What is productivity?
It is about how a country organises itself. It has everything to do with the government. The proper way to achieve productivity growth is to produce higher value-added goods and services whilst holding the total no. of workers constant.
We hold technology constant (ceterus paribas) too. Technology moves in cycle and it is something we cannot control/time.
The scholars knew what is productivity definitely. Once upon a time, they tried pushing for productivity growth through high value-added hubs. The PAP were promoting the merits of this hub and that hub. Alas, the scholars picked all the wrong hubs except 2 - pharmaceuticals and petrochemicals. Even though these two big-ticket industries are able to skew GDP growth through exports, they are unable to create many meaningful jobs. That's why we use NODX as a measurement. I hereby propose NOPE. Not just non-oil but non-pharmaceuticals domestic exports as well.
Today, the scholars are even cleverer. They try to slow down workers intake whilst keeping GDP growth chugging along, so that productivity will grow - mathematically. It is pure playing with statistics, not genuine growth.
The scholars knew what is economic restructuring too. Once upon a time, they tried to push restructuring using CPF increases. CPF increases are simply wage AND salary increases. It was the most puzzling exercise. It was across the board (applied to everybody including the CEO) which raised the costs of businesses and led to a recession. They should have used Minimum Wage which applied to only the lowest wage workers.
In the last 10 years, the scholars have been singing a different tune about the merits of foreigners. The government imported foreigners to drive GDP growth.
Productivity declined and income inequality grew due to depressed wages.
GDP = Wages + Salaries + Profits + Rents + Interests + Statistical Adjustment.
The only component that didn't grow is wages. When people talk about addressing income inequality, it is about correcting policies that are detrimental to the people. It is robust mainstream Economics. It is not Leftism, Socialism, Welfarism, etc. as insinuated.
The deliberate attempt to bring in foreigners is anti-Economics. Anyone who claims a slow-down in foreign labour will affect Singapore's competitiveness is bullshitting. Our comparative advantage was never in labour-intensive industries.
High costs of living and low wages do not co-exist in Economics. They only happen in Singapore due to the manipulative hand of a government with absolute power, including over the unions.
Workers' and employers' efficiencies will not drive GDP growth in any meaningful way, certainly not 3%. In any case, such kind of efficiencies will lead to either higher unemployment or lower wages. LOL! The unions have been trolling the workers.
Why did productivity soar to above 10% in 2010 and declined thereafter? It was because the government placed $4.5 billion cash in the hands of employers in 2010, causing GDP growth to soar to 15% and of course productivity soared too. It was a one-off spectacular embarassment, not achievement. It is not something meaningful to study or for any discussion.
Labour demand is additive, not addictive. Employers look at total wage bill as a whole. Foreign worker levies increase whereas local wage subsidies decrease total wage bill. So the two policies are conflicting and do not make sense. They have been concocted to appease the employers. The government takes away a lot and gives back a little.
FWL = wages paid by employers - wages received by workers
FWL is wages usurped by the government. It is extreme economic distortion that destroys productivity growth. The bigger the FWL, the bigger the disconnect between wages paid and wages received. If the government, employers and unions accept FWL, there is something very wrong with tripartism.
The Population White Paper will self-shred. Any major economic downturn will create a de-multiplier effect, so big that it could sink Singapore. This is what I meant when I said the higher you climb the harder you fall. The bigger the multiplier, the bigger the de-multiplier also. The $100 billion train system expansion (outdated Keynesian-type of fiscal stimulus to keep PAP in power for the next 5 years) is a fatal mistake that cannot be corrected. It will be perennially loss-making. Even if it were profitable, the government needs 200 years to recover the money. We have not even added in the opportunity costs.
So what is the conclusion? Picking hubs is actually the correct policy. Even though it is very difficult with failures after failures, we should have remained steadfast. There are bound to be one or two winners eventually. But the PAP didn't have the gumption because of it is afraid of losing seats.
We lost one decade of precious time.
Finally, I would like to say something about an island, a capital and a country. The scholars seem to have missed this point repeatedly in their policies despite many people highlighting it. They really must have mental blocks or they disagree. They like to compare Singapore to Tokyo, Boston, London, etc. This is so stupid. Singapore is an island, a capital city and a country all rolled into one. A spider-web MRT system that mimics Tokyo is so wrong. Tokyo is just a city in big Japan. Growing Singapore's populaton to overtake other cities is so silly. Boston, Sydney, London, etc. are just cities within big countries. Even Hong Hong is a city within a big country.
