Wages and cost of living relation, what went wrong...
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For many years, the Government has advocated a pro-business environment in Singapore. This is aimed at attracting foreign investors to set up businesses here and create more jobs for Singaporeans.
This strategy has been successful. Singapore has received many international awards for being a competitive economy and a world class workforce.
A hard working, well educated, productive and co-operative workforce is an important contributor to this pro-business environment. This strategy has also benefited many Singaporeans. They have the opportunity to get good jobs at high wages. Many multi-national companies set up their operations in Singapore to serve the Asian region. The demand for talent and for professions in accounting, legal, marketing, business development and other services have contributed to this happy situation.
To cope with the shortage of talent, Singapore has an open door policy to attract professionals and foreign talents to work in Singapore.
Depressed Wages
The open door cannot be restricted only for the talents that are scarce in Singapore. In any case, this type of people has not been defined clearly.
In practice, the open door policy has also been applied to other sectors of the labour force. The demand for workers willing to work for competitive wages extends down the skill ladder.
Although there are controls to ensure a balance of local and foreign workers, they have been difficult to apply in practice. As a consequence, we have an abundance of low wage workers in Singapore. The actual number has not been published. If we look at the people who do not speak like Singaporeans working in the heartlands and in the factories, one can conclude that there must be a large number.
One unfortunate consequence of this influx of foreign workers is the large number of local “mature” workers above 40 years who are unemployed.
Choosy Workers
A common explanation for the large number of unemployed workers is that they are “choosy”. They are not willing to do certain types of outdoor work, especially if they are risky or dirty.
I suspect that it is a question of adequate wages. If the jobs now shunned by Singaporeans pay adequate wages, I believe that many Singaporeans will be willing to do the work.
I have spoken to many taxi drivers who are willing to work 12 hours a day just to earn $2,000 to feed a family.
There are many older Singaporeans who earn less than $800 a month as cleaners or security guards. They have no choice. They have to work or face starvation. Singapore does not provide any welfare.
I do not consider Singaporeans to be “choosy”.
Foreign workers
Employers will prefer to bring in foreign workers, as they are willing to accept any job and work for a low wage, so long as they earn enough to feed a family in their home country, where the cost of living is much lower than Singapore’s. They are usually provided with accommodation near their place of work and can save on the high accommodation and commuting cost.
In contrast, a Singaporean has to earn enough to feed a family in Singapore, with its high cost and standard of living. He has a family and social life in Singapore, he cannot live in a dormitory near his place of work. He has to incur high accommodation and travel costs.
Outsourcing
For many years, the public sector has been a source of employment for many lower educated workers in our society. They work as cleaners and provide a wide range of services in our hospitals, airports and other public services.
They earn a low wage, but it is adequate to feed a family. They are represented by the public sector’s trade unions, which look after their interests.
In recent years, many of these jobs have been outsourced to the private sector. Instead of employing the direct workers, the government agencies have reorganised the work and retrenched the direct workers. They outsource the work to private contractors, to reduce their cost of operation.
A contractor has to submit a low price to win the tender on a contract. The contractors re-employ the retrenched workers at lower wages, to do the same work that they did previously as direct workers. If the local workers are “choosy”, the contractor can find foreign workers willing to work for less.
The contract is for a term of two or three years. On the renewal of the contract, the contract price is likely to reduce further, due to competition. This means even lower wages for the local contract workers.
Adequate salaries
I believe that local workers deserve to have an adequate salary for a hard day’s work. This salary has to be commensurate with the cost of living. It should be adequate for a worker to feed a family, at least in a frugal way. The worker should not be expected to work for 12 hours a day, and still not earn enough for the family.
In some countries, this is achieved through a “minimum wage”. Even America, which is the strongest proponent of a free market economy and a flexible labour force, finds it necessary to have a minimum wage.
Business has to be competitive
It has been argued that competitive wages and a flexible labour market are necessary for business to remain competitive and to stay in Singapore. This argument has been pushed too hard by our leaders. Many Singaporeans accept this argument quite blindly.
Does it really help the country much for the public sector to save a few million dollars a year, by depressing the earnings of the contract workers who were previously the direct workers of the agencies?
If businesses have to pay a more adequate wage to the low income workers, will the businesses become non-viable? I do not think so.
