Paradoxical as it may seem, good news for a country doesn't necessarily translate into good news for its citizens. Especially if the country is Singapore - we saw that in my previous post. Today, Mr Wang will offer you another striking example:Business Times - 16 Jan 2007
HK ranked as the world's freest economy
HONG KONG - Hong Kong has been ranked as the world's freest economy ahead of rival Singapore in a report released on Tuesday by a right-wing American think-tank, The Heritage Foundation.
Hong Kong's ranking comes despite criticism that its economy is dominated by a handful of powerful family-controlled monopolies and cartels, which not only control prices of particular goods but also block market access to competitors.
The ranking by the Washington-based organisation puts the former British colony at the top of its Index of Economic Freedom, for a 13th successive year, as it scores top marks in six of the 10 categories on the index.
Saying Hong Kong is 'clearly blazing a trial for others to follow' the foundation and co-sponsors, the Wall Street Journal, awarded the city's economy a score of 89.3 points, 1.6 points lower than last year.
....
Second-placed Singapore, which was lauded as 'the top country in business freedom and labour freedom,' scored 85.7 points, down 2.8 points from last year.
Hang on. What on earth does "labour freedom" mean? To find out, click here. Never mind, the full report is 425 pages long, so Mr Wang will just summarise the relevant details. In assessing labour freedom, the study considers four factors:
- 1. Minimum Wage (the minimum salary, set by law, that an employer must pay an employee)
2. Rigidity of Hours (whether night shifts are permitted; whether workers can be made to work on weekends; whether the workweek can be extended beyond 50 hours etc).
3. Difficulty of Firing Redundant Employees (whether an employer who dismisses redundant employees will be challenged or scrutinised by 3rd parties such as the government or a trade union)
4. Cost of Firing Redundant Employees (what kind of compensation must be paid, if an employee fires redundant employees)
"The non-salary cost of employing a worker is low, and dismissing a redundant employee is costless. Regulations on increasing or contracting the number of work hours are very flexible."
Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation.
63 comments:
Second easiest you mean? Not so bad. Look at Hong Kong, at least we are better than Hong Kong.
The Business Time article says Singapore rank top in labour freedom.
So we are still the easiest sorry.
In Singapore, everybody else is king except normal Singaporeans.
we simply beat up our own people. No self respect and no dignity.
The "freest economy" study is based on 10 factors. Labour freedom is one factor. Labour freedom itself is based on 4 factors.
Singapore tops the world in labour freedom. That is, Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation.
Thanks! Yeah, this is Singapore Inc all right. what is important is $$$ for companies, and labour policies amply reflect that.
i bet donald trump would love to be our pm
"Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation."
Yeehah!!
We should all start businesses and treat our employees badly!! ;D
link
which is why half of our youths dont feel patriotic and wants to be entrepreneurs... LOL
Here's a well-known result that can be partially attributed to "labour freedom" - Singapore and Hong Kong have similar incomes, but the share of income going to labour for Singapore is close to 0.4, while that of Hong Kong exceeds 0.6.
But then there are also white elephants that are paid millions on flexi-time holidaying around the world to make friends, very difficult to sack and who claim they can take the country down along with them.
I luv you Mr Wang and I cannot agree more. Thanks for highlight our plights.
I do not disagree with all you said, but inflexible labour markets are not a good idea either.
Minimum Wage - I think there should be a base level, maybe what we pay McDonalds kids. I think it's higher than those who give out flyers, and banglas. And maids too.
Rigidity of Hours - There should be no maximum permissible length of time, though this is not an ideal solution. But overtime pay must be prescribed.
Difficulty of Firing Redundant Employees - There should be requirement of at least a month's notice. But you do realise that if it's hard to fire employees, no one will want to hire employees too right?
Cost of Firing Redundant Employees - See above. I prefer government food vouchers/temporary welfare till laid off employees get new jobs.
2 legs good 4 legs bad...
"I do not disagree with all you said, but inflexible labour markets are not a good idea either."
----
True, but when Singapore is world no. 1 for "labour freedom", I think it's obvious to see which is the direction in which we have gone too far.
Yes! Yes! agreed on those points.
Well yes. there is guideline in PART IV of the employment act*
REST DAYS, HOURS OF WORK, HOLIDAYS AND OTHER CONDITIONS OF SERVICE
"*Section 33, Part IV and section 115 of the Act shall apply to other employees who are in receipt of a salary not exceeding $1,600 a month."
Many companies used this clause to not allow workers to claim overtime for work to be done.
So a company can pay you S$1,601.00 a month and request for you to work long hours without any legal action taken.
As for unions, they do not fight for most employees welfare. More like a figure head. Management want to pass an act, the unions follows without actual consultation with its members.
I feel that NTUC seems to be running as a business Corporation than what it is suppose to mean Nation Trade Union Council.
Just 2 cents worth.
"Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation."
Can't agree with you completely on this cos this does not apply to two very special groups of people: the Superscale civil servants and Ministars in white.
So I guess most of you prefer to have useless bums on your wage roll earning minimum wage and threatening to sue you when you choose to sack them?
Dear Mr. Wang,
I would disagree with your point that Labor Freedom is no cause for celebration.
"So I guess most of you prefer to have useless bums on your wage roll earning minimum wage and threatening to sue you when you choose to sack them?"
I don't think anybody has said that we want (nor ought) to go to the other extreme.
Dear Mr. Wang,
I would disagree with your point that Labor Freedom is no cause for celebration. I think that given the popularity of your website amongst Singaporeans, this topic deserves more considered debate as it is a serious matter - and not to closed off with flippant remarks.
I fully understand the popular sentiment that businesses should not treat their employees as variable 'expenses' and hence the role of government is to ensure businesses that workers would be protected. Your sentence "pay a worker peanuts; make him work overtime; and then sack him without compensation" clearly lays out your view on this matter.
I am myself an employee and I too am at the mercy of my employer. I was at a stage of my career retrenched (not once, but twice!) with only the barest of compensation. Both times, the circumstances were economical and not related to my individual job performance. (In fact, I was rated quite highly in both organisations. The irony then was that I did such a great job and had just gotten a 30% increment - only to get retrenched a few months later)
Therefore, I am all too well acquainted with the view that you profess to share. I realised from a previous submission to your old website that you sometimes censor the comments that are contrary to your views. I hope that you can post my submission this time in view of my experiences in this area.
