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And yet, the prime minister’s rejoinder to economist’s Lim Chong Yah’s idea to raise the wages of low-income workers by 50 percent over three years, was to link the wages of lower-level workers to productivity gains.
But I do not agree with his drastic approach because the only realistic way to lift their wages is step by step, with wages and productivity going up in tandem together as fast as we can but as fast as it is possible.
– Lee Hsien Loong, speech, 1 May 2012
It seems to me to be one of those easy answers that beguile.
Firstly, how many companies measure productivity? Mostly, they are concerned with profitability. Few companies systematically collect the necessary data to track productivity. But since wages are determined at the company level and not with reference to national accounts, how does one expect companies to adjust wages in line with productivity when they have no consistent measure of it?
Secondly, even if a company tracks productivity of each profit centre or cost centre, it makes a poor fit with the issue of the day: the low, low wages of low-skill workers. Typically, a profit centre or cost centre comprises a team of managers, supervisors, technical experts and maybe general labour. There is no separate measurement for the productivity contribution of low-wage workers for the simple reason that it is very hard to tease out their contribution versus that from more senior ranks.
In other words, Lee’s words may seem like a sensible solution, but there is no practical way to operationalise it across the myriad of firms, large and small.
- http://yawningbread.wordpress.com/2...y-wages-arent-determined-by-wishful-thinking/
But I do not agree with his drastic approach because the only realistic way to lift their wages is step by step, with wages and productivity going up in tandem together as fast as we can but as fast as it is possible.
– Lee Hsien Loong, speech, 1 May 2012
It seems to me to be one of those easy answers that beguile.
Firstly, how many companies measure productivity? Mostly, they are concerned with profitability. Few companies systematically collect the necessary data to track productivity. But since wages are determined at the company level and not with reference to national accounts, how does one expect companies to adjust wages in line with productivity when they have no consistent measure of it?
Secondly, even if a company tracks productivity of each profit centre or cost centre, it makes a poor fit with the issue of the day: the low, low wages of low-skill workers. Typically, a profit centre or cost centre comprises a team of managers, supervisors, technical experts and maybe general labour. There is no separate measurement for the productivity contribution of low-wage workers for the simple reason that it is very hard to tease out their contribution versus that from more senior ranks.
In other words, Lee’s words may seem like a sensible solution, but there is no practical way to operationalise it across the myriad of firms, large and small.
- http://yawningbread.wordpress.com/2...y-wages-arent-determined-by-wishful-thinking/