These businesses can reduce the exorbitant earnings of their top directors and managers, or spend less on lavish offices or other business expenses. These businesses may earn less for shareholders, but will probably still find it quite attractive to remain in Singapore.
Pride to be a Singaporean
I believe that more people will be proud to be Singaporean, if they find that the nation looks after their interests and is willing to give them a fair standard of living for a hard day’s work. I hope that the wages of the lower income workers can be increased. This is even more pressing in 2008, due to the high inflation rate. -
Choosy Workers
Just an add-on to your point.
I think the papers are reporting this on a very skewed angle. The other aspect that they fail to address is that those foreign workers who accept lowly-paid jobs come from countries where the cost of living is much lower than ours. So what they do is save the $$$ they earn here, and bring it back home, and they probably can live in their country, a standard of living similar to a person who earns maybe about S$3,000+ here in Singapore.
S$800 is approx $3000+ Renminbi, which is considered a pretty good income in certain parts of China.
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Originally posted by soul_rage:
Choosy Workers
Just an add-on to your point.
I think the papers are reporting this on a very skewed angle. The other aspect that they fail to address is that those foreign workers who accept lowly-paid jobs come from countries where the cost of living is much lower than ours. So what they do is save the $$$ they earn here, and bring it back home, and they probably can live in their country, a standard of living similar to a person who earns maybe about S$3,000+ here in Singapore.
S$800 is approx $3000+ Renminbi, which is considered a pretty good income in certain parts of China.
I emphasize this, let the foreigners do the "choosy" jobs and citizens doing the higher end jobs. It is one of the ways to avoid problems instead of the "fair for all" policy. If u let foreigners do all kinds of jobs including the higher end ones, Soon u will run into turnover and staff retention problems. The cycle is self feeding and it will continue until measures are put into place to address the root cause.
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did u write this yourself? i thought it was very well written ...
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I agree it is a skewed angle, and best is a shallow one. have we seen any intervies , stats or surveys on this? I dont remember seeing one
What is their definition of a choosy job? toilet cleaner, construction worker ect? The citizen population of course, having a higher standard of living will not want to do such jobs , then the government should specifically address this problem and impose restrictive and binding measures on hiring foreigners like what they do in commonwealth countries. In those countries, foreigners are only allowed to do the particular job they are given entry for.
But yet i dont see the relation between competitive wage and minimum wage. How low can a competittive wage go?
Any assumption is a dumb assumption if there is no baseline to do analysis. And how do not make sure that companies dont toy around with wage level fixing?
Till now we dont have any statistics shown to us the relation between economic performance and wages. By far, wages have remained stagnant since the early 90s and its is getting only lower.
The govt argues that maintaining a high population will ensure that business thrive in singapore but it also does not wish to acknowledge the fact that too many people willing to work will drive down wages.
The solution is a minimum wage framework and a competitive leeway using this model will be the most ideal.
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In good time, singapore unemployment rate was only 2.0%, it is only now that there is a recession, so it may goes up to 5.0%. The govt is urging peoples to make changes and take on SPUR programme to upgrade themselves, skill redevelopment is critical for one employment.
As an aging population workforce, we need foreign physical powers and talents to help us grow. Of course those lazy ones will alway said that the govt dun take care of them and give jobs to foreign, but C"mon! nobody earn you a living, even a pros need to market herself for a price.
Like it or not, we must accept that our economy is a globalised one, very flexible yet volatile, one must work his/her way to competite against not just singapore, but the world.
If foreigners will to send back now, more companies will move out, and the result will be more singaporeans will be out of the jobs.
The initiatives of Job credits by govt and effort put in for employing older workers is very much on the agenda of the govt. We therefore, hv to work hand in hand with foreigners, take them as a helper who keep our economy vibrant.
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And the government is not taking into account the social implications of these liberal wage system. it will ruin families, deprive them of necessities like housing and education. And such problems are already disadvantageous regardless if the economy is doing well or not. It i because we are constantly eaning a low wage throughout that we dont have much to fall back on when in times of crisis.