While I fully appreciate your viewpoint, I fear that your views are simply feed into popular sentiment and lack sufficient thought / regard to the longer term consequences.
Obviously, my strong views on this matter stems from my job experience - in 2 instances. While the 2 retrenchments were pretty depressing and had clearly jarring, they do not factor much into what my views on this matter and they are not the instances abovementioned.
The first instance was when I was a management consultant working on a client project. For this project, we had to assess and recommend various locations around Asia in which our client could base its new operations. Being consultants, we did a very thorough exercise (i know many may not view consultants in a positive light... and thus may not associate the word ‘thorough’ as typical consulting behaviour) and examined an exhaustive list of items before coming up with our recommendation.
While there were other important criteria such as corruption level, logistics, businesses costs, labour (in particular labour freedom) was a very significant factor for consideration. Why so? This was because the client's management had so much difficulty laying off people in their older operations (in response to economic cycles), when it was time to re-invest and expand their capacity, they decided that in view of the labour inflexibility encountered, they were determined NOT to invest further and instead look for a new location.
Eventually, the new location picked was Singapore. Hundreds of millions of dollars (USD, not SGD) and hundreds of jobs was created as a result. The difference between the top 2 locations was decided on the narrowest of margins. (in-spite of all Singapore's other strengths, Singapore's business costs was comparably more expensive). Had Labour Freedom been just the same level as the alternative country (which itself was not even close to the restrictive labour laws of other more developed countries), those jobs would more likely NOT have landed in Singapore.
While government bodies may be privy to such discussion as they are often approached by the companies before the commitment of investment and the public may read about it in the papers, folks generally have limited exposure to the decision-making processes of these companies. Therefore, it is hard to convince the general public why Labour Freedom is so important vis-a-vis the compromises in shorter term job security for Singapore. (sentiments which people naturally then to associate with / gravitate towards). When politicans talk about or trumpet this as a positive for Singapore, popular inclination for job security amongst most folks + the pervasive cynicism of Singaporeans often impose a heavy political cost. Therefore, less and less is spoken about why this 'Labour Freedom' strength of ours...
The second instance which shaped my views are closer to my current reality. I am now in a position whereby there is intense global competition for work and the reason why I still have a job in Singapore (and not in some other country such as India, China or Macedonia) is in part due to this same Labour Freedom which caused me so much distress previously. Despite our higher costs (relative to so many low cost countries), the same Labour Freedom has made us terribly more efficient than most other places.
Because we are able to cope with increases / decreases in business (through various economic cycles), the organisation has been more willing to re-invest and expand in Singapore - as opposed to relocating aboard. Every re-investment increases productivity and allows Singapore to gain / regain or extend our edge over other locations.
This harsh Labour Freedom has also resulted in a work environment very different to some other countries where you will find floors and floors full of people shuffling paper doing the same amount of business. The headcount keeps slowly increasing over time as the company can't fire the folks, the average age of workers keep increasing as the company hires fewer and fewer young people. Older workers also have no motivation to work as hard as there are no vacant higher level slots for them to work towards and there is no fear factor as their jobs are relatively secure. (probably not as bad as tenured professors but close!)
Some may argue that we shouldnt compare ourselves in such a light and strive towards the more humane standards in other more 'developed' countries... for the betterment of all mankind. To those people, i can say only this... we are a price-taker, not a price-giver... The cold economic realities of an increasingly capitalist world is as such and you better wake up and smell the coffee... We are now at a stage whereby people all over the world are competiting on the basis of who is more 'hungry'.
I am not a political activist or someone from the establishment. My only hope in writing this is that folks understand clearly the implications. One may be able to benefit from more humane, socialistic labour laws (say for a few years) but it will come back to haunt us and our future generations.
P.S. - Remember the consulting study for the client I cited earlier? Just last year, there was widespread riots in that country where the company had some operations AND was determined not to re-invest in... Why riots? Because there were no jobs... More humane labour laws do NOT create jobs...
P.P.S. - For those who are going to slam me and start insinuating that I am implying that our society should just go all the way and that abusive / exploitative work practices / environments are OK... I wish to point out that Labour Freedom is about restrictive employment practices and NOT about sanctioning criminal / abusive social behaviours in the workplace.
Jack Ryan
I'm sorry Mr Wang, but I disagree with you completely on this one. You are wrong.
I comment here.
I am wrong? Presumably you are referring to this sentence:
"Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation."
Since I am wrong, I invite you to fill in the blank yourself, with a country of your own choice:
"___________ is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation."
If you need information on other countries, why not click on the link I provided?
"I realised from a previous submission to your old website that you sometimes censor the comments that are contrary to your views."
--
I do not. You may have submitted your comment at one of the times when the Blogger server is having problems.
The only comments I occasionally delete are irrelevant ones by people who are posting links to draw readers to their own sites (ie spammers).
On this current blog, your comment appears automatically and immediately when you post it (provided of course that the servers are working).
There is a South China Morning Post article which a reader sent me, after I posted this post. Maybe I will upload it later.
The basic argument of the article is that Singapore has been very stupid to focus on manufacturing. That's because our biggest manufacturers are all foreign companies. To attract them, we have to keep labour costs down and keep corporate taxes down. In other words, foreign companies make a lot of money here and Singaporeans get little out of it.
The article argues that Singapore would have been smarter to focus on other industries.
Thanks for the comment Mr Wang, I have replied here.
Other misleading "we are no.1" surveys which the ST regularly report include the "expatriate's choice of best city to live in" (to prove the point that Spore is one of the best place on earth to live in and therefore ordinary wage-earning Sporeans should be happy) and PERC's survey on businessmen's view of the justice systems of the countries in the world (to counter allegations that our judicial system is seen to be less than fair in politics-related and criminal cases).
The former is flawed cos MOST ordinary folks do not earn more than USD10K a month or stay in some posh River Valley apartment and so the expatriate's lifestyle do not reflect that of the majority of Singaporeans.
The latter is flawed cos the PERC annual survey polls businessmen obviously in respect of their experience with the laws relating to commercial matters which they are familiar with. It is entirely possible for a country's laws to be fair in commercial matters but biased in political and/or criminal matters.
