<TABLE id=msgUN cellSpacing=3 cellPadding=0 width="100%" border=0><TBODY><TR><TD id=msgUNsubj vAlign=top>
Coffeeshop Chit Chat - LuckyTan: Not by wages alone...</TD><TD id=msgunetc noWrap align=right>
Subscribe </TD></TR></TBODY></TABLE><TABLE class=msgtable cellSpacing=0 cellPadding=0 width="96%"><TBODY><TR><TD class=msg vAlign=top><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR class=msghead><TD class=msgbfr1 width="1%"> </TD><TD><TABLE cellSpacing=0 cellPadding=0 border=0><TBODY><TR class=msghead><TD class=msgF noWrap align=right width="1%">From: </TD><TD class=msgFname noWrap width="68%">Lola (Langusta) <NOBR></NOBR> </TD><TD class=msgDate noWrap align=right width="30%">4:52 am </TD></TR><TR class=msghead><TD class=msgT noWrap align=right width="1%" height=20>To: </TD><TD class=msgTname noWrap width="68%">ALL <NOBR></NOBR></TD><TD class=msgNum noWrap align=right> (1 of 8) </TD></TR></TBODY></TABLE></TD></TR><TR><TD class=msgleft width="1%" rowSpan=4> </TD><TD class=wintiny noWrap align=right>8722.1 </TD></TR><TR><TD height=8></TD></TR><TR><TD class=msgtxt>Saturday, March 07, 2009
<!-- Begin .post -->Not by wages alone...
A few weeks ago there was this letter[Link] to the Straits Times Forum by former perm sec Ngiam Tong Dow arguing that a CPF cut would be a better strategic move than the Jobs Credit Scheme (JCS). He argued that a direct wage cut would be better than a wage subsidy because "subsidies cannot be sustained for long if our workers are no longer as productive as their peers in other, perhaps hungrier, countries, particularly in a knowledge-based global economy". He argued workers should bite the bullet like they did in 1984 take all the pain and sacrifice to get Singapore out of its current mess. I'm not sure what is so strategic or long term about CPF cuts - the CPF is suppose to be a provident fund for our retirement not an economic tool to bail the economy out everytime there is a recession. Why didn't he propose that landlords slash rents by 40% to help make the economy more competitive? That was what many retailers wanted[link] Why didn't he propose that other costs such as utilities, govt fees, etc be slashed to make Singapore more competitive? Why is it wages ...wages and always wages? A CPF cut is 'undoable' for several reasons - the HDB default is 8% going into this recession and a CPF cut will push many Singaporeans to the 'brink'...we are not talking about just taking 'pain' it will be agony. We are also going into this recession with the highest income gap in our history and the govt is already giving workfare which is a form of wage subsidy out of necessity. There are also many flexi-wage components in our wages today that can be cut by the employers if they choose to do so. Also, if wages are the issue and the businesses need those cuts to retain people, the employer can just initiate wages cut himself. Politically if the PAP is going for elections such a move is completely unwise because many Singaporeans are still waiting for the 'temporary' CPF cuts of 1984 to be restored...and this will be bad political strategy. For a while, I was quite amazed that Ngiam Tong Dow, a former top civil servant, can actually come up with such a suggestion. But the PAP govt itself did not miss this idea because when Minister Lim Swee Say debated MP Low in parliament he tried to counter Low by asking "CPF cut or JCS?"...which would Low prefer? MP Low said neither. Many saw this whole episode as Minister Lim trying to trick MP Low and MP Low not falling for it. I believe Minister Lim was more honest than that. I believe the PAP govt confronted with the current slump saw only 2 options which are 2 ways to do the same thing - cut wage bills of companies. There appears to be a box that the govt is thinking within...I will attempt to identify this box.
