- Joined
- Dec 30, 2010
- Messages
- 12,730
- Points
- 113
One of the particularly bad schemes implemented by the PAP that will cause our current problems to be entrenched is Workfare. On the surface it looks like money given to lowly paid workers to keep their heads above water. However, it is actually a subsidy for businesses using cheap labor - business don't pay workers enough for basic living and the govt steps in to make up the difference. Workfare creates no incentive for businesses to improve productivity because it encourages businesses to use cheap labor by subsidizing their wage bill. Workfare traps workers in menial jobs and perpetuates the current state of affairs because the PAP uses this scheme to justify not doing more to break out of the low wage and low productivity cycle.
If we want to break out of this vicious cycle, there is no choice now but to take some risk using wage intervention approaches. One way to do it is set a minimum wage and raise it every year until it reaches living wage level at the same time restricting the access to cheap foreign labor. The rate at which we do it depends on how much time we believe we have to solve this problem of income inequality. Professor Lim recommends a "shock" approach (50% increase in wages low income earners in 3 years) to snap us out of this vicious cycle because he sees Singapore nearly reaching a dangerous situation unless we do something. The PAP on the other hand has gone on a completely separate direction - they seem to think that they have all the time in the world to get this fixed favoring approaches that are so gradual they hardly moves us away from the status quo.
- http://singaporemind.blogspot.com/2012/04/breaking-out-from-cycle-of-cheap-labor.html
If we want to break out of this vicious cycle, there is no choice now but to take some risk using wage intervention approaches. One way to do it is set a minimum wage and raise it every year until it reaches living wage level at the same time restricting the access to cheap foreign labor. The rate at which we do it depends on how much time we believe we have to solve this problem of income inequality. Professor Lim recommends a "shock" approach (50% increase in wages low income earners in 3 years) to snap us out of this vicious cycle because he sees Singapore nearly reaching a dangerous situation unless we do something. The PAP on the other hand has gone on a completely separate direction - they seem to think that they have all the time in the world to get this fixed favoring approaches that are so gradual they hardly moves us away from the status quo.
- http://singaporemind.blogspot.com/2012/04/breaking-out-from-cycle-of-cheap-labor.html