While Mr Wang's statement that "Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation" may seem one-sided to some, it is in my opinion a caricature that brings out the uniquely ugly Singapore labour market succinctly.
Management 101 Singapore style: How to sack an employee without compensation... and even maybe make money from them? Put the employee in a room with 3 levels of managers, declare to him that if he does not resign with immediate effect, he will be terminated and it will look bad on his record if future employers ask for referral information. Even after the employee agrees under duress to resign, threaten that he should pay for the short-fall in the notice period.
The above is not an exaggeration, I personally experienced it (at a so-called reputable MNC)... and so did at least 1 other ex-colleague. The irony is that I had been consistently been receiving compliments from the clients for my good performance and extraordinary commitment (note: extra long hours daily and sometimes weekends... over almost 2 years). I also know of others who were cheated of their pay (by various means) by other companies.
To jack ryan: I congradulate you for having survived 2 retrenchments. Beyond overcoming the one's circumstances, wouldn't one benefit from looking at the macro-level if-and-how such situations arise repeatedly and on a massive scale nation-wide? Btw, it is on a massive scale nation-wide, as evident by:
(a) MSM reports about the jobseekers over-40s, and also
(b) from the candid interviewers who asked why there seem to be a surge of applicants with good track record and qualifications fighting to fit into new careers that give only a fraction of their previous pay.
Surely that should give cause for some consideration into what has failed despite the world-class policy making process? The first step to solving a problem is to acknowledge there is one.
To the legal janitor:
While I appreciate the points you raised about insider-outsider employment scenario (yes, I have friends in France facing precisely that), at least they have some welfare (oh, a dirty word to our MIWs) to live with some dignity while they exercise their right to personal choices and self-determination. Some of these individuals eventually succeed in adding diversity to their economy, and thus raising the resilience and/or value-add of the economy.
Are you sure that our labour environment is not tightly regulated? Who runs the NTUC? Why are there no effective unions? Why did the whitie colleagues of Mr Ong Teng Cheong (the then NTUC guy) chastized him for approving the only labour demonstration we have in modern Singapore?
See Asia Week's interview of the late-President:
http://www.asiaweek.com/asiaweek/magazine
/2000/0310/nat.singapore.ongiv.html
For the free market forces to work effectively, policy makers must be even-handed in their involvement to create a self-adjusting balance of powers. To let free-rein to one party (capitalists) and to tightly control the other (labour) is not quite "free market", ya?
See my comments above about questioning the policy making that caused Singapore's current dilema. Self-determination is of course good, the same principle applies to jobseekers all over the world. If we are getting the same as citizens of other countries... getting the same (or worse) exposure to globalization as those in other countries, why should those "world-class" policy makers claim higher pay than their overseas compatriots? In short, I agree with belringisei response on January 19, 2007 @ 9:32am on your blog entry.
For some "balance", here are some views of my business-owner friends.
(i) The Singapore economy is too tightly regulated on numerous fronts keeping costs high (esp rental), with the exception of labour protection. With various policies favouring large-scale foreign investments (quick fix solutions), the domestic economy remains lacklustre. This and the lack of labour protection are the main reasons labour is perpetually on the chopping-board in the Singapore's economy.
IPS note on the lacklustre domestic economy:
http://www.ips.org.sg/Media/yr2007/p2007
/ST_Economists%20discuss%20downside%20
of%20fast%20growth%20_12%20Jan%2007.pdf
(ii) With an increasingly sandwiched middle class, Singapore may eventually lose even the spark to sustain the struggling local economy. The signs are already evident, even simple wholesale/retail biz reaps better returns from the M'sian locals then the Singapore locals. Guess who is richer?
I am a Singaporean living abroad. I worked for an MNC in Singapore and was told that I was a model employee. However, one morning when I arrived at work, I was told that corporate headquarters had decided to "cut heads" and that I was to be given the "pink slip" based on the concept of "LIFO - last in first out".
What recourse did I have? Nothing.
What rights do Singaporean employees have? Labor laws are pro-employers, labor unions are government controlled, organized labor is a joke!
So cut off all this crap about good labor practices, Mr. Jack Ryan!
It's worth noting the following random facts about the Heritage Foundation (purveyors of this fine survey):
1) The Foundation's president has been a staunch defender and ally of Newt Gingrich - cf. his 1997 article "Defending Gingrich".
2) In 2005 it was chosen by Margaret Thatcher to receive a $3mn donation to found the curiously named Margaret Thatcher Center for Freedom (freedom to do what was not specified - that's freedom for you!).
3) The Foundation's 2005 Annual Report includes the following statement in an article on the armed forces: "Compton and his band of brothers were fighting to defend innocent lives [in WWII] and to give freedom to people oppressed by tyranny and terror. In 2005, the grandchildren of those troops were doing the same in Afghanistan and Iraq."
Just random stuff, but you can see how it adds up. I found all this on the Foundation's own website, http://www.heritage.org. For a really racy read, check out the entry on Wikipedia!
Anyway, the obvious point is, organisations of this ilk are bound to favour cheap foreign labour and non-existent labour laws if it means economic benefits. It's just their thang, y'know?
Legal Janitor doesn't seem to understand that my post does not actually present any startling new ideas.
I am merely paraphrasing the study's own conclusions. My slight twist is just to present it from the worker's perspective, rather than from the employer's.
Singapore scores well on "minimum wage" crtierion ---> It's easy for employers to pay workers peanuts
Singapore scores well on "rigidity of hours" criterion ---> It's easy for employers to make workers work overtime
Singapore scores well on "difficulty of dismissal" criterion ---> It's easy for employers to sack workers
Singappore scores well on "cost of dismissal" criterion ---> It's easy for employers to sack workers without compensation. ("Costless" is in fact the word that the study uses).
Legal Janitor, if you disagree with anything in my post, you're basically disagreeing with the study. If that's your intention, perhaps you should make it clear and explain what you mean.
Jack Ryan,
While I do appreciate your point about competition and longer-term survival, I am skeptical when the government trumpets this cause simply for the reason that it does not practice what it preaches.
