Former National Wages Council [NWC] chairman, Professor Lim Chong Yah, stirred up controversy since he made a wage reform proposal at a public lecture calling for a 50% increase in wages for the low-income (those earning below S$1500) over three years, and a freeze in wages for high-income earners (those earning S$15000 or more). So-called “labour chief” Lim Swee Say took issue with the proposal, saying that productivity and wages go hand in hand. He said the “labour movement” is concerned that not addressing the issue of productivity will lead to a “no-win situation”. Lim Swee Say also said that if wage increases outstrip productivity gains, companies may cut jobs or move out of Singapore and there may also be structural unemployment.
Netizens definitely have good reasons to call Lim Swee Say the ‘talk cock minister’. First of all, I don’t see how Lim Swee Say’s pay (and that of his colleagues) goes hand in hand with productivity. Perhaps the only way to measure his productivity would be how many great games he managed at the golf course, or how fast and how often he can regurgitate the same stuff we have grown tired of listening to. In fact, how to measure the productivity of a CEO or someone in high management who make decisions which affects the fate of a company? Maybe a good CEO would be the one who lose the least money or the quickest in retrenching staff to stay profitable. As for the bad CEO, how fast he can screw a number of companies thrice over and still get millions in severance and bonuses would be the measure of his productivity.
Isn’t is absurd that companies won’t blink an eye paying a CEO millions in severance and bonus after getting screwed but our so-called “labour chief” is concerned that raising the pay of just low-wage workers may cause them to move out? In my opinion, low-wage workers are often those who are not as academically qualified and also older with less job mobility. In many cases, unless they grow a few more arms or get a sudden boost in vitality, they are unlikely to be “cheaperer, fasterer or betterer” than their foreign counterparts. In some cases, it might not even be possible to employ technology to increase their productivity. When Lim Swee Say said that companies may move out of Singapore because of wage increase for these people, I would like him to name the companies which still employ large numbers of low value-add, low-tech workers in Singapore. These companies deserved an award for not leaving Singapore when most started doing so to China or some other parts of South East Asia since 1998! All the more so if their work force aren’t already dominated by foreigners by now! I would be surprise that any low-tech, labour intensive company would still find Singapore attractive and competitive cheap enough to set up shop here. Assuming that it is true companies are attracted to Singapore for cheap labour, then the question would be why such a policy is still pursued knowing that in the long run we could never outpace competitors like our neighbours or even China. Didn’t the People’s Action Party [PAP] government, which claimed to have the foresight and the best talents this country have to offer, already think of that?!
That’s not mentioning that relocating a company is not an easy decision to make, because it’s not as easy as just firing all the workers here and switching off the lights in the office. Don’t even talk about moving out of Singapore when moving an office between 2 building within the CBD in Singapore can cost over a million dollars. That’s just the cost of building the infrastructure in a new office, employing the services of movers and the cost of demolishing the old office to pre-lease conditions. When moving to a new country, almost everything is built from scratch which means when a company decides to move, there will be more than one factor. Perhaps wages would be the last straw that broke the camel’s back, but it won’t be the only one.
Next, while it maybe true that some companies may cut jobs, for e.g. local SMEs that runs cleaning services, many of these are similarly employing large number of foreign workers, or old folks with low CPF contributions. I am not surprised if a lot of these companies have under-bid for their contracts and in return exploit their workers to stay in the black. Don’t forget that these companies can’t go anywhere and while it might be possible that they could wind down if their revenue cannot keep up with cost, the services they rendered are still required and another company may pick up the slack and these workers will still find jobs. If a low-wage Singaporean is unable to get a job, that is simply because companies drunk on employing cheap foreign workers have taken the easy way out because the government has let in one too many.
