by Leong Sze Hian
I refer to the report “Singapore achieved record high investment commitments last year” (Channel News Asia, Jan 24). It states that “The highest value-added expected to be generated from investments here was in 2008 with S$14.7 billion”.
What does record investments mean for ordinary Singaporeans?
Well, in 2008, we had a negative real median wage growth. As a layman, I find this rather puzzling, and a paradox. What’s the point of having record investments in Singapore, and creating more than ten thousand new skilled jobs, when the outcome is negative real median wage growth?
In 2009, real wage growth was also negative, for the second consecutive year. With last year being the best GDP growth ever in the history of Singapore, at 14.9 per cent, will we see a significant real median wage growth?
Inflation for December last year, is at a 2-year high, of 4.6 per cent year-on-year.
So, if nominal median wage growth for last year is less than 4.6 per cent, does it mean in reality, that we may have a third consecutive year of negative real median wage growth?
Singaporean workers may be waiting anxiously for the release of the median wage statistics for last year, from the Ministry of Manpower. Will it be negative real median wage growth once again, or a positive one, and by how much?
According to the article, Singapore achieved “record high investment commitments last year and this momentum is expected to continue into this new year”. Does “commitments” mean the amount that international firms say that is expected to be spent?
What’s the point of the Economic Development Board (EDB) saying that it will also contribute S$14.4 billion in value-added per year to the country’s economic growth, if median wage growth is negative or very low?
EDB also said that it will “initiate and support the launch of talent and leadership development programmes to firmly entrench Singapore’s position as the home for talent in Asia”. To what extent has our liberal open foreign talent labour policies, contributed to negative median wage growth for Singaporeans, or the competitive job situation vis-a-vis Singaporeans and foreigners?
If EDB foresees “more companies such as global mid-sized enterprises looking to set up shop here”, shouldn’t that result in significant positive median wage growth?
I hope that the correlation between record investments and negative median wage growth in the record year of 2008, was just a once-off fluke event, with no causal relationship. Because, if high investments often come coupled with negative median wage growth, then maybe we should re-examine out economic growth strategies. What’s the point of attracting more and more investments, if Singaporean workers do not benefit by way of higher wages?
By the way, real wage growth over the last decade or so was only about 1.1 per cent per annum, and the bottom 30 per cent or so, of Singaporean workers may have had negative real wage growth.
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Zeitgeist: Moving Forward
Check this out, how GDP actually degrades services, its in the middle of the online Doc
Dude, commit to invest has a time lag between securing the signed investment vs when they set up shop. Such projects take time. You do know they are not opening your neighbourhood coffee shops.
Moral of the story : work hard and smart and earn and save as much as possible while wage growth is still positive and retire when it turns negative. But how many of us could achieve that goal?
@Sure or not: I think you’re missing the point. Even if they are not opening neighbourhood coffee shops, creation of thousands of new jobs and incoming investments _should not_ result in negative real wage growth.
Couple that with the 1.1% real wage growth over the last decade, and the trend is worrying: if the goal to attract foreign investment does not result in prosperity for Singaporeans, then it’s either a misguided policy (which I don’t think it is) or misguided execution.
It is always difficult to re-concile any “statistic” that the MSM / Authority care to disclose with reality & other “statistic” . Mr Leong can slways point that out. Wonder if he should start a class or two for our talented/very well compensated Civil Servants and their political superior ? Doing it as a public service for free, would be my dream. Or we could pass a hat around, except that the targeted “students” will be sbsent, no ?
fact is that cost of living is going up but wage growth remain stagnant or negative for many singaporeans. all these happen despite the “growth in GDP”, “record high investments”. something is not right.
for every action that the government takes, be it bringing in investments or foreigners or housing policy – the ultimate objective should be to improve the lives of singaporeans. government should not lose sight of this.
seriously, if people are living in anxiety over mortgage payments and
surviving with low wages, who cares about rankings (GDP, etc) which the government seems to be obsessed about. sure, ranking is one way they like to brag about to create the perception that they are doing their job. but take a walk in the heartland, listen to what people are saying. take off the blindfold of statistics. truly see what’s happening, how people are feeling.
does “record high” investments guarantee a substantial wage growth ? if the government seeks to please businesses more than working for the good of citizens, then it will never happen. businesses will always demand cheaper foreign labour, and what will government do to protect local labour ? we don’t want knee-jerk reactions near election time to address this issue. for all you know, “record high” investments could be used to justify bringing in more foreigners.
