TR EMERITUS

OPINION According to a shocking press release from the U.S. Department of Labor last year, Singapore experienced the steepest  decline in productivity among 17 developed economies in the world in the years 2007 - 2008. Not only that, it had the lowest increase in the hourly compensation per unit labor cost and one of the highest increase in manufacturing unit costs as well. The detailed article was not reported by any major Singapore papers except a brief mention in the Business Times. Neither was it mentioned by Finance Minister Tharman last week which would have greatly embarrassed the PAP government. Steepest productivity decline Among the 17 countries, the Republic of Korea and the United States had the largest increases (1.2 per cent each) while Singapore had the steepest decline (-6.6 per cent): Second highest increase in manufacturing costs Singapore has the second highest increase in manufacturing unit costs when the figures are expressed in national currency units at 7.5per cent after Denmark's 8.3 percent: Lowest increase in hourly wages Hourly compensation in manufacturing increased in 2008 in all 17 economies. The largest increase was in Norway (+ 5.6 percent), followed by Spain (+4.8 percent). Singapore has the lowest increase at only 0.5 percent: Second highest increase in the number of manufacturing hours In 2008 total manufacturing hours worked fell in 9 economies with the greatest decline in the United States at -3.9 per cent. Denmark has the largest increase at +2.7 per cent followed by Singapore at +2.6 per cent as shown by the chart above. Analysis Singapore's dismal performance in labor productivity is a direct result of the PAP's short-sighted liberal immigration and pro-foreigner policies which help companies take the easy way out keeping labor costs down artificially by employing cheap foreign workers instead of investing in innovation and research to boost productivity. As noted in the graph below, Singapore’s labor productivity took a plunge from 2004 onwards when the inflow of foreigners started to pick up: [Source: Kojakbt, 3in1kopitiam forum moderator] This coincided with the beginning of Prime Minister Lee Hsien Loong’s tenure when he announced his ambitious plan to increase Singapore’s population to 6.5 million people by 2030 via immigration. Foreigners now make up more than a third of Singapore's workforce. The proportion is probably higher in the manufacturing which accounts for the low increase in hourly wages and second highest increasing in the number of manfacturing hours. As foreign workers, especially those who are unskilled, are usually poorly trained, they contribute partially to the increase in manufacturing costs. Instead of coming up with a comprehensive policy to reduce Singapore's reliance on foreign workers, boost productivity rates and to safeguard the interests of Singapore workers, the PAP chose the easy way out by opening the floodgates to foreigners which temporarily help to keep labor costs low and keep the GDP growth figures artificially high. (An unknown percentage of the PAP ministers' multi-million salaries is pegged to GDP growth - the higher the figure, the more money they bring home.) The few measures put in place such as the foreign worker levy and dependency ratio hardly deter companies from hiring foreign workers. It doesn't help that Singapore has an extremely lax criteria for PR application. The Home Affairs Ministry revealed last year that two out of every three PR applicants are successful, an astonishing high rate for a developed nation. The Professionals/Technical Personnel & Skilled Worker scheme (or simply PTS scheme) is the easiest and most assured route to Singapore PR. It's estimated that more than 90% of the people obtain their Singapore Permanent Residence through this scheme. The key requirement under this scheme is that a foreign worker must be working in Singapore for at least six months on either an Employment Pass, Entrepreneur Pass, or S Pass. Since the dependency ratio lumps both citizens and PRs as "resident" workforce, a company can circumvent the rules by simply getting earlier arrivals of foreign workers to apply for PRs and transferring them into the "resident" pool, thereby freeing up slots to employ more foreigners. Theoretically, it is therefore possible for a company based in Singapore to employ 100 per cent foreigners with no Singapore citizens on its payroll. The foreign worker levies for various types of visas are also ridiculously low, amounting to no more than a couple of ten of dollars. Even with the recent hike in foreign worker levy, it is still more "profitable" for companies to employ foreigners as they do not have to pay them CPF. Besides, the slightly increased labor costs can be easily transferred to the workers and consumers. The PAP government has to accept full responsibility for Singapore's low productivity rate. Prime Minister Lee Hsien Loong now wants to increase Singapore's productivity to 3 per cent per annum. How is this possible when our productivity rate has been decreaasing for the last three years with the largest dip of 6.6 