How can they convince a people who are struggling to survive when they themselves refuse to be exposed to competition by removing the barriers that prevent fair play, but instead introduce policies that benefit the rich and make it harder for the poor?
They've got to walk the talk or risk appearing as self-serving hypocrites.
You work in an mnc and presumably have ample knowledge about economics.
To what extent do these factors encourage mncs to set up shop here? If we imposed a whole bunch of laws that gave Singaporean workers as much rights as western employees have, would we be better off overall? Would the mncs still make us their hub if the cost differential decreases?
I don't understand why it is that so many like Anonymous who posted on Jan 20 at 3.02am can't seem to let the fact sink in: Mr Wang or his supporters are not calling for Singaporean workers to be given "as much rights as western employees have", he's just saying that we've swung too far to the other extreme. Is that so difficult to understand?
Anonymous January 20, 2007 3:02 AM
"You work in an mnc and presumably have ample knowledge about economics.
To what extent do these factors encourage mncs to set up shop here? If we imposed a whole bunch of laws that gave Singaporean workers as much rights as western employees have, would we be better off overall? Would the mncs still make us their hub if the cost differential decreases? "
Cost is labour is only one of the factors in which a MNC considers when deciding whether to make a place their Hub.
Infrastructure, stability of the government, Fairness in dealings, free of natural disasters, tax rebates and the ease of setting up a local branch are plus points in which MNCs would look into.
Indonesia, Myanmar, Vietnam are cheaper in labour. Yet why are there fewer MNCs there than in singapore?
The fact is we are accorded less benefits than DEVELOPED countries in Europe and that we are accorded less protection then Developed countries.
We have not given singaporean equal rights and welfare as the european countries nor do we asians work like europeans. The working culture in Asia and in Europe are different.
Hence you are agreeing that "Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation." and we should continue to be such a place just to attract MNCs?
I believe you are not an employee of any company and you are not even working in singapore to make such a statement. Since this statement would work only in the advantage of the employer and not employees and the common middle class income group. Correct me if i am wrong.
I would hope that the Government would give protection and compensation due to citizens who are working in singapore.
Just 2 cents worth.
To anonymous at January 20, 2007 3:02 AM:
1. Why are you still harping on foreign MNCs to be the saviour of the Singapore economy? Other countries (esp since 1997 crisis) have realized the importance of developing a robust domestic economy to provide resilience against the shakes of globalization. Is developing the domestic economy simply too challenging a task for our MIWs?
Extract from UNCTAD "Should Countries Promote Foreign Direct Investment?" Feb-2001.
http://unctad.org/en/docs
/pogdsmdpbg24d9.en.pdf
"There is weak evidence that FDI generates positive spillovers for host economies. ... Indeed, it appears that plants in industries with a larger multinational presence enjoy lower rates of productivity growth. Empirical research thus provides little support for the idea that promoting FDI is warranted on welfare grounds".
2. Are you sure labour cost is such an huge overriding factor that is supersede all other factors for foreign direct investment? What percent does labour cost contribute to the total cost of business in Singapore? Is FDI determined by costs alone?
See Tue Jan 9, 12:57 PM ET Yahoo news on "Global Foreign Direct Investment continues to surge in 2006: UNCTAD"
http://news.yahoo.com/s/afp/20070109/bs_afp
/unworldeconomy_070109175745
"The preliminary data indicated that United States retook its position of the largest host for FDI in the world last year with a 78.2 percent increase to 177.3 billion dollars.
Britain was second in UNCTAD's FDI table with 169.8 billion dollars..."
Hello, US and UK with their labour rights have not chased away FDI, have they? So much so for "If we imposed a whole bunch of laws that gave Singaporean workers as much rights as western employees have, would we be better off overall?".
Better yet, read the entire UNCTAD here. Strongly recommended if you're a policy maker/influencer, please wake up to the real world.
http://www.unctad.org/TEMPLATES
/webflyer.asp?docid=7431&intItemID=2068
&lang=1&mode=toc
3. In effect you've agreed with Mr Wang's observation: "Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation". Of course, perhaps one has "white-washed" credentials like WSK such that he/she and his/her children (like WSM) has slim probablity of becoming a peanuts worker (not the NKF-type) and has no qualms about their policies' effect on one's fellow Singapore citizens, then Singapore is surely a wonderful place live and have children etc. However, going by the incredibly low birth-rates, I believe Singaporeans have voted clearly with the few remaining freedom of choice they have.
Had not expected this flurry of responses to my post. I do not blog and infrequently comment. (The last time I did was actually on Mr Wang's old website on the NS issue sometime ago.
I've highlighted some of the counter-arguments raised and will just attempt to provide my thoughts on them. (While I would like to provide the most eloquent and robust counter-counters, pardon me if there a bit short in responses here but I'm a tired and not ready to type heaps and heaps tonight.)
1. "Singapore has been very stupid to focus on manufacturing. That's because our biggest manufacturers are all foreign companies. "Singapore would have been smarter to focus on other industries."
Mr Wang is now trying to trace the root cause of this whole issue by saying that the reason why we have high Labor Freedom' is because we 'need to provide cheap labor' and the reason why we need to provide cheap labor is because we 'picked the wrong industries' and the wrong industries that we had picked was 'manufacturing'?...
So the 'sad state' of our high Labor Freedom score was ultimately because back when Singapore gained independence in 1960s, our economic planners like Goh Keng Swee was not long-term in their thinking and chose the wrong industries to pick? (ie. Manufacturing) ...and that they should have picked / promoted something else that did not depend on cheap labor? (which Singapore had plenty of back then...) Hmmm....
In any case, let me share an insight... the percentage in which labor costs is typically lower as a proportion of TCO 'total cost of production' for a manufacturing operation and usually pales in comparison to the total investment amount as opposed to a services unit. Therefore, the sensitivity of a factor to determine re-investment decision of a business is comparably lower.
Regardless of whether it is a manufacturing or service business, which other factors comparable, if a planner for has to decide between 2 locations with comparable level of skillsets available... but one (Country A) having a higher labor costs + low Labor Freedom VS another (Country B) having lower labor costs + high Labor Freedom - which location do you think he / she would choose?
If Labor Freedom had been high in Country A to compensate for the higher labor costs, there would at least have been a close fight... without it, it wouldnt even be a fair fight!
