100% less than their productivity contribution is an underestimation - Prof Lim

[Confuseous]

The perfectly understandable argument is that remuneration increase must be according to productivity growth. My position, however, is that our lowly‐paid workers have been underpaid by much more than 100% of their pay when compared with their counterparts in countries with comparable national affluence like Hong Kong, Japan or Australia. Even if we compare our position with countries with much lower per capita income like South Korea or Taiwan, our lowest paid workers have been grossly underpaid. My thesis is that the gross underpayment is consequent on the unlimited influx of cheap foreign labour to Singapore. In 1991, our nonresident
labour force was 300,800.This shot up to 686,200 in 2001 and to 1,157,000 in 2011. Of this foreign labour population, only 1.7% earned high enough that they are legally obliged topay income tax. Do we need a wage shock‐therapy, or ERII?

My assumption that they are paid 100% less than their productivity contribution is an underestimation. So, if over three years, their pay has gone up by an accumulated rate of 50%, they will still be paid 50% less at the end of the restructuring period of three years. In other words, we should pay them according to their productivity contribution, or at least a larger portion of their real productivity contribution.

Now, it should be pointed out in this connection that our wage/GDP ratio is one of the lowest in the world.

- http://theonlinecitizen.com/2012/04/prof-lim-clarifies-on-economic-restructuring-ii-erii/