The never ending story of low productivity?

By Leong Sze Hian

I refer to the article "Productivity rates a matter of concern" (Straits Times, Sep 13).

It states that

"Last year, labour productivity here grew by an average of 1 per cent over the year, but shrunk by 0.5 per cent in the last quarter. In the first three months of this year, it continued the downward trend, shrinking by 2.2 per cent.

… the low productivity growth rates over the past 11/2 years is a matter of concern".

 

Still wages can only increase with productivity?

So, as the consistent rhetoric has been that wages can only go up with productivity increase, what is going to happen to wages, on top of inflation that is now running at five per cent?

Why is it that after spending so much money, effort and emphasis on productivity – it does not seem to be working?

 

Why low productivity?

Perhaps the answer may lie in some other recent statistics that may give us some clues.

 

Foreign workers

Although 30 per cent of Employment Pass (EP) and S-Pass applicants were rejected as at end July this year, up from last year’s total rejection figure of 26 per cent, we do not know whether the number has increased.

In any case, the approval of 7 out of 10 applications may continue to put pressure against Singaporeans by way of competition for jobs and wage levels.

If you are living in constant fear of losing your job to a foreigner who is prepared to work for lower pay and do not have National Service obligations, and your pay continues to languish for years or decline, how can you be expected to be motivated and productive?

 

Wages

In this connection, real median wage growth was negative in 2011, 2009 and 2008, and only increased by 0.5 per cent in 2010, and is expected to be negative again this year.

The Workforce Development Agency (WDA) has launched a new initiative to help security firms to recruit housewives and retirees. They will be trained to work part-time for six to eight hours of work each day, up to six days a week, and they can expect to earn between $600 and $800 a month, which works out to only about $4 an hour.

If more Singaporeans are being encouraged to be trained to work for such low wages, how can they be motivated and productive?

 

Foreigners

The rate of change of growth in foreigners increased by 83% (73,600 increase in the 6 months from June 2011 to December 2011 compared to the 80,400 increase in the 12 months from June 2010 to June 2011) on an annualised basis at the current rate of growth.

If most of these foreigners are competing with Singaporeans for jobs and wages, how can we be motivated and productive?

 

Social spending

Prime Minister Lee Hsien Loong said in his Aug 26 National Day Rally speech, “nothing falls from heaven”. So taxes will have to go up eventually to fund higher social expenditures – “not immediately” but within the next 20 years.

Despite this consistent rhetoric, social spending has not increased significantly, relative to the Budget revenue in recent years.

For example, public spending on healthcare last year at 1.6 per cent of GDP, is one of the lowest in the world.

If you are worried that you may not be able to pay for healthcare costs if your family members fall sick, how can you be motivated and productive?

 

Jobs

At the current increased job placement number of 6,200 for the first two quarters of this year, does it mean that the total for the year may be around 12,400?

This may appear to be lower than last year’s job placement statistics, as according to the Department of Statistics’ Monthly Digest of Statistics Singapore June 2012, job seekers attended to by the CDCs and e2i, was 99,608 and 100,504, in 2010 and 2011, respectively, and job seekers placed in employment was 17,732 and 14,223, respectively.

This works out to a declining placement rate of 18 and 14 per cent, respectively.

So, what is the job placement rate for the first half of this year?

If it appears that it may be harder to get a job, how can you be motivated and productive?

Financial assistance

Since the five CDCs received some 15,000 applications for social assistance from April to June this year, which is a nearly six per cent increase compared to the same quarter last year, does it mean that the total applications in a year may be around 60,000?

As these are new applications, if we add to them those who are already receiving assistance, how many needy families are there in total?

In this connection, the number of households on short and medium term assistance has increased by a whopping 81% from 5,471 a year ago to 9,911 now.

If as it appears that more people are finding it hard to make ends meet and have to apply for financial assistance, how can we be motivated and productive?

I can go on and on with more statistics, but I would like to suggest that you look around you every day and talk to people to feel the stresses in Singapore and ask the question – How can Singaporeans be motivated and be expected to be more productive?

 

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