@Callan Tham, strangely those who are bitter will find the lowest point of the bell curve to somehow create a fuss. We didn’t attract foreign investment over a 3 years period only. You mean to say our real wages over the last 30 years did not increase?
The problem with some people is that they rather sit in an ivory tower and believe statistics (which contain margins of error) rather than opening their eyes and ears to know what’s going on the ground, and applying common sense.
Too much head, too little heart. That’s what you get when you have a bunch of scholars with smooth sailing careers from the time they graduate from school, earning good dollars per month, making policies. How would you expect them to understand the bread and butter issues of the layman ?
No wonder they keep telling you that a flat costing a few hundred thousand dollars requiring repayment with a life time of debt is AFFORDABLE. Dear Singaporeans, do you seriously buy this ? I hope Singaporeans have more common sense and think a little deeper before accepting whatever is shoved to us through the mainstream media. Take responsibility for our lives. If you accept, you live with it. If you don’t, reject it.
@Sure or not: I think you better re-read the article. What you are saying is conflating the issues.
No one is saying real wages over 30 years did not increase. Sze Hian has pointed out that the last decade “boasted” (if you could call it that) a 1.1% per annum real median wage increase.
But at the same time, we are attracting an ever-increasing amount of foreign investment, probably much more than a 1.1% per annum increase. This coupled with contributing factors such as GDP growth, jobs creation, etc, should result in a higher increase in median wage than 1.1%.
Which is not happening, not now, not in the last 3 years, and not in the last 10 years. In the last 3 years that has actually decreased.
This isn’t finding the lowest point of the bell curve. This is median wage we are talking about. Smack in the middle. The peak of the bell curve.
If your point is we should be happy with the 1.1% increase, then please say so. Because that is an altogether different issue.
Plot a graph of the real median wage over the last 10 years under Lee Hsien Loong and see for yourself. Then you will be sure.
Sure or not 30 January 2011
If real medium wage increases do not grow as fast as gdp growth, wouldn’t you be puzzled as to where the differential goes to & how it all translates into something good for singaporeans – even assuming that the real medium wage increase is accrued to locals and not mixed with PRs or foreigners in some statistics ?
Mean income increasing much faster thean median income while those at the low end see their incomes stagnating before factoring inflation. Growth at all cost for who? for what?
http://yawningbread.wordpress.com/2010/12/05/income-inequality-may-be-increasing-again/
Foreign direct investment and median wages have nothing to do with each other at least going by the way they’re defined. FDI refers to investment in fixed capital such as plants and equipment, which has nothing to do with the labour market.
It’s not surprising if one goes up while the other remains stagnant or declines.
@Defennder: Yes, they are not directly linked. Then the question becomes: why is this trumpeted as a triumph when most Singaporeans do not benefit from it?
It shouldn’t. And if most people see that, then we don’t need to have a discussion. But that will not be reported in the papers, because it won’t look good.
I don’t think I’m alone when I say Singaporeans should prosper if the Singapore economy prospers. Despite signs (and never-ending stories) of the latter, the former hasn’t really materialised, or at least, not for middle- to low-income Singaporeans.
Good article Mr Leong.
Amidst the tacttful political confusion, LKY & his party is creating.
You have written an article which is very important to show Singaporeans the true economic nature in our country today.
Singaporeans should be reminded, that $10milion was spent for foriegners to integrate in Singapore.
How much was spent for the Malays and all other races to integrate. Hardly any except for some RC events and yet we can stick together all this while.
This confusion is to create fear and for people to know that LKY is still in power.
Its a tact to distract attention from the real economic issues of today in Singapore.
LKY is indeed a master politician, but I am sure we are smarter citizens.
the govt isn’t interested in raising the median pay … it is as simple as that.
@Callan Tham
I don’t see anything wrong with the CNA article. All it says is that there were record high investments as of last year. They’re just reporting this as fact and there’s no “trumpeting”. As for jobs and earnings, as I have said they’re not directly related but please see this line in the report:
2008-2009 are recession years. So I think it’s not unreasonable if there was negative wage growth in those years. You certainly have a valid point in saying that economic growth and investment growth must benefit Singaporeans, but unless the article quoted some minister as saying that this will improve median earnings, no one should take this as an indication that they have stated so.