What is happening is a neglect of the problem.
look at the economic crisis now. The goverment has given out fringe benefits to the companies to hire and keep staff but hey who is losing money now, it is the govt. If they had a fixed age, the companies will have to share the burden of the crisis and not just the people. The CEOs and managers have to take pay cuts to keep the workers wages going. it is selfish part of the capitalistic organisations to pay themselves huge sums of money and neglecting their workers. In this case those companies (usually foreign ones) willhave to take industrial responsibility actions to address economic issues. An example of this is done in Australia where there are bargaining agreements being made betweeen the govt sectors, industry as a whole and the private corporation
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i dont see how a minimum wage will affect competitiveness. A minimum wage is designed to ride one during times fo economic crisis and is not meant to compete
Picture this: u own a very good fast laptop and one day it spoils, at least u have a lousier laptop to work on but still offering the basic functions of the faster one.
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Originally posted by Worldlybusinessman:
And the government is not taking into account the social implications of these liberal wage system. it will ruin families, deprive them of necessities like housing and education. And such problems are already disadvantageous regardless if the economy is doing well or not. It i because we are constantly eaning a low wage throughout that we dont have much to fall back on when in times of crisis.
What is happening is a neglect of the problem.
look at the economic crisis now. The goverment has given out fringe benefits to the companies to hire and keep staff but hey who is losing money now, it is the govt. If they had a fixed age, the companies will have to share the burden of the crisis and not just the people. The CEOs and managers have to take pay cuts to keep the workers wages going. it is selfish part of the capitalistic organisations to pay themselves huge sums of money and neglecting their workers. In this case those companies (usually foreign ones) willhave to take industrial responsibility actions to address economic issues. An example of this is done in Australia where there are bargaining agreements being made betweeen the govt sectors, industry as a whole and the private corporation
If u look at minimum wage system in Indonesia, it is a complete diseaster...singapore govt has never favor minimium wage system. As a country base on meritorcracy, wages are base on yr talents/certification, performances and market value.
If u set minimum wages, lots of companies is going to move out.
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Originally posted by angel7030:
If u look at minimum wage system in Indonesia, it is a complete diseaster...singapore govt has never favor minimium wage system. As a country base on meritorcracy, wages are base on yr talents/certification, performances and market value.
If u set minimum wages, lots of companies is going to move out.
Australia has a minimum wage. Companies ar enot moving out from there. Indonesia companies moving out is because of the security and social situation in that country
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Originally posted by Worldlybusinessman:
Australia has a minimum wage. Companies ar enot moving out from there. Indonesia companies moving out is because of the security and social situation in that country
UK, American and other western countries have along since industrialisation adopted minimium wages, they also hv welfare funds, it like a traditional to them, if it is fine with them, so be it. But if you look at them, most of their lower jobs hv gone out the country leaving their low skill workers in dire strait as their minimum wages cannot compete with other countries flexible wages system. So be it, if they set Minimium wages, we gain from it. Without a flexible wages system, companies may survive on the context of good economy, but not in downtime, they simply cannot paid that kind of wages and stay competative.Social unrest in indonesia is partly due to jobless becos of minimium wages, all jobs had gone out.
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Originally posted by angel7030:
UK, American and other western countries have along since industrialisation adopted minimium wages, they also hv welfare funds, it like a traditional to them, if it is fine with them, so be it. But if you look at them, most of their lower jobs hv gone out the country leaving their low skill workers in dire strait as their minimum wages cannot compete with other countries flexible wages system. So be it, if they set Minimium wages, we gain from it. Without a flexible wages system, companies may survive on the context of good economy, but not in downtime, they simply cannot paid that kind of wages and stay competative.Social unrest in indonesia is partly due to jobless becos of minimium wages, all jobs had gone out.
Then adpot a system here during good times min wages is implemented and during bad times a variable wage system.
At least it will help both companies and workers to ride out the ride.
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pap made the laws so that the rich can profit from the miseries of the ignorants, poors and uneducated. well, most of the educated folks are suckers to the PAP propaganda as well.
so what if a person cannot find jobs after 50s, have to work 60hours a week, and face potential issues of getting replaced by FTs, contract some illness in his late 60s due to work exhaustion and mental stress over the past decades.
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Nothing is wrong with the system.
It makes everybody aspire to become ministers.
What's wrong with aiming high?
