TR EMERITUS

This week there has been a lot of debate about the advisability of implementing a minimum wage in Singapore. Manpower Minister Josephine Teo kicked off with the jargon-filled nonsense that we have come to associate with her to mislead Singaporeans into the belief that the Government was actually acting in their interests. This was then followed by comments by Pritam Singh supporting a monthly minimum wage of $1300 and Parliamentary rebuttals by bottom specialist “Everybody has a car, we have two” Koh Poh Koon. PAP are terrified of a minimum wage because it undermines the whole raison d’etre of their economic model which since the 1960s has been based on a simple economic model put forward by the development economist Arthur Lewis, “Economic Development with Unlimited Supplies of Labour.” Once the surplus labour pools in Singapore had been used up, particularly with the rise of the female participation rate to Western levels  by the 1980s, Singapore should have seen real wages rise as scarcer labour forced employers to pay more and substitute capital for labour. Instead the PAP decided to make it easy for Singaporean employers, principally the Government through its ownership of most large domestic companies, to import foreign labour from our neighbours in ever increasing quantities. Whilst  the economic benefits of immigration usually outweigh the costs, the benefits must be shared with the losers, particularly unskilled and less educated workers in the lower earnings percentiles. In any case Singapore’s foreign labour policy was never about immigration but only about exploiting the difference between what workers from poorer countries would be willing to work for and what Singaporeans would accept. To share the benefits we should have had a minimum wage across the board, applying to foreign and local workers alike.  This would have prevented lower paid workers from being undercut by foreign workers. With a minimum wage there would be no cost advantage to doing so if the Singaporeans were already being paid at that level, It should also have been coupled with restrictions on employers being able to sack local workers to replace them with cheaper labour brought in from abroad. However this would have required a Government that had as its central concern the welfare of Singaporeans. Instead the PAP leadership got greedy, seeing a golden opportunity to bamboozle gullible Westerners (though not Paul Krugman who even in the 1990s saw through the rapid economic growth numbers) with high economic growth rates and thus provide a strong argument for totalitarianism and a reason to re-elect them, while also lining their own pockets by justifying outrageously high salaries. More importantly, by depressing the wage share in GDP and thus consumption while increasing saving through a growing current account surplus the Government also was able to accumulate growing claims on foreign assets in the shape of the reserves. This provided yet another means for the top leadership to enrich themselves in managing that stock of foreign assets as well as the dominant and pervasive network of state-owned companies. The most egregious example of this is Lee Hsien Loong’s appointment of his wife to run Temasek and his refusal to tell us what she is paid. A minimum wage removes a necessary condition for the PAP’s economic model to work. The obverse of the PAP’s addiction to cheap labour is low productivity because there is little or no incentive for businesses to automate or substitute capital for labour. The PWM was set up as a way of allowing the Government to pretend that it was doing something about raising the wages of the lowest paid workers while avoiding implementing a minimum wage policy. It only applies to three sectors (security, cleaning and landscaping) and is supposed to set a minimum income of $1,300 per month. Since it is a monthly figure there is no control on hours worked and employers could just up the number of hours to meet the minimum. On a per hour basis (assuming a work week of 45 hours in line with the average according to Ministry of Manpower (MOM) this equates to about $6.50 an hour. While Josephine Teo praises Workfare and the Special Employment Credit as raising wages by up to 40% this is doubtful. If the supply of labour is relatively inelastic compared to demand it may just act as a subsidy for employers who can easily substitute foreign labour for SIngaporeans and could react by reducing pay by the amount of Workfare which is relatively small anyway. By contrast in the UK the minimum wage for over-25s is about $15 an hour and the US minimum wage is about the same. The Australian minimum wage is about $20 per hour while Geneva in Switzerland (remember Goh Chok Tong’s promise of a Swiss standard of living by 2000?) has recently mandated a minimum monthly salary of about CHF 4,000 or close to $6,000. The Swiss minimum is about that of France yet Switzerland has free movement of labour with the EU. The PAP’s arguments against minimum wage are that it will raise costs for employers and also lead to higher unemployment for unskilled workers. The charge that it leads to higher unemployment is refuted by the facts. Both the UK and the US had record low unemployment rates (until the pandemic) despite minimum wages that had been raised considerably in real terms. In fact in Singapore a minimum wage will raise the incomes of the less well off (who save less) and likely lead to higher consumption and thus greater demand for domestically produced goods and services. While it may result in greater automation (which will boost productivity more effectively than any number of Government subsidies), having a minimum wage across the board will likely lead employers to cut back on their use of foreign labour and employ more Singaporeans since foreign labour will no longer have a cost advantage. This substitution effect may lead to lower unemployment among Singaporeans not less. Reform Party has had a minimum wage in our manifesto since 2011 and in the last election we said we would set it at $10 per hour. Compared to other developed countries with similar levels of per capita income this seems relatively undemanding, even timid. This would work out to a monthly income of about $2000. That should be the minimum our low paid workers should get. However, as it would destroy the fundamental basis of the PAP’s economic model, the Government will keep on coming up spurious reasons why Singapore cannot afford it and how it will lead to economic collapse. Singaporeans should see through this as the usual PAP peddling of economic myths and fallacious reasoning, most of it to defend their elite status and outsize and unjustified  financial rewards. While some see a minimum wage as a moral imperative, I see it as merely sensible economic policy.     Kenneth Jeyaretnam * The author blogs at https://kenjeyaretnam.com/ .  Read More →

