter Ps must have all F-15 skills + balls carrying payload to infinite range. This limits our small pool much further?
aiyoyo
cna news :
SINGAPORE – All management staff in Singapore Airlines (SIA) will from July take a salary cut of at least 10 per cent, including its chief executive, who will take a 20 per cent cut.
when economy recover? when? elites..
aiyoyo