2. "wouldn't one benefit from looking at the macro-level if-and-how such situations arise repeatedly and on a massive scale nation-wide?"
Hmmm... who is the one looking at the macro level here... You think i was looking from my micro-level experiences? And that your 'nation-wide' issue is a 'macro-view' and thus a more holistic picture?
Think again... What is happening in Singapore today is larger than the boundaries of our tiny island and policy makers... Who reallty has the macro view on this?
3. "What recourse did I have? Nothing. What rights do Singaporean employees have? Labor laws are pro-employers, labor unions are government controlled, organized labor is a joke! So cut off all this crap about good labor practices"
I felt the same feelings when it happened and I can truly empathize with how you felt.
Let me share with you another part of my experience. As part of my work previously, I travelled quite a bit and i happened to stay in this one Asian country for a while... over there, there had all the elements you desire - Labor laws are pro-employees, labor unions / organized labor are 100% employee-led and VERY, VERY strong (in fact, amongst the strongest in the whole world! I kid you not)... but so what? the people are still not happy and there are constant labor strikes. Re-investment in the country is low as even their domestic countries do not want to re-invest, choosing other countries instead of having to fight with their unions year after year. The society is divided - with clear distinctions between the rich and the poor, more so than in Singapore. It is hard for folks to find jobs over there and common to see young folks, with US degrees and MBAs 'intern' from company to company...
I too desire a better world where there is fairness, equity and happiness in a more humane society. But the kind of organised labor you desire will not lead you there... economic growth and prosperity remains the key foundation.
Side Note - when I was there in that country... it's remarkable how everyone over drinks will tell me how lucky Singapore is to have LKY... and how they desire to have someone like him lead their country... but when I think about what he would do to their unions, I can't help but laugh - they do not know what they ask! People all over the world have something in common - they see the end state and desires but ask not how it is going to be achieved!
4. the following random facts about the Heritage Foundation (purveyors of this fine survey)"
Ahhhh... another conspiracy theory... :)
Well, if you doubt this study, try to do a search for others and see what is the considered views of eminent scholars are on this matter... Lastly, what does your common sense tell you about the realities of life?
5. "How can they convince a people who are struggling to survive when they themselves refuse to be exposed to competition by removing the barriers that prevent fair play, but instead introduce policies that benefit the rich and make it harder for the poor?"
Err... so? So what if they are hypocrites and only protect themselves? Would NOT being hypocrites make the situation better?
You will probably FEEL better but how does that make your job more secure from the competitive forces sweeping all across the world?
When you write "introduce policies that benefit the rich and make it harder for the poor" - guess you referring to the GST and CPF cuts?
You obviously see it as a rich / poor issue... The way I see it... in the continuing battle to attract businesses to come / stay in Singapore (vis-a-vis others), the govt has decided that has to be more tilt towards businesses (to the unfortunate detriment of employees again...)
6. "To what extent do these factors encourage mncs to set up shop here? If we imposed a whole bunch of laws that gave Singaporean workers as much rights as western employees have, would we be better off overall? Would the mncs still make us their hub if the cost differential decreases?"
Yes. As experienced first hand by myself... Obviously, there are many considerations but labour is almost always one of the top criteria.
7. I believe you are not an employee of any company and you are not even working in singapore to make such a statement. Since this statement would work only in the advantage of the employer and not employees and the common middle class income group. Correct me if i am wrong.
I would have LOVED to tell you that it's all one big LIE and I am actually some Aussie kid yanking your chain... or some rich kid at Nassim Rd (whereever that is!) who is just living off his inheritance and expounding the virtues of a capitalist society...
Unfortunately, I am an employee working in Singapore who day-after-day has to grapple with the same issues that confront you.
It's remarkable how some see this as a battle between employers and employees, with distinct sides... when it is actually a global war where there are no boundaries or safe haven...
Whether you like it or not, unless you have already struck Big Sweep / 4D or currently a member of the lucky sperm club AND if you desire a capitalist lifestyle with iPods, Samsumg TVs and Toyota Wish MPVs, it means that one has to engage the economic reality that exists today.
Jack Ryan
PS. The Legal Janitor - I've read your postings. They're very well-written and I can only aspire to reach your standard!
PPS. Mr Wang. I really enjoyed reading your earlier postings but I cant help but notice that you're becoming more one-sided in your views. Just one feedback from a reader.
The Market will save you, and if you are suffering - its just your fault.
The Market will fulfill your desires, and if you are not fulfilled - its just your fault.
The Market has a place for you, and if you have fallen through the cracks well its just your fault.
The Market is the best freedom you can hope for, and if you feel trapped and squeezed, its just your fault.
The Market is afterall is the people, and if the people are angry - its just their fault
The Market ultimately is the arbiter of value, and if you feel devalued, well its just your fault.
Jack Ryan,
You have focused too much on the economy and making money. Life to me is more than ipods and big Apples. Whether the government is hypocritical matters to me because honesty and sincerity are virtues that edify humanity and that money cannot buy.
If I had to choose, I'd rather be a regular patron at food courts than eat at posh restaurants everyday with hypocrites who do not have compassion and sympathize with the plight of the less well off for the sake of being no. 1 in everything.
Ahhh but don't you see - your empathy though noble is only good if you gnaw impotently as an atomized individual or if you are rich, you could donate the the majority of your income to a charity.
But if such feelings were to be translated to the REAL world, to even attempt to soften the "cold ahrd economic" realities - horrors will occur. Nobility and Empathy in the individual is Totalitarianism and Populism in society.
Afterall you must be cruel to be kind.
And Jack Ryan, can or will you trust hypocrites and believe whatever they say especially when they do not practice what they preach?
How can we not talk about the income gap when workers are the ones who slog and sustain the economy? Can the government do so alone? But why are they enjoying the fruits and giving the working class the crumbs?
The GST, taxation and fare hikes are but the tip of an iceberg of unsound policies in many areas such as education, housing, health, civil service employment etc. Being a management consultant, I am sure I do not have to detail them to you.
The devil is deceptive and crafty that disguises evil with good. Humanity needs love and compassion above all else and help in kind will come naturally where they are present.
