Apr 23, 2011I'll add some perspective.
A senior citizen's musings...
SENIOR Minister Goh Chok Tong acknowledged that the prevailing high cost of living in Singapore would be a likely issue in the coming general election ("Rising costs a likely issue: SM"; Tuesday).
He asked the people to decide who they thought would have a better solution to such problems.
I appreciate his forthrightness and am thankful for his timely reminder on this matter. But his comments have evoked mixed feelings for me.
Every time we are assured that things are still affordable, we find prices rising higher. Now we are cautioned to choose the right team to provide the solution.
The ruling party has had ample opportunity to resolve these issues, but the problems still plague us. I may now be an economically unproductive senior citizen, but I still love my country.
Fu Jiat Joon
Right now, the cost of living is rising in many countries, not just Singapore. One cause is the US monetary policy - as they print more and more dollars to tackle their economic woes, the excess money supply feeds into the global system and leads to inflation worldwide. In addition, food prices are escalating around the world, for a complex host of different reasons that the experts are still debating.
Nevertheless, the rising cost of living in Singapore cannot be solely attributed to external factors. In fact, the average citizen's difficulty in coping with the rising cost of living is very closely linked to an intrinsic, uniquely local factor. That factor is the PAP government's policy on immigration and foreigners. I'll explain.
A rise in the cost of living is not a problem, if it is matched with a rise in average wages. Unfortunately, over the past five years, Singaporeans have NOT been able to earn more money. Singaporeans are working as hard as ever (and in fact, hold the current world record for working the longest hours), but their incomes have been stagnating. If you don't believe me, read this.
To put it simply, while Singapore's economic growth has arguably been decent, this simply hasn't translated into a better life for the average Singaporean in the street. Our reserves may have grown; our government ministers may be drawing bigger and bigger salaries; the Bangladeshi workers and the Filipino waitresses may be feeling satisfied - but the average Singaporean just isn't getting any benefits out of the nation's success.
Why is this so? Well, wages are related to productivity. To earn more money, the Singaporean has to raise his productivity by learning new skills and gaining more knowledge in value-added areas. Companies have a role to play in this too. They have to innovate, become more efficient, invest in new technology, and in training their employees. That's how productivity can increase, together with sustainable wage growth.
But this isn't happening in Singapore. On the contrary, our labor productivity has fallen to shockingly low levels. In 2009, for instance, labor productivity growth was worse than zero. It was negative (-14.9%). And why has labour productivity fallen so badly in Singapore? It's because the PAP government's policy on foreign workers actually discourages productivity. Instead of getting Singaporeans to increase productivity by learning new skills and knowledge, the focus has instead very much been on importing more and more cheap foreign labour to do the job. To quote the Wall Street Journal:
By some estimates, a third or more of Singapore's 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations.So I hope that the direness of the situation we face, as a nation, has become clear. Obviously, we cannot completely shut the door on foreigners, especially not on foreign talent. But there is a balance that should be kept. When labor productivity falls to -14.9% and Singaporeans' wages stagnate year after year after year despite the fact that the economy is actually growing, you know that the balance has not been kept.
At the same time, though, foreign workers have driven up real estate and other prices and made the city-state's roads and subways more congested. Their arrival has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore's gap between rich and poor.
Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 2007—a phenomenon that could eventually translate into lower standards of living.
Lee Ah Lee, a 58-year-old who makes 850 Singapore dollars a month (about US$600) clearing tables in a cafeteria, says the flood of immigrants has made it hard to make ends meet by pushing down blue-collar pay in Singapore, which has no legal minimum wage. Sitting nearby in a drab apartment block built by Singapore's Housing Development Board, a state-owned body that constructs and sells subsidized housing, 79-year-old Lee Kwang Joo says low-skilled foreign workers are often housed in corporate dormitories, meaning they have no housing costs and can survive on lower pay.
Goh Chok Tong talked about the rising cost of living and posed this question to Singaporeans - "Which party do you think can solve this problem?". But here are the better questions to ask yourself. In the first place, which party caused the problem? Which party IS the problem?
If you are an intelligent person, you know the answer. Vote wisely.