Netizens cynical over attribution of high wages to recession of economy

According to Reuters, the trouble in the country is that the higher wages are raising business costs at a time when export-oriented Singapore has been hard hit by a cooling China, subdued domestic consumption, a downturn in commodities and global uncertainty due to Britain’s vote to leave the European Union.

Currently, analysts say the wage-cost pressures are flashing warnings of a recession, while the city state’s economy is expected to grow between 1-2 percent for the year.

At roughly 43 percent of gross domestic product – though below the 55 percent world average – wage costs in Singapore are now at levels which historically had preceded recessions in 1985, 1997 and 2001.

SaladStop owner Adrien Desbaillets whose outlets chains are spread in Singapore, Manila, and Tokyo said that the high wage of the employees in Singapore has reduced the profit he gains. He said that he needs to pay S$1,600-S$3,200 for his Singapore staffs compared to S$300-S$400 in Manila.

The government data shows that almost 42,000 businesses ceased in the first half of this year compared to 49,000 businesses in the whole of 2015.

Over the past decade, total nominal wages rose to 4.6 percent per year on average, compared with a 0.5 percent average annual growth rate of value-added per worker in that period.

And recent data showed the unit labour cost index hitting a record high of 116.7 in the second quarter.

“Singapore is the fourth most expensive city in the world, according to Mercer, a global consultancy. The high wages partly reflect that. But they would have been lower without the curbs on foreign workers introduced in 2011 amid disquiet over immigration,” Reuters said.

However, netizens are cynical towards this idea that high wages are the main reason for concerns, voicing that wages for middle income earners have remained stagnant for years while rent and other costs contribute to most of the cost increase faced by businesses in Singapore.

Some posted their views on the Facebook page of local media publications. Here are some of the comments netizens made :

  • “Seriously, why don’t straits times blame the high rental cost for businesses to cease operations? So you expect Singaporeans to get $300-$400 pay a month to be competitive with Philippines? Well, why don’t govt lower the cost of living to be the same as Philippines first? Oh ya, and all Singaporean children don’t need to pay so much tuition to universities because we are all going to get paid manual labour rates,” said Xin Yi Liau.
  • Brian Chee wrote, “High wages? Yap only apply to those in top positions, i feel many in the middle and bottom tier of the work force have not had a decent pay increment for quite a period.”
  • “Straits Times is foreseeing Singapore is heading into recession, but quoting high wages as the main reason are baseless. Why not dare to blame the government for poor foresight and wrong economic policies? Why not blame our biggest landlord for causing skyrocketed rental? Why not blame the government controlled companies dominating and controlling the local markets? Why bringing in so many foreigners to squeeze out our own local workforce?” asked Wilson Toh.
  • “How can he compare Singapore wages to Philippines. We are two different cities with living standards. This guy just wants high profits and low paying staffs. Typical of a corporation goes where is cheap,” Serene Chiu commented.
  • This report is as illogical as it gets. Let’s break down the cost of retail, f&b business in Singapore: rental, employees’ wages, cost of imports, raw materials etc and other misc cost.. Are you seriously telling me wages is the problem?
    And if you believe lower wages is the solution:- Low wage with high cost of living will translate to low consumer spending power which will in turn hit the retail/ F&B business.. Or are these business depending on tourists’ money? The SGD is very strong now which makes it expensive for tourists to visit. There are many factors on why retail business is not doing well in Singapore, such one-sided reporting from ST is immature and disappointing,” said Sammie Yeo.
  • John FC wrote, “High rental profit feed MNC and politicians. Citizens are just profit making tools for the government. Most Singaporeans don’t have pay rise for many years. struggling everyday.”
  • “High wages? Erm Politicians got million pay plus pension if in politics long enough. Can we cut that too. When citizen pensions are taken out then why should Politicians have pensions? Lead by example please,” said Ikiro Ong.
  • Sangha Vandhana said, “You call that high, not enough to cover core inflation with Singapore high cost of living and for these, you cannot compare Singapore with Philippine wage. To say that you must as well compare Singapore wage with US and Europe which are higher than Singapore.”
  • ShaoWei Li wrote, “It really signals that Singapore is getting too expensive. We need to bring the overall cost for raw materials, housing, cars, shop rental etc down. Only then we feel less pressured to ask for more salary. However, aren’t our ministers paid in the millions? I think a multiplier based on the lowest paid is more effective.”
  • “The real culprit of high costs of running businesses is exorbitant rental costs. Landlords are given freehand in earning high yields. It sure is nice to be a landlord in Singapore,” wrote Raymond Fong.
  • Micheal Pua wrote, “Singapore is losing its global competitiveness. We have peaked.
    Other developing countries are catching up fast on the back of Internet proliferation. Information and knowledge nowadays is as good as free.
    Our current generation of pampered youths with their sense of entitlement is not helping.
    We have neglected to safeguard Singapore’s ONLY resource, it’s workforce’s renown quality and resilience.
    If this generation wants to take it easy, then the next generation will suffer.
    We must be more aware of world developments and stop taking things for granted.
    Our ego and complacency is now starting to hurt us.
    Remember that no matter whether FTs are in SG or Singaporeans are working abroad, we all compete on a global stage. The boundaries are breaking down fast all over the world and there is nothing we can do except educate and innovate.
    Resources are dwindling and world population still growing, how to take it easy?”
  • James Killingsworth wrote, “So the ST is blaming the problems of the economy on the people who are hurting the most – the average Singaporean? I’m glad you the paper is not in control of economic policy. I mean, let’s not write a balanced article that also factors the unjustifiable high cost of rent.”
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