I think the confusion is that some writers ARE PROUD that we have made it to No. 1 in labour freedom. If we can accept that some quarters feels it is A-ok to be no. 1 in that area, and it is ok to ensure a high GDP at all cost (ie even loss of jobs to locals, high turnover at age 40, wage freeze for middle class) then I guess most of this angst will disappear. Again, the govt is doing this for our own good! We are just too blur to see it!
Jack Ryan:
thank you for the compliment. skill in writing I may have, but in life experience I would still have to defer to you. =)
I despair that the commentors here fail to see the truth and reality, and instead insist on perceiving the issue as one of whether the government "has done" or "is doing" something to achieve "labour freedoms", as opposed the fact that "labour freedoms" actually mean that the government has REFRAINED from doing anything to interfere with the natural state.
These people here are asking for the government to intervene and manage and tinker with the market! I cannot believe and understand why they would do so! Do they not see that when governments interfere and meddle, even gold turns to lead? For all their complaints about how horrible and authoritarian our government is, they are asking for MORE power to be put into the hands of the government to control and manipulate the economy and the people within?
I despair, I truly do, because what I see are people trapped within the Matrix, asking for the SYSTEM to help them, when they do not realise that as long as they depend on the SYSTEM, they will never be free of the Matrix.
agagoga wrote: "There should be no maximum permissible length of time, though this is not an ideal solution. But overtime pay must be prescribed."
Overtime pay isn't feasible as more jobs require employees to work after office hours (esp IT). And I doubt many companies are willing to pay; nor will the govt make them, since they are afraid businesses will move elsewhere.
please get out of my elite uncaring face! This is the way it should be! And the middle class citizens (Derek Wee) should fend for themselves. Be thankful, Workfare should come in so that employers can artificially depress the wages of the lowest income group, so that the Govt can subsidies their pay via workfare. But no, we will not enforce a minimum wage. So let us see how low we can go.....
I can't help feeling a sense of loss and fear when I read the responses to this entry.
Not so much that I fear for my employment. But more because I fear that people are getting too caught up in the catharsis of talking about an issue, to actually do anything.
Legal Janitor,
I despair that you and those of similar minds fail to see that the government does intervene in the market by setting policies and offering incentives that attract companies and talents to Singapore. It is a different side of the same coin that you refuse to see because you are probably also interested only in the money.
You have also failed to realize they poke their noses into many other areas where they shouldn't and do not when they are supposed to. And please, you aren't the only "experts who can see the big picture about globalization.
I despair indeed.
Dear Legal Janitor and "Jack Ryan",
Your statements seem to agree with Mr Wang's observations for the discussion that "Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation". The only difference is that you conclude that this is good for Singapore and its citizens, whereas Mr Wang and others expressed that the citizens have not benefitted even if Singapore may have. Just a difference in conclusion, is that so hard to understand?
Seems like both of you are thinking in binary 0-1 terms when life is naturally analogous. How many of the commentors here are asking for moderation? How many are asking to swing from the current extreme to the other?
"Moderation" does not mean that government needs to add more regulations, just relax the numerous regulations holding back:
(a) labour's own right to defend itself, e.g. look at our dysfunctional NTUC, and
(b) the locals' entrepreuner spirit. Anyone remember the death of the moving food vans?
Since your "else-case" scenarios are based on the swinging to other extreme, it is therefore natural that you'd not agree with Mr Wang's conclusions which are based on achieving a moderate labour position.
For some global reality-checks and figures, go read the (United Nations Council on Trade and Development) UNCTAD's reports on FDI. What do these say? Which countries gathered the most FDI in 2006? Is it some cheap-labour Third World country? Or USA and UK?
Since the MIWs insists they are worth more than the 1st-world policy-makers' renumeration, isn't it fair for their shareholders (i.e. the Singapore citizens) to expect these policy-makers to deliver better than 1st-world results to the shareholders? Have they?
Anyway, I appreciate Mr Wang's blog for it is a place to find the real-and-raw ground situation in Singapore, esp since negative comments are often censored/filtered by the MSM.
To Legal Janitor who wrote: "I despair, I truly do, because what I see are people trapped within the Matrix, asking for the SYSTEM to help them, when they do not realise that as long as they depend on the SYSTEM, they will never be free of the Matrix."
Perhaps it did not occur to you that the "complainers" may already be coping with the situation (disconnected from system and surviving), **tongue-in-cheek** else they may have joined the suicide statistics :-P ? Each may has his own survival strategy, perhaps he does not harp on it so as not to side-track from the discussion on hand... which is "good news for a country doesn't necessarily translate into good news for its citizens... Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation".
To Jack Ryan who wrote: "So the 'sad state' of our high Labor Freedom score was ultimately because back when Singapore gained independence in 1960s, our economic planners like Goh Keng Swee was not long-term in their thinking and chose the wrong industries to pick? (ie. Manufacturing)"
Surprised that you would dreg out decisions made 40 years ago for finger-pointing. What is your logic? That during their 40+ years reign, the previous and subsequent generations of MIWs were unable to spot changes (in the Singapore demographics and/or the global landscape) to steer a new path that will benefit the citizens? You totally lost me there.
To simplesandra who wrote: "I doubt many companies are willing to pay; nor will the govt make them, since they are afraid businesses will move elsewhere"
Sharp observation! Now the question is: why is Singapore, supposedly a 1st-world developed nation, trying so hard to attract businesses looking for 3rd-world cheap labour? E.g. Can we ultimately compete with the hordes of India/Chinese IT folks? Why isn't Singapore's so-called highly educated-and-skilled workforce able to attract (or even create) niche high-end business who can-and-will pay despite our 1st-rank Labour Freedom? Singapore Swatch anyone?
Anonymous at Jan 22 1.10pm:
Interesting how you start off your comment by trying to discredit another person by accusing them of "probably also interested only in the money". Does it make you feel good attacking people like that? Does it in any way at all make your argument more convincing? It's not good form you know.
You say that the government does interfere, in the form of "policies and incentives" to "attract companies and talents to Singapore". Ok, would you please give some examples of these policies and incentives, and please also provide the source where you got the information. Don't use MSM sources btw, they are useless. Find something authoritative, like parliamentary legislation or ministry directives. I'm curious what policies or incentives you are talking about.