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Originally posted by Worldlybusinessman:
Then adpot a system here during good times min wages is implemented and during bad times a variable wage system.
At least it will help both companies and workers to ride out the ride.
This is an interesting idea, however implementation is a huge difficulty. Just look at the CPF cut. They cut employers' CPF contribution from 20% to 10% and then take their own sweet time to restore to only 14.5%
Any such flexible policy in our PAP's hand will be biased towards businesses.
However, having this suggestion is better, than completely rejecting an idea.
No offense angel7030, but our education trains out people (including myself) who do not think of alternatives, but reject a notion outright, without thinking of how to adapt an idea so that it becomes more practical. At least this is what Worldbusinessman is doing, rather than just rejecting the minimum wages system outright as being unfeasible.
Remember LKY's statement in the last election. "If you vote in the opposition, Singapore will collapse". Since when did we talk about voting out the PAP altogether? I was thinking more in terms of voting in more opposition to check the PAP's pro-business and arrogant attitude. He had to make our vote become an extreme choice, "either you choose PAP, or you cause Singapore to collapse"
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Originally posted by soul_rage:
This is an interesting idea, however implementation is a huge difficulty. Just look at the CPF cut. They cut employers' CPF contribution from 20% to 10% and then take their own sweet time to restore to only 14.5%
Any such flexible policy in our PAP's hand will be biased towards businesses.
However, having this suggestion is better, than completely rejecting an idea.
No offense angel7030, but our education trains out people (including myself) who do not think of alternatives, but reject a notion outright, without thinking of how to adapt an idea so that it becomes more practical. At least this is what Worldbusinessman is doing, rather than just rejecting the minimum wages system outright as being unfeasible.
Remember LKY's statement in the last election. "If you vote in the opposition, Singapore will collapse". Since when did we talk about voting out the PAP altogether? I was thinking more in terms of voting in more opposition to check the PAP's pro-business and arrogant attitude. He had to make our vote become an extreme choice, "either you choose PAP, or you cause Singapore to collapse"
To them everything is like binary, 1 or 0.
Cannot be anything in between.
Haiz.
And they keep telling people to think out of the box and be creative.
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If u look at minimum wage system in Indonesia, it is a complete diseaster...singapore govt has never favor minimium wage system. As a country base on meritorcracy, wages are base on yr talents/certification, performances and market value.
If u set minimum wages, lots of companies is going to move out.
SSangel,
australia has minimum wage and their economy is not complete disaster where countries like singapore has slip into deep recession.
those countries that set up office or factories in singapore is just here for cheap labour? our labour are never going to be cheaper than thailand, malaysia or china. so what is the pt? minimum wage without the require productivity to show for it is ppintless, that why indonesia failed. setting minimum wage structure will push companies to retrain or upgrade their facilities to increase the productivity of the factory of offices. This will inturn reduce the nos of foreigners needed and thus it is a win win situation for both singapore, employers, and singaporeans!
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Originally posted by charlize:
To them everything is like binary, 1 or 0.
Cannot be anything in between.
Haiz.
And they keep telling people to think out of the box and be creative.
And 1 more thing, our govt likes to threaten us by saying that a minimum wage system will result in a higher cost of living due to the fact that the minimum wage will result in increased costs.
But I have been to Sydney and Melbourne, and seriously, I think these 2 cities' cost of living are not higher than Singapore's.
It's really ridiculous that our PAP comes out with all sorts of excuses just to ensure that they can continue to be pro-business and sacrifice the citizens
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Does australia set this minimum wages across the board ?
A small business or person working for a chicken rice stall also got minimum wage benefit ?
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The basic reason for minimum wage is essentially to ensure that people are making enough to cover their very basic cost of living in terms of food and lodging in that country.
Nobody is asking for $10 an hour minimum wage. Just a reasonable figure that a worker can earn in a month just to survive.
Cost of living in singapore is already starting to get out of hand. You can tell the low skilled workers to keep upgrading to improve on their productivity, but with the extreme open door policy of the government, there is bound to be a foreign worker equally productive that will demand a lower wage than those upgraded workers.
The role of the government should be to balance economic growth with social development. If there is a need to sacrifice a little bit off GDP growth for the sake of social harmony, then be it.
We can't have everything but why create so much misery among the people just to make a few more bucks?