It is about how a country organises itself. It has everything to do with the government. The proper way to achieve productivity growth is to produce higher value-added goods and services whilst holding the total no. of workers constant.
We hold technology constant (ceterus paribas) too. Technology moves in cycle and it is something we cannot control/time.
The scholars knew what is productivity definitely. Once upon a time, they tried pushing for productivity growth through high value-added hubs. The PAP were promoting the merits of this hub and that hub. Alas, the scholars picked all the wrong hubs except 2 - pharmaceuticals and petrochemicals. Even though these two big-ticket industries are able to skew GDP growth through exports, they are unable to create many meaningful jobs. That's why we use NODX as a measurement. I hereby propose NOPE. Not just non-oil but non-pharmaceuticals domestic exports as well.
Today, the scholars are even cleverer. They try to slow down workers intake whilst keeping GDP growth chugging along, so that productivity will grow - mathematically. It is pure playing with statistics, not genuine growth.
The scholars knew what is economic restructuring too. Once upon a time, they tried to push restructuring using CPF increases. CPF increases are simply wage AND salary increases. It was the most puzzling exercise. It was across the board (applied to everybody including the CEO) which raised the costs of businesses and led to a recession. They should have used Minimum Wage which applied to only the lowest wage workers.
In the last 10 years, the scholars have been singing a different tune about the merits of foreigners. The government imported foreigners to drive GDP growth.
Productivity declined and income inequality grew due to depressed wages.
GDP = Wages + Salaries + Profits + Rents + Interests + Statistical Adjustment.
The only component that didn't grow is wages. When people talk about addressing income inequality, it is about correcting policies that are detrimental to the people. It is robust mainstream Economics. It is not Leftism, Socialism, Welfarism, etc. as insinuated.
The deliberate attempt to bring in foreigners is anti-Economics. Anyone who claims a slow-down in foreign labour will affect Singapore's competitiveness is bullshitting. Our comparative advantage was never in labour-intensive industries.
High costs of living and low wages do not co-exist in Economics. They only happen in Singapore due to the manipulative hand of a government with absolute power, including over the unions.
Workers' and employers' efficiencies will not drive GDP growth in any meaningful way, certainly not 3%. In any case, such kind of efficiencies will lead to either higher unemployment or lower wages. LOL! The unions have been trolling the workers.
Why did productivity soar to above 10% in 2010 and declined thereafter? It was because the government placed $4.5 billion cash in the hands of employers in 2010, causing GDP growth to soar to 15% and of course productivity soared too. It was a one-off spectacular embarassment, not achievement. It is not something meaningful to study or for any discussion.
Labour demand is additive, not addictive. Employers look at total wage bill as a whole. Foreign worker levies increase whereas local wage subsidies decrease total wage bill. So the two policies are conflicting and do not make sense. They have been concocted to appease the employers. The government takes away a lot and gives back a little.
FWL = wages paid by employers - wages received by workers
FWL is wages usurped by the government. It is extreme economic distortion that destroys productivity growth. The bigger the FWL, the bigger the disconnect between wages paid and wages received. If the government, employers and unions accept FWL, there is something very wrong with tripartism.
The Population White Paper will self-shred. Any major economic downturn will create a de-multiplier effect, so big that it could sink Singapore. This is what I meant when I said the higher you climb the harder you fall. The bigger the multiplier, the bigger the de-multiplier also. The $100 billion train system expansion (outdated Keynesian-type of fiscal stimulus to keep PAP in power for the next 5 years) is a fatal mistake that cannot be corrected. It will be perennially loss-making. Even if it were profitable, the government needs 200 years to recover the money. We have not even added in the opportunity costs.
So what is the conclusion? Picking hubs is actually the correct policy. Even though it is very difficult with failures after failures, we should have remained steadfast. There are bound to be one or two winners eventually. But the PAP didn't have the gumption because of it is afraid of losing seats.
We lost one decade of precious time.
Finally, I would like to say something about an island, a capital and a country. The scholars seem to have missed this point repeatedly in their policies despite many people highlighting it. They really must have mental blocks or they disagree. They like to compare Singapore to Tokyo, Boston, London, etc. This is so stupid. Singapore is an island, a capital city and a country all rolled into one. A spider-web MRT system that mimics Tokyo is so wrong. Tokyo is just a city in big Japan. Growing Singapore's populaton to overtake other cities is so silly. Boston, Sydney, London, etc. are just cities within big countries. Even Hong Hong is a city within a big country.