per cent in 2008? DPM Teo Chee Hean still got the cheek to give himself a pat on his back by praising the "progress" made by previous productivity drives: “We have made good progress in the past in our productivity drive and that is why we have been able to move our economy forward and have good jobs for many Singaporeans. But this is a constant effort and we have to renew and re-double our efforts,” he was quoted as saying in Channel News Asia on 28 February 2010. What "progress" is DPM Teo referring to when Singapore's productivity has grown by only 0.7 per cent in the last decade? What "good jobs" did the PAP create for Singaporeans when they have to compete with directly with foreigners who cost much less than them? Does he know what he is talking about? Can Singaporeans trust him to chair the National Productivity and Continuing Education Council to spear-head Singapore's productivity drive as outlined in the Budget? The crux of the problem lies in Singapore's export-based economy and its perennial addiction to foreign labor, compounded by the fact that it still has not managed to make a successful transition from a manufacturing to knowledge-based economy. Unless Singapore's structural and political economy is completely revamped, there is no way Singapore can ever hope to boost its productivity, let alone increase the wages and decrease the working hours of its long-suffering workers which will lead to other social problems such as low birth rates, exodus of local talents to greener pastures overseas and an eventual erosion and loss of national identity. The PAP should realize that it is the biggest stumbling block to reforming Singapore's obsolete, uncompetitive and monopolistic state-capitalist economic system. We are doomed to mediocrity so long it refuses to relinquish its tight-fisted control over Singapore's economy and allows the private sector to grow and flourish independently. Related articles: 1. How PAP screws up Singapore's labor productivity by opening its doors to foreign workers 2. The Singapore Way 3. DPM Teo Chee Hean praises Singapore government for progress made in past productivity drives References: 1. Bureau of Labor Statistics, U.S. Department of Labor 2. Guide me Singapore  Read More →

Written by Our Correspondent Workers' MP Low Thia Kiang shed his inhibition and went for the jugular during a parliamentary session yesterday with harsh criticisms of the ruling party's liberal immigration and pro-foreigner policies which have brought untold hardships and sufferings among ordinary Singaporeans. Contrary to what was said by Finance Minister Tharman in his Budget speech earlier that the wages of Singapore workers have grown over the last few years, Mr Low felt that the low-wage earners are left behind: "When the Workfare Income Supplement (WIS) has to be revised upward and the qualifying monthly income limit increased to $1,700 to ensure low-wage earners are not left behind in our foreigner-dependent economy, doesn't that raise an alarm in the Government about the meagre salary our low-wage workers are getting? 'The growth strategy... for the past 10 years has definitely not made these Singaporean workers feel any sense of progress with the nation," he was quoted as saying in the Straits Times. He blamed the government for opening the floodgates to foreign workers which provides few incentives for companies to boost their productivity: "It is easy to blame our local workforce for low productivity but who opened the gates to allow foreign workers to flood the labour market in the first place? Easy access to cheap foreign labour offers little incentive for companies to up their productivity... The Government has to assume some responsibility for the low productivity in the last decade" he said. According to a recent Wall Street Journal, the relentless influx of foreign workers has depressed the wages of Singapore workers, increased the cost of living, especially that of public housing, decreased labor productivity and led to an overall decline in the standards of living. Foreigners now made up 36 per cent of Singapore's population, up from 14 per cent in 1990. Of the remaining 64 percent who are citizens, an increasing number are born overseas. Mr Low also urged the PAP to take 'bold step' to scrap the foreign workers levy completely and use the dependency ratio to manage the growth of foreign workers in Singapore. "Based on reports that there are about 856,000 work permit holders in Singapore as at December - excluding the 196,000 domestic helpers -  a $10 to $30 monthly increase in levy would bring in an additional $79 million to $238 million per year for the Government. And using the low end of the work permit levy, which is $150 a month, the Government is taking in about $1.2 billion a year from this payment," he added. Mr Low opined that the hike in foreign worker levy will not affect large companies and "'this whole exercise could just end up fattening the Government's coffer with little results to show in controlling the ever-expanding foreign workforce." As expected, Mr Low's comments brought a barrage of criticisms from