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Originally posted by Ice Dive:
Does australia set this minimum wages across the board ?
A small business or person working for a chicken rice stall also got minimum wage benefit ?
yes, it is across the board for every trade. it is one of the most important policy fundamentals which made Australia thrive as an economy, an attractive destination for workers from all over the globe.
Because Australia beleives in the fair for all, both employer and employees being happy principle. What singapore is believe in is exploitation of the weak which why it is only able to attract workers from under developed countries.
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Originally posted by soul_rage:
And 1 more thing, our govt likes to threaten us by saying that a minimum wage system will result in a higher cost of living due to the fact that the minimum wage will result in increased costs.
But I have been to Sydney and Melbourne, and seriously, I think these 2 cities' cost of living are not higher than Singapore's.
It's really ridiculous that our PAP comes out with all sorts of excuses just to ensure that they can continue to be pro-business and sacrifice the citizens
yes, in Australia things are still going fine. Australia is a very fair place. After taxes u still make 2x more in any job than in singapore. Adn their services have 10% GST. But still they are the same or lower price than in singapore. Why is that their system can thrive and not ours?
Only problem in Australia is the low population. Once this problem is solved, i can guarantee tax levels will do down int he future and it will overtake singapore as the most preferred place to live.
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Originally posted by angel7030:
UK, American and other western countries have along since industrialisation adopted minimium wages, they also hv welfare funds, it like a traditional to them, if it is fine with them, so be it. But if you look at them, most of their lower jobs hv gone out the country leaving their low skill workers in dire strait as their minimum wages cannot compete with other countries flexible wages system. So be it, if they set Minimium wages, we gain from it. Without a flexible wages system, companies may survive on the context of good economy, but not in downtime, they simply cannot paid that kind of wages and stay competative.Social unrest in indonesia is partly due to jobless becos of minimium wages, all jobs had gone out.
Go back to geylang and do your cut and paste from google service. Thank you.
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Originally posted by Worldlybusinessman:
yes, in Australia things are still going fine. Australia is a very fair place. After taxes u still make 2x more in any job than in singapore. Adn their services have 10% GST. But still they are the same or lower price than in singapore. Why is that their system can thrive and not ours?
Only problem in Australia is the low population. Once this problem is solved, i can guarantee tax levels will do down int he future and it will overtake singapore as the most preferred place to live.
Seriously, Australia IS already a preferred place to live, at least for many Singaporeans who finally get so pissed with the govt here, that they emigrate to Australia and finally found out that we are being duped here in this small little well.
I have been there myself, and I love the huge and beautiful country that can be explored endlessly. And like we have mentioned, the cost of living is not any higher than ours. So what is so great about our island, other than our own fear of embracing something new and moving to somewhere to start afresh?
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I'm currently a foreign talent in the US, or what the Singapore government refers to as a "quitter".
I feel that the US system for bringing in foreign talent legally is very fair. It's based on a limited number of work visas issued per year based on what projected shortfalls they have in areas of industry where local talent is insufficient (technology mainly).
Most importantly, when they employ foreign nationals into a job position, there is NO WAGE SUPPRESSION. I'm paid dollar for dollar the same as my US-born counterparts. Therefore, it's absolutely clear that the only motivation for requiring foreign talent is to really fill any voids in key job positions. This makes sure that any foreign talent the US brings in is only of the highest caliber, and you can see this from the fact the ~50% of Silicon Valley companies are formed by foreign nationals.
What the Singapore government is doing appears to be the complete opposite. No doubt, they bring in large numbers of low wage and lowly educated foreign workers for the construction indursty, which is labour intensive, but why do we also see numerous China nationals working in our F&B and service industries? I think Singaporeans are more than willing to take these jobs.
Also, you see many Filipino and China engineers now, but they are paid 60% of what their Singaporean colleagues make. How is that fair?
In addition, why is it also that the majority of education scholarships now provided by the government are earmarked for foreigners only? These are scholarships paid for with Singaporean tax dollars. I've met many a Chinese national here in the US who studied(scholarship) and worked in Singapore for a few years, only to come to the US for graduate school and live here. Singapore has become only a stepping stone for them, and the government should really start trending this statistic.
Enough said, I have to get back to my job as a foregin talent...