1/17/2006

straits times editorial joking

the first funny article i read in the editorial of the straits times. it more or less suggests that a tour guide must also drive the tour bus, be an expert in both and thus earn more. this is called job redesigning or upgrading. so we have two jobs reduced into one in order that one man can earn more while one man loses his job. i prefer another approach. create more attractive jobs and paying very well too. from one job, create another two jobs from the first jobs, and all pay equally well. how does it work? have a ceo. then create a senior ceo. then create another advisor to the ceo. all big titles and deserving at least ceo pay. in one stroke it kills two birds. create more jobs and jobs that pay more. why destroy jobs when there is unemployment? why take away someone's ricebowl to give it to another leaving one without a job? it is hilarious.

16 comments:

Matilah_Singapura said...

Journalists, next to the politicians who's balls they lick, are the scum of the earth.

Free press also means free to goreng the people by stating the most outrageous things.

redbean said...

hmmmm,

i think they are intelligent people and know what they said.

bulikyre said...

Redbean, I don't agree with your position in this post.

You also contradicted yourself, as the CEO example already demonstrates the futility of creating multiple redundant roles.

I recommend you take a read at Paul Krugman's article here:
http://web.mit.edu/krugman/www/hotdog.html

It deals with a similar issue, and may change the way you think about this.

redbean said...

hi bulikyre,
welcome to the blog. i read the article by krugman. i fully agree with him and greider. the concept of increasing productivity by taking on more jobs is sound under certain conditions. that's why krugman was talking about a hypothetical situation with certain assumptions, ie a freely unconstraint market where you can increase your supply and productivity and there will be a corresponding increase in demand. also the redundant workers can always find jobs in different areas.

actually this principle was applied in the mid 1990s when the east asian markets were expanding with the 4 asian tiger economy booming. jobs were in abundance. that brought along a series of policies to restructure the economy and the efficient allocation of human resources.

the financial sector was restructured with some trades seen as unproductive and redundant. the manpower in these trades must be reallocated to more productive areas.

then came the crunch of the asian financial crisis. with many jobs destroyed by the crisis, and with as many jobs destroyed intentionally by the restructuring, we ended up with huge unemployment affecting the middle managers and professionals. displaced and unable to find alternative employment.

however, if the financial crisis did not hit, the unemployment problem may not exist as these displaced people would have found new jobs. but, this also assumed that their skills and experience are relevant and transferable to the new opportunities.

the theory was and is sound. but when there are unfavourable factors, and the assumptions of some conditions are not present, then it is unworkable.

given the current situation in singapore, many of the displaced are still having problems finding equivalent jobs in terms of income.

the ceos example is another hypothetical one where cost is not an issue and there is plenty of money to pay the newly created positions. in reality it can't be done. but there are exceptional situations where it can work. i know where it works and i think you know too.

but it cannot work in a commercial environment under the current conditions. in the golden years of 1990s, when madness got into their heads, one particular bank was reputed to have more than 200 MDs. eventually when conditions changed, heads started to roll. golden handshakes, retirements, retrenchments all were used to get rid of excess fat.

what i am saying is that the theory is sound only when the conditions are favourable.

bulikyre said...

First, I think you realize here that the issue of merging jobs and creating redundancy isn't a straightforward "bad idea" or "brilliant idea". So to dismiss the ST editorial (which I didn't read, btw) as a "joke" is a tad hasty.

Krugman frequently uses such simplified models to explain complex concepts. Of course, though, we have to understand the limitations and assumptions contained within each parable.

To that end, I think you've hit upon the two main questions:

1. Will demand correspondingly increase to meet the increase in supply of hot dogs?

Increase in efficiencies eventually leads to lower prices. If you used to buy a hotdog bun (HDB) at $10, the new system will allow you to buy the same thing at $6. Now, this means you can eat more HDBs if you want (demand for conventional HDBs increases, as per Krugman), but it also means that you may want to use your $10 to buy higher-quality HDBs instead (demand for higher-end HDBs increases).

Either way, this is how the standard of living increases in societies. I would say it's the pulse of the technology world, of how AT286 computers become Pentiums.

Therefore, while Krugman indeed simplifies, I agree that society's demands for more or better goods is insatiable.

2. Will there be jobs for these redundant workers?

Now, that's another question. Whether jobs are created in a given quarter depends on consumption trends, consumer confidence, government policies, among other factors.

Yet even with jobs created, these positions may not be what the job-seekers are looking for. You came close to the problem when you talked about finding "equivalent jobs in terms of income".

This is why the government has been emphasizing mid-career retraining. This is also why joblessness in Singapore to a good extent isn't because of the lack of jobs, but because of the job-seeker's expectations.

Krugman certainly doesn't suggest that a veteran hotdog maker will be able to make as much if he becomes a novice bun maker. In fact, our hypothetical worker may very well have to go through retraining to become a competent bun maker.

But ask yourself this: You have a portion of hotdog makers needing retraining and having to accept a lower salary. But you also have an entire country of people benefiting from cheaper and/or better HDBs. What would you choose?

redbean said...

hi bulikyre,

i agree with you that in a hypothetical situation, the concept is sound. this would also require some conditions like matilah has been screaming about. a totally free market and elasticity in supply and demand.

the best example of this is the semiconductor and electronic industry when the market is really given a free run, where value is placed on efficiency and productivity and lowest cost. that's where you see the constant innovation at breakneck speed and the products get better and cheaper by the days. and people like bill gates, steve jobs and sim wong hoo laughing to the banks, and the consumers get their best value for their money. and when old jobs become redundant, new jobs were created to replace them.

but with so much interference, monopoly, govt control, price restrictions, inelasticity in supply and demand, the theoretical result is far from achievable.

lets talk about the tour agent becoming drivers at the same time. sounds good. but the nature and demand of the two jobs are totally different. how is the tour agent going to handle tourist in busy orchard road when he probably has to spend half an hour parking his tour bus far away from his destination? then the risk of a tour agent entertaining his tourists and driving the bus at the same time.

sure everyone will love to buy cheaper hotdog or better hotdog at the same price. but one can only eat just so many pieces and so many times a week. there is a limitation on how much more demand can be generated. oversupply.

but what is important is that there must be new and better jobs for the redundant workers. that is progress. not like asking all the ex managers or supervisors to become cleaners, sweepers and chambermaids or waiters/waitresses. this is regressive.

before old jobs are destroyed, new and equally attractive jobs must be found.

and for the benefits to be real, for efficiency and higher productivity to benefit society, the market must be free and driven freely by demand and supply. not like hdb or our public tranport system.

redbean said...

the cost savings of mass production and efficient building processes, cheap labour, land acquisition at rock bottom prices etc in building hdb flats...are they pass down to the consumers?

Anonymous said...

How much new demand will there be for cheaper/better hotdogs? Sure, you can argue there's a limit to how many each person can consume a day. However, cheaper prices will also result in more individuals consuming hotdogs. Hence, whether jobs