Secondly, you are clearly mistaken when you say that I "failed to realize they poke their noses into many other areas where they shouldn't and do not when they are supposed to". If you read my comments carefully, you will realise that central to my arguments is that the Government has interfered TOO MUCH in EVERYTHING in Singapore, and my argument is that their power should be REDUCED, not INCREASED.
Lastly, I have never claimed to be an expert. I have only offered my own opinion here.
MIW non-logic?:
"Moderation" does not mean that government needs to add more regulations, just relax the numerous regulations holding back:
YES! FINALLY SOMEONE UNDERSTANDS! That is exactly what I mean when I say, we do not need the government to interfere more, we need the government to interfere less.
It is insane to expect the Government to increase restrictions on trade in labour/services or foreign. Instead what must be done is to REDUCE (hopefully completely remove) the restrictions on our local entrepreneurs and workers.
"YES! FINALLY SOMEONE UNDERSTANDS! That is exactly what I mean when I say, we do not need the government to interfere more, we need the government to interfere less."
OIC now you want the govt to interfere less? After all that they have done and brought us to the present, where things have now reached an extreme, and you want them to leave it alone now? That will be naive. You have to do something to undo the mistakes of the past.
anonymous:
so you think that after screwing up for so long, they can now magically make things right?
This is where you and I differ. You think that by interfering MORE now, they can make things right. I think that by interfering MORE now, they will make things worse.
And the best thing is, after complaining so much about them and how fucked up they are, you actually think they're able to make things right?
who's the naive one now?
You want the government to interfere less? Such intelligent hope.
Woah...
Looks like only the Legal Janitor and I are debating with a host of angry folks here...
Look... rather than make this more emotional than it is, let me just start off my stating that I offer my time and effort here only to express my point of view (POV) and hopefully balance the arguments here.
I am amazed how so many folks are caught up with their emotions when I rightfully should have been the one to do so (afterall, I was retrenched before!)
So, i ask everyone to calm down and make their arguments based on substantive points. One thing I've learnt about the internet is that rather bring together views and consensus, more often than not (unfortunately), the easy and abundant proliferation of facts, half-truths and outright lies serve only to harden viewpoints.
To the die-hards who blame the government for everything, I do not seek to change your views. As I've mentioned, I am not a member of the establishment and neither do I agree with everything that the government has to say. (And if you read the excellent writings of Legal Janitor, I suspect he has the same leanings)
I would be glad if you just take the time to read about my personal experiences and the views I have formed on this matter. I hope my greatness impact over the past few days has been to the undecided, who desire the more substantive argument.
I find that my views are similar to a lot of Singaporeans who travel around abit... while there are better places elsewhere, Singapore is not too bad a place to be, really...
Again, as I've said, I do wish for
a better world where there is fairness, equity and happiness in a more humane society.
But we must recognise that, like it or not, we are in a competition and we must keep going and keep going faster! The only alternative is to rest and either wait for others to catch up, OR hope the others tire themselves before we do OR join the other more well-endowed team!
Jack Ryan
PS. Recommended Reading for those
who are interested - a book by Michael Porter, the Competitive Advantage of Nations. (suspect this is also a Singapore EDB Officer bible!)
http://www.amazon.com/Competitive-Advantage-Nations-Michael-Porter/dp/0684841479
PPS. Legal Janitor - Unlike you, I do think that there is a place for government intervention in free markets... Even in the US, the cradle of capitalism, there is surprising a lot more government intervention than one might be led to believe. (Just spend a few weeks in the US yourself!)
Lastly, I heavily recommend you watch the Charlie Rose interview with Warren Buffet and Mr & Mrs Bill Gates (when Mr. Buffet announced the donation of a sizable proportion of his wealth to the Bill Gates Foundation)... even he acknowledges that sometimes, free markets fail!
Jack Ryan:
Thanks again for the compliments. I would just like to clarify that I don't advocate NO government (anarchy), just small/limited government (minarchy).
There IS a place for government in society, just a clearly defined and limited role, as opposed to the omnipresent role that our Singapore government has.
You could take a look at my about page for a clearer explanation of my ideological position. =)
Dear Legal Janitor,
Haha...
Your sentence that you do no believe that "governments have any business in business" sure had me fooled! Don't mean to suggest that you support anarchy either!
Might be just semantics here but I DO believe government have a role to play in business!
How much of a role it would have will have to depend on the stage of development of the economy and the competitive environment in which the economy exists. Just because governments are prone to over-do their intervention does not mean that non-intervention is better.
Anyway, debate this over another day on your website.
Tired. Got to get some Zzzs...
Jack Ryan
Jack Ryan, you are not the only one who has been retrenched before, experienced, travelled around the world, a consultant or has and MBA or Phd whatever.
Does it mean that people who do not agree with your views and express differing opinions are emotional? You are either reading too much into it or you think too highly of yourself. Shrink that ego dude.
You see Jack Ryan and the Legal janitor believe teh Singapore government screwed up big time. They interfere too much.
They intefere too much in eocnomcis and intefere too much in society. You see the governement interfered too much by giving labour freedom ( what an oxymoron :)). and if they now were to remove the freedom from labour - suprise suprise they would be interfering too much too!! Instead the government should stop interfering - so all the icnentives, schemes and legislation in place should be removed? moderated? left to stand? that the governemnt should commit sudden jurisdictory seppuku? Go back in the past and prevent their pasts selves from intervening like in Back to the Future? Will legalboy and Ryan go through which legislations and policies should be removed and left to stand with a fine-toothed comb? If the goevrnement followed their advice would that be interference?
And even so - they part ways. Legal janitor suffers from complete government phobia while JAck Ryan has a place for them in the market as long as they interfere correctly! (what government of any ilk claims otehrwise??) Legal janitor although in an extreme position is far more intellectually consistent while jack Ryan has alittle more explaining to do. Its good for the govt to intervene as long as it makes sure there is free labour - ahem - labour freedoms? Or as longa s Singapore kicks the rest of the collective world's ass in becoming as capital- friendly as it can get? As lawyers say a regulatory race to the bottom. At least Legal janitor's points are clear - no govt intervention in the marketplace if we can help it. In order to reach no.1 on labour freedoms, we required the governments intervention - did the free market suddenly propel us to no.1 - or was it policy. I think the answer lies somewhere near the Padang. Jack Ryan doesnt want the govt to intervene but , unlike LJ, unless someone needs help. (and that someone isnt labour)
And phew thats just on the economy. i wonder what choice words they have for society itself.