@Defennder: What is not said is just as important as what is said. No minister will dare to say anything about improving the median wage, nor will it be in their interest to say or do so. It certainly isn’t their priority, GDP growth is.
But while I accept that there is no overt “trumpeting”, the lack of questioning from CNA is disconcerting, and covertly, to me, it is as good as “trumpeting”. Matter of perspective of course, but the very pliant press is a sore point for me.
The critical thing, personally, is to see if the 2010 median wage level has recovered sufficiently to trend. If not, then at least to 2008 levels.
And if not, well, more questions need to be asked.
Have stopped believing in all those big name stastitics, now we view them as trash, all out to mislead us.
Everyone could see around us, record FDIs
do not translate into economic benefits for most, only for the rich, powerful elites and their “Pai Ma Pi” associates.
Good article, resonates with our feelings
put into print.
I know of a lot of company who set up office here with a couple of staff who are foreigners. Collectively they sucked our resources and than close shop. I wouldn’t think such investments are here to create job for local or meant to be permanently presence here. They are fair weather investors and will not contribute any net gain to Singapore society.
well done. another great analysis and real hard truth to counter the white lies that the gov is spewing thru ST
what analysis? the writer is just banging that old drum of foreigners coming here to take our jobs, our business, our wives or husbands… Small town thinking in a big international city.
what analysis? the straits times and PAP apologists are just banging that old drum of PAP deserving claim for creating our jobs, our business, our wives or husbands….North Korean thinking in a big international city
Record investments = Negative wage growth?
It only implies that record investments are achieved at the expense of ordinary folks’ wages!
is Mr Leong SH going to publish his version of “Hard Truth, when 1+1, not always = 2″?
:D
its negative, BECAUSE, these investments HAVE eaten into our reserves, via SUBSIDIES !!!
edb grants, productivity incentives, tax free status, medium to small enterprise grants and incentives, AIS, etc etc, many more kind of these SUBSIDIES can be found, if you look.
WHO PAYS FOR THESES SUBSIDIES, to make the gov LOOK GOOD ???
ITS YOU AND THE MAN IN THE STREET, UNEMPLOYED TOO BY GST, WATER CONSUMPTION DOUBLE TAX,(poo for water) ETC ETC.
your t.v. license fee, 800,000 hdb household, x $120 is, OBSCENE, and when i wrote about this sometime back, some idiot locals studting in some stupid aust uni says, the fees is for children programs, like they are paying the child actors in millions.
NO COUNTRY IN THE WORLD, MAKES OR COLLECT SUCH FEES, ONLY THIS ISLAND.
but then, LOCALS ARE DAFT, AS MM SAID.
REMEMBER, YOUR HDA FLATS WILL GROW UP TO I MILLION HOUSEHOLD OR MORE WITH IMPORTS AND NOT COUNTING THE REST OF THE LANDED OF CONDOS OR APARTMENTS,
DO YOUR MATHS, DAFT SERVING THE SERFS !!!! AND
PAYING FOR NOTHING !!!
The govt want us Sporean to work hard for COMPETITIVE WAGES… How to work when the wages still remain the same while cost of living goes up higher and higher… This logic cannnot be sustain… What is the govt trying to do? Simply no logic…
High GDP and high “growth rates” means nothing to native Singaporeans as they bring in foreigners to fill the job vacancies.
The ones enjoying HIGH SALARIES are the PAP ministers
http://www.nytimes.com/2011/01/31/world/africa/31classwar.html?_r=1&hp
are we going the way of egypt, most likely…..
think of the unemployed and underemployed, the rich and the middle class, not counting the poor yet…
sure, we’re going that way…
finally a hard truth that can only be found here and TR. thank you very much.
Remeber, PAP’s goal is GDP growth at any cost……because their bonuses are pegged to GDP growth!!!
@eaglefly: TV licensing fee exists in other countries too. It’s about 146pounds in UK.
One way to save on TV license fee is to watch TV only at community centres.
Maybe they will still charge you – Public Viewing fee!
If you really want what you want, vote in more opposition. Then pap will sit up and get you what you want. Right now its all talk, no action. MOVE man.
I work for the EDB