My own feeling is that "Crazy Rich Asians" is a box-office phenomenon primarily because it's a story about pretty people, rich people, a love story, a fantasy about finding true love by beating your future mother-in-law at a game of mah-jong. There are designer clothes, product placements, muscular bodies, and ogling of expensive parties, mansions and exotic island destinations. If this is a totally "bogus" assessment of Singapore's core values, it would be appreciated if you could articulate one of two things: either your description of what those values are in fact or your perception of "the clowns at the other end of the spectrum" and their values. The problem is that it is hard to speak of values and righteous causes when you are morally bankrupt and value nothing but the almighty dollar. Why does a "Singapore Core" seem like a solution in search of a problem? It's time to rid ourselves of that bogus term. It reminds me of the economic argument that a country's wealth is like a pie, with only so many slices and the only way to grow rich is to deprive someone else of their share. But, I have always understood that to have a truly good life, I have to live in a world with other people who are also having truly good lives. Fortunately (or so I hope) I do not believe any one person can destroy the values overnight--it will take more than one man to bring us down. It is how we put them up, then take them down from whatever measure of pedestal we put them on, whether history of the nation or its' culture. This historical reanalysis is the measure of who we'd like them to be, and who they really are (or were). Maybe we should stop thinking of our country as it "ought" to be. Those days are done. We should take a hard look at what we really are, and the only way to get out of this mess (and we should thank the stars that we have a way!) is to look in the mirror and confront our own worst enemy. We too, have our now more mythological than deified "crazy rich gods" of our own. And who are our gods, pray tell? Money, greed, avarice, hypocrisy. Our gods, with their visible clay feet, can only betray us finally as they use our worship and emulation to dupe us ever more.   SojoüRner      Read More →

In a parliamentary democracy, the government is elected by the majority of the MPs in parliament. The political party that has the largest number of elected MPs normally forms the government. Sometimes, several parties have to join together in a coalition to form the government. In some countries, the elected MPs may move to another political party and support the other party to form the government. This could lead to corrupt practices as the MPs that crossed over could be bribed by offer of office that convey a lot of power and authority. How can this be prevented? Singapore has implemented a law stating that when a MP moves to another party, he (or she) will have to stand by re-election to keep that office. This is a good practice. However, it is the practice of the political party to impose a "whip" that requires its MPs to vote according to the party line, i.e. the policy of the party. This prevents the MP from voting according to their best personal judgment and conscience. If the "whip" is removed", it may also lead to corruption as a MP can be bribed to cast the vote in a certain direction. This seems to be a serious flaw under the democratic system - i.e. that the elected MP might be bribed to cast the votes in a certain manner for personal benefits. If the corrupt practice is rampant, what is the point of having a democracy?   Tan Kin Lian      Read More →