Even if it may be possible for some employers to employ technology to increase productivity, that will still cost money. New technology also require training to use and maintain, and they often require replacement or upgrades several years down the road which might mean another cycle of re-training and more cost. Granted, the government may provide grants to fund the training, but the cost and maintenance of the technology, and the purported wage increment that will come with the re-training of the workers are all borne by the companies themselves. What the National Trade Union Congress [NTUC] is doing is simply “sugar-coating the bitter medicine for the companies to swallow”. But there’s no guarantee that companies will bite unless there is good incentives to do so. A lot of what Lim Swee Say is saying may sound logical when we consider the bigger picture and not just the low income group, but to use that as a response with regard to those earning less than S$1500 a month makes really no sense at all. If it doesn’t show his complete lack of understanding as to what Professor Lim is proposing, he is simply – talking cock [講鳥話].
Then there is this Lui Tuck Yew who talked about the need to look at the ideas carefully and understand not just the benefits but the consequences. Wasn’t this the same chap who said that raising taxi fares – through extending the surcharge hours – would make taxi drivers work harder? I quote:
“Rationale behaviour would be such that the driver would pick the best time to drive the taxi. And for him, the best time is in a sense the gains, the revenue he could derive as a result. And hence with the peak period in the past stopping at 8pm, there was a lot of feedback on the difficulty of getting a taxi, including call bookings and hence that was one of the main reasons why the taxi companies, starting with ComfortDelGro decided on the need to extend the peak surcharge period.”
Tuck Yew, seriously! As a matter of personal experience, my employer pays $60 in allowance to work more than 2 hours and less than 4 hours on weekends or a public holiday, but will only pay us a maximum of $80 when we work 4 hours or more. Thus, we generally try to finish everything slightly more than 2 hours and not more. That actually increases productivity so none of us will game the system by working a full 8 hours on weekends. Consider this, if the company pays us a fixed hourly rate up to 8 hours, do you think we will try and keep things sweet and short? Why just make $60 for 2 hours when we can make $240 by taking it slow? Simply put, wouldn’t it be more common sense to just eliminate the surcharges so the cabbies stop gaming the system? How absurd it is for Lui Tuck Yew to believe that making commuters pay more will make the taxi drivers work, but raising wages for the low-income would have consequences (which I believe to be negative and possibly dire)? Really, if taxi drivers can afford to take a break because the pay isn’t right then they are already making enough to go around! Why are we rewarding their bad behaviour when we should punish it? But of course, even my ass knows the real objective was never to alleviate the taxi problem, but simply to keep cabbies happy so they continue to rent the cabs and keep the cab companies profitable!
While I am not against the idea of increasing productivity, I am sick and tired of the constant drumming of this message. I find it utterly ridiculous to only suppress the wage component when the other components of a company’s operating costs (i.e. rental, utilities and transportation) costs are left unchecked. After all, we do not see similar value add when landlords raise rents during lease renewals nor an improvement in service from transport operators when fares are increased. What value-add is there when rentals and fares (or even utilities charges) goes up? Are landlords going to replace the old air conditioners with more efficient power saving ones, or even throw in a free renovation when we renew our lease? Similarly, transport operators expects us to pay more fares while we get the same squeezy bus running on the same route with no value add. And what is the general excuse given to justify that? To fight inflation! Well done, fight inflation by contributing to inflation!
But to raise wages to fight inflation – no way. Because our Deputy Prime Minister Mr Tharman Shanmugaratnam said in July 2008 that “a rise in wages without a corresponding increase in productivity would only fuel inflationary pressures”
Duh?! No wonder a friend made the following comment recently:
When they have done nothing of worth and continue being paid salaries unfathomable by most of their countrymen, all they can do is to give excuses and dumb ass explanations… it is unavoidable.
That about summarises my thoughts about the present government too. While I previously did not begrudge the government for the pay scale, that is on the condition that the ministers do their work dutifully for the best benefits of the people. Keep this up, and my vote will be decided before the polls are called in 2016. Perhaps, we need stick the spurs deeper into their hides because obviously we didn’t stick it deep enough in GE 2011.