[h=1]LIM SWEE SAY STRIKES AGAIN: WAGES SHOULD ONLY GROW IF PRODUCTIVITY GROWS[/h]
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10 Nov 2014 - 9:48am
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Singapore is so unique that we are the only country in the world that would keep talking about increasing wages only if productivity increases, minister without portfolio Lim Swee Say said in one of his most oft-quoted comments.
"You will not find anywhere in the world where a labour movement is such a key advocate for productivity
"But in Singapore we recognise that the wage increase can be sustained only if it's supported over the medium and long term through productivity gains."
Mr Lim is also the secretary-general of the National Trades Union Congress (NTUC).
"If we are not able to achieve a breakthrough in the productivity ladder, the wage ladder and job ladder will be constrained."
However, what Mr Lim said does not sync with the statistics.
Last year, productivity growth actually grounded to a halt – there was zero productivity growth last year.
In fact, the year before, productivity actually fell by 2.6 percent.
Even though there was no productivity growth, the government was still forced to announce revisions to wages for cleaners and security guards because of pressure from the ground.
Earlier this year, the government announced that the basic wage for cleaners will be revised to $1,000 from $850. Last month, it was announced that the basic wage for security guards will be revised from $800 to $1,100 but this will only take effect in 2016, when the real value of the wage is expected to then decline.
The wage revisions were announced as part of the Progressive Wage Model (or ladder) that the NTUC has been championing where workers would only see salary increases if they were promoted. It is thus likely that most cleaners and security guards would be stuck with wages of $1,000 and $1,100, respectively, if they do not get promoted.
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This de facto minimum wages are one of the lowest among the developed countries.
There are several discrepancies with what Mr Lim had said.
First, Singapore has not seen any productivity growth over the past two years. As such, logically, there should not be any wage increases.
The wage increases are thus not due to any productivity growth.
Second, Mr Lim is right to say that no other labour union would tie its workers’ wage growth only to productivity as there are other factors that other unions would look at, such as the increases in the cost of living.
Two years ago, prime minister Lee Hsien Loong announced at the May Day Rally that the government hopes to see productivity growth of 30 percent in the next ten years, so as to see real wage growth of 30 percent over the same period.
However, as productivity has not grown over the past two years, it is clear that the government’s model risks depressing the wages of Singaporeans.
It is unclear why the government continues to champion a model which is not aligned to reality.
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10 Nov 2014 - 9:48am
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Singapore is so unique that we are the only country in the world that would keep talking about increasing wages only if productivity increases, minister without portfolio Lim Swee Say said in one of his most oft-quoted comments.
"You will not find anywhere in the world where a labour movement is such a key advocate for productivity
"But in Singapore we recognise that the wage increase can be sustained only if it's supported over the medium and long term through productivity gains."
Mr Lim is also the secretary-general of the National Trades Union Congress (NTUC).
"If we are not able to achieve a breakthrough in the productivity ladder, the wage ladder and job ladder will be constrained."
However, what Mr Lim said does not sync with the statistics.
Last year, productivity growth actually grounded to a halt – there was zero productivity growth last year.
In fact, the year before, productivity actually fell by 2.6 percent.
Even though there was no productivity growth, the government was still forced to announce revisions to wages for cleaners and security guards because of pressure from the ground.
Earlier this year, the government announced that the basic wage for cleaners will be revised to $1,000 from $850. Last month, it was announced that the basic wage for security guards will be revised from $800 to $1,100 but this will only take effect in 2016, when the real value of the wage is expected to then decline.
The wage revisions were announced as part of the Progressive Wage Model (or ladder) that the NTUC has been championing where workers would only see salary increases if they were promoted. It is thus likely that most cleaners and security guards would be stuck with wages of $1,000 and $1,100, respectively, if they do not get promoted.
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This de facto minimum wages are one of the lowest among the developed countries.
There are several discrepancies with what Mr Lim had said.
First, Singapore has not seen any productivity growth over the past two years. As such, logically, there should not be any wage increases.
The wage increases are thus not due to any productivity growth.
Second, Mr Lim is right to say that no other labour union would tie its workers’ wage growth only to productivity as there are other factors that other unions would look at, such as the increases in the cost of living.
Two years ago, prime minister Lee Hsien Loong announced at the May Day Rally that the government hopes to see productivity growth of 30 percent in the next ten years, so as to see real wage growth of 30 percent over the same period.
However, as productivity has not grown over the past two years, it is clear that the government’s model risks depressing the wages of Singaporeans.
It is unclear why the government continues to champion a model which is not aligned to reality.