the PAP MPs who dominate parliament. Ms Josephine Teo (Bishan-Toa Payoh GRC) claimed that foreign workers will be cheaper without the levies: "Without the levies, foreign workers are even cheaper and even more attractive to businesses. And some of these businesses will find loopholes to get round the quotas, to get more of the cheaper foreign workers," she said. However, she ignored the fact that Mr Low had already suggested refining the dependency ratio to control the inflow of foreign workers. Ms Irene Ng (Tampines GRC) added that "any move to tighten the dependency ratio as a way to raise workers' wages could also lead to higher cost of living for consumers." She forgot that there is a limit to which companies can raise the prices without losing their clients. At the end of the day, the onus is on them to find ways to boost productivity while keeping prices low at the same time. It is evident that the PAP's growth strategy for the past few years has disastrous consequences for the low income earners in Singapore whose wages had remained stagnant. In fact, Singapore now has the largest income gap between the rich and the poor among the thirty most developed economies after Hong Kong. With no opposition in parliament to check on the PAP, Singaporeans will have little choice but to be led by them through the noses like a flock of "sheep".  Read More →

Written by Our Correspondent For those of you who are disgusted by the PAP MPs singing in unison in support of Budget 2010, let us recap the infamous quotes made by some of them 3 years back on Budget 2007, courtesy of Mr Brown: 10. Ms Irene Ng (Tampines GRC): “incredibly generous” 9. Mr Hri Kumar (Bishan-Toa Payoh GRC): “Comprehensive and forward-looking” 8. Dr Ahmad Mohammed Magad (Pasir Ris-Punggol GRC): “Inclusive and a landmark budget” 7. Madam Ho Geok Choo (West Coast GRC): “(Workfare is) Pragmatic, innovative and exemplary” 6. Mr Wee Siew Kim (Ang Mo Kio GRC): called Budget 2007 “generous” and “forward-looking” 5. Dr Amy Khor (Hong Kah GRC): “Good intentioned” and “Made in Heaven” 4. Mr Ong Ah Heng (Nee Soon Central): Said that the generosity of the recent budget is possible under the stewardship of the ruling People’s Action Party. 3. Mr Inderjit Singh (Ang Mo Kio GRC): “This is one of the best, if not the best budgets, I have seen.” and “Wonderful” 2. Ms Lee Bee Wah (Ang Mo Kio GRC): “Pang sai ka che jamban” (Want to take a dump then look for toilet). 1. Dr Fatimah Lateef (Marine Parade GRC): “Let me share with her that nowhere else in the world can you get a Budget which includes love and compassion in abundance as this one.” Where are we now after the "generous", "wonderful", "inclusive" and "made in heaven" Budget of 2007? Are we better off now or are we still stuck in the same s**thole? While the median wages of Singapore workers have barely increased in the last three years, the cost of living has more than doubled, especially that of public housing, all thanks to the PAP's mismanagement of the economy. Till today, the PAP MPs are still ignorant of the crux of the problem and continue sing the same old tune. Singaporeans should wake up from the fact that there is nothing the PAP MPs can do for them in parliament. No matter how hard they argue or fight, they cannot go against the party's wishes because of the party whip. More than often not, the policies are formulated and implemented hastily by a core group of leaders (we know who they are) within the party. The PAP MPs are only allowed to "debate" in parliament to put a "wayang" for all to see, but they have no power to effect any fundamental changes in the policies. The liberal immigration and pro-foreigner policies were implemented without due consideration or planning. Since when did we hear a debate in parliament on the matter? Singaporeans must vote wisely in the next election. We need a strong opposition in parliament to keep the PAP in check. We must have proper debate on all national policies before the bills are passed. We cannot give the PAP another blank cheque to govern the nation without any accountability, responsibility or transparency. For those of you who are still undecided, please recall Lee Kuan Yew's famous quote: “To be the prime minister, you don’t have to know every instrument, but you got to recognise, ah, he’s a good violinist, he’ll be the first violinist, he’ll be the double bass. He will play the viola, he will have the trumpet, he will do the drums. Then you coordinate them and then you have great music. And if you already have a great orchestra, you can put a dummy there and you still got great music.” [Source: Channel News Asia, 5 March 2008] Why cast your vote for a dummy MP who is simply there to fill the empty places? Is it worth taxpayers' monies to pay him/her $13,000 a month to sing in tune to his party's "orchestra"? Do you want to see the PAP MPs regurgitating the same rubbish three years later on Budget 2013 when your wages and standard of living continue to drop? You have only one last chance in the next election to make a real difference to your destiny: VOTE FOR CHANGE, VOTE OUT THE PAP!!!  Read More →