~ By Tan Jee Say ~

I am glad Prof Lim has clarified that his "wage shock therapy" is intended to restore half of the wage increase that Singapore workers would have got if not for the "unlimited influx of cheap foreign labour" into Singapore; because of these cheap foreign workers, he estimated that Singapore workers have been underpaid by much more than 100 per cent compared to their counterparts in Hong Kong, Japan or Australia (Low-wage workers here 'underpaid': Lim Chong Yah, TODAY, 17 Apr 2012).

He reminded me of the original wage restructuring policy in 1979 proposed by the National Wages Council which described it as a wage-correction policy; the objective was similar to what Prof Lim now says of his wage shock therapy – to make up for wages lost by Singapore workers to cheap foreign labour brought in by companies. Government ministers and the NTUC fully supported the 1979 wage-correction policy then, but now several ministers and the NTUC secretary general have poured cold water over it, calling it impractical, "unworkable" and even "risky" as large wage increases not followed by productivity growth would "lead to job losses and structural unemployment".

I wonder how they will react now to Prof Lim's clarification – will they continue to object to his proposed wage increases for Singapore workers who had rightly earned these increases for their past contribution but were wrongly denied them by the government-approved influx of cheap foreign labour? Whose interests would they be defending? What kind of a labour leader is it who withholds support for legitimate wage-restoration and demand further productivity growth from workers before such restoration takes place?

Government ministers and the NTUC continue to harp on productivity growth as a driver of wage increase. They have been singing the same tune for the last 30 years or so ( see A Survey of Productivity campaigns in Singapore in last 30 years). But the outcome is a dismal failure with productivity continuing to be stuck in the lows despite all the high-level government committees and high-sounding campaign slogans. Can we expect them to succeed when they have failed so pathetically all these 30 years? Yet they continue to "lecture" Singaporeans about productivity and innovation.

I have said before that I felt Prof Lim's wage shock therapy is too broad and non-discriminatory. I prefer a targeted approach of setting a minimum wage so that our lowest paid can have a decent and dignified living. A minimum wage will reduce the inflow of cheap foreign labour considerably and narrow the income inequality between the rich and the poor. At the same time, we should have a national regeneration plan to create industries and jobs in which Singaporeans can make good use of their skills and education to do well and excel. This will address the concerns of Singaporeans that a minimum wage policy can cause job losses.

But more needs to be done beyond a minimum wage and national regeneration. To improve the quality of life of ordinary Singaporeans, we should strengthen the social safety net such as in healthcare, education, retirement, transport, childcare, family, elderly care. We should also actively review government policy measures in transport, tax (GST) and land pricing policy to ensure that they do not contribute to the increase in the cost of living which will negate the benefit of wage increases. If we succeed in doing all these, we would achieve true restructuring not just of the economy but of the greater society as well.


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