Think hard. Where are we today actually? This is our 3rd recession in 10 years! This is Australia's 1st recession in 25 years (hmmm....do we blame people for wanting to migrate there?). When Ngiam wrote that we should cut CPF to be more competitive, what is this economic contest ordinary Singaporeans have signed up for? Is this a slimming contest with a buffet voucher for winners?...Or is it a slimming contest that allows you join another slimming contest if you survive the 1st one? 3 recessions within a decade.... I think Singaporeans will begin to ask fundamental questions about our economy and the old bureaurcat's solution to apply the same old formula to cut CPF and to fight the pain with more pain only serve to remind us how far down the tunnel we have gone applying old formula to grow our economy. Keep wages low relative to productivity, get foreign direct investments and export....and they kept applying this formula as income gaps ballooned and the ordinary Singaporean households become strain due to the rising cost of living. Wages were the only thing they kept low as housing, transport, etc were continuously raised. When wages were not low enough, the PAP govt open the floodgates to foreign workers who came by the hundreds of thousands. We ended up with an income distribution that is only found in 3rd world countries, an economy that was so reliant on export it became the 1st one in Asia to go into recession and right now is the fastest deteriorating economy in the region. Think about it ....if we keep applying this old tired formula, where will we be 2 decades from now? What would life be like for you and your children?! Lets take a step back...and see what is going on.
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>
<!-- Begin .post -->Not by wages alone...
A few weeks ago there was this letter[Link] to the Straits Times Forum by former perm sec Ngiam Tong Dow arguing that a CPF cut would be a better strategic move than the Jobs Credit Scheme (JCS). He argued that a direct wage cut would be better than a wage subsidy because "subsidies cannot be sustained for long if our workers are no longer as productive as their peers in other, perhaps hungrier, countries, particularly in a knowledge-based global economy". He argued workers should bite the bullet like they did in 1984 take all the pain and sacrifice to get Singapore out of its current mess. I'm not sure what is so strategic or long term about CPF cuts - the CPF is suppose to be a provident fund for our retirement not an economic tool to bail the economy out everytime there is a recession. Why didn't he propose that landlords slash rents by 40% to help make the economy more competitive? That was what many retailers wanted[link] Why didn't he propose that other costs such as utilities, govt fees, etc be slashed to make Singapore more competitive? Why is it wages ...wages and always wages? A CPF cut is 'undoable' for several reasons - the HDB default is 8% going into this recession and a CPF cut will push many Singaporeans to the 'brink'...we are not talking about just taking 'pain' it will be agony. We are also going into this recession with the highest income gap in our history and the govt is already giving workfare which is a form of wage subsidy out of necessity. There are also many flexi-wage components in our wages today that can be cut by the employers if they choose to do so. Also, if wages are the issue and the businesses need those cuts to retain people, the employer can just initiate wages cut himself. Politically if the PAP is going for elections such a move is completely unwise because many Singaporeans are still waiting for the 'temporary' CPF cuts of 1984 to be restored...and this will be bad political strategy. For a while, I was quite amazed that Ngiam Tong Dow, a former top civil servant, can actually come up with such a suggestion. But the PAP govt itself did not miss this idea because when Minister Lim Swee Say debated MP Low in parliament he tried to counter Low by asking "CPF cut or JCS?"...which would Low prefer? MP Low said neither. Many saw this whole episode as Minister Lim trying to trick MP Low and MP Low not falling for it. I believe Minister Lim was more honest than that. I believe the PAP govt confronted with the current slump saw only 2 options which are 2 ways to do the same thing - cut wage bills of companies. There appears to be a box that the govt is thinking within...I will attempt to identify this box.
Think hard. Where are we today actually? This is our 3rd recession in 10 years! This is Australia's 1st recession in 25 years (hmmm....do we blame people for wanting to migrate there?). When Ngiam wrote that we should cut CPF to be more competitive, what is this economic contest ordinary Singaporeans have signed up for? Is this a slimming contest with a buffet voucher for winners?...Or is it a slimming contest that allows you join another slimming contest if you survive the 1st one? 3 recessions within a decade.... I think Singaporeans will begin to ask fundamental questions about our economy and the old bureaurcat's solution to apply the same old formula to cut CPF and to fight the pain with more pain only serve to remind us how far down the tunnel we have gone applying old formula to grow our economy. Keep wages low relative to productivity, get foreign direct investments and export....and they kept applying this formula as income gaps ballooned and the ordinary Singaporean households become strain due to the rising cost of living. Wages were the only thing they kept low as housing, transport, etc were continuously raised. When wages were not low enough, the PAP govt open the floodgates to foreign workers who came by the hundreds of thousands. We ended up with an income distribution that is only found in 3rd world countries, an economy that was so reliant on export it became the 1st one in Asia to go into recession and right now is the fastest deteriorating economy in the region. Think about it ....if we keep applying this old tired formula, where will we be 2 decades from now? What would life be like for you and your children?! Lets take a step back...and see what is going on.
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>