A bit irritated at Mr Wang for suddenly inserting so many new articles in his blog since this topic begain in earnest... usually, not many people will bother to read the comments of earlier blog entries and the debate quickly narrows down to only a few folks who keep coming back. But then again, it is Mr Wang's blog and I think i have also hogged Mr Wang's blog for too long.
So... Not trying to convince diehards here but this will be my last post on this issue.
Firstlyt, just to explain why I felt that arguments are going more emotive as opposed to substantive.
Let me just share another piece of my experience here... I have met a lot of people whilst on my past work and had the opportunity to learn quite a bit about emotive arguments. Many a times, the projects involve cost rationalisation and that's where you do hear a lot of emotional arguments. Frequently, discussions get bog down over what is 'fair' / 'unfair', 'good' /'evil' and of course, a rich dose of put-downs like deceptive / devil / hypocrites / etc... The reactions so far do remind me of those times.
What people fail to understand that in the context of what we are discussing - ie. the global economy, economics, competitive advantage of nations, labour markets, MNCs, FDIs... there is NO place for these subjective, emotive arguments! Yes, it is cold, hard calculative logic at play here. Of all the people here, as a Corporate Lawyer for a MNC, I would have expected Mr Wang to understand this. Sometimes, the balance in views of "Mr Wang Bakes Good Karma" is so different from "Mr Wang Says So" that I wonder if some twin has taken over the blog!
Let's be clear about the context here.
As I've mentioned before, if one desires a certain standard of living (ie. materialistic desires), one would have to be connected to the global economy. By virtue of your own desire, you will be automatically enrolled into this race. (like Army IPPT)
There are no 2 ways about it. Having established this, unless one is already wealthly (ie. current member of the lucky sperm club), one will have to compete and run against all the others out there.
And guess what, there are many of these folks out there that are hungrier, will run faster and are starting off with a lower base standard - thus willing to settle for less.
Unless many established developed economies, Singapore does not have a hinterland - we have extremely limited ability to dictate what can / cannot OR acceptable / not acceptable standards of behaviour or norms by virtue of our small market size. As such, we are price-takers, not price-givers.
We are not naturally blessed with abundant natural resources. We only have our two feet in which we must run faster and harder than other folks out there.
This is fortunately / unfortunately our fate. We are unfortunate in the sense that as long as the dynamics of global economics and capitalism does not change, we are condemned to keep running if we are to maintain our place in the world.
However, we are fortunate in the sense that unlike many who are blessed with natural resources and are corrupted by the influence of the easier life and fall by the wayside of progress, we have evolved into a very hardened and competitive society - allowing us to maintain / improve our standing in the world.
We can talk about how enlightened other more developed societies are and how we should be like them but it simply clouds the fact that we are NOT them. Labor Freedom is only one aspect in which how our leaders have shaped our society such that we have a viable place and are not sidelined in this global economy. Other elements include GST - to compete more effectively against low tax jurisdictions.
Again, Singapore, by virtue of its small domestic market has to constantly find the reasons why others should locate here. There are no such compelling need for large countries such as China or India to do so - the large, growing domestic markets are the reasons itself. Unless everyone else slows down, we have to keep running faster. And if everyone does slow down, YES, we can then run slower. (but we must keep running)
The sooner one understands this the better. So as depressing as it sounds, what can one do about it? Are we, Singaporeans, condemned to keep running in a perpetual race?
As I've mentioned before, NO.
There are 2 ways out of this... Firstly, change your orientation towards life. If you can let go of the need to constantly upgrade your telephone, change cars / MPVs, computers / wireless routers / plasma / LCD TVs / holidays for family / tuition / enrichment classes for kids and live a very simple life - you would have exited from this race and you would have little to worry about.
If you cant give it up - then the next best thing may be to join the competition! ..and hope that over there, the competition is less fierce and folks over there can't take as much pain as Singaporeans can. The good times may not last over there but heck, at least you wont have to run as hard or as long as over here in Singapore.
Jack Ryan
"At least Legal janitor's points are clear - no govt intervention in the marketplace if we can help it."
Employee VS Employer - Referee: NIL
(Free for All)
Ah jack Ryan,
You have thrown down the gauntlet, it is the Red Queen's Gambit - running faster to stay in place. There is no emotion in this race, just cold hard logic. And the cold hard logic is this:
Singaporeans want a lifestyle (usually warranting the need to join the rat race)
Singapore due to its size is on the constant brink of extinction
Our competitors from the third world are cheaper and perhaps hungrier.
If you want to stop running, leave this land or be alienated form your people and start some community of Luddites
What is not mentioned here in this implied metaphor of a race is that it is more like being chased. Chased into first position. You see the point made by the "emotional" people is that they would like to stop being chased not by global competition but by their own government's policies. You hear no complaint about the global free markets in general, but that of government regulation. (although they all have passionate arguments on what the govt should then do or if it should do anything at all).
Jack Ryan argues that there is no choice - the market gives neither the government the choice and the government hence has no choice but to give the people no choice. But I disagree, the Market is all about choice. The government need not turn the Singapore people into the best product for global capital. The Singapore people should choose how they can best produce in the global markets.
This would be false of course if you believe that the sole reason for Singapore's success is the existence of its government and not its people.
If after 40 years of progress, Singaporeans still need to sell themselves cheap, for whatever reasons stated by the government, then I can only conclude that the government is bloody inefficient.
There was no progress after all.
Reading this makes me a bit sad for Singapore and Singaporeans. I am just so glad that my parents chose to migrate all those years ago.
Singapore is turning out to be a tough, tough place to survive in, especially if you are not born rich, or amongst the "elite".
What pains me the most when I visit Singapore is seeing the old ladies and fellows working in the food courts. They should not have to work so hard at that age, just to eke out a meagre living.
And I fully agree with zhuaz's comment!
I must say that I agree 100% with the labour freedom situation in Singapore. Truth hurts so close to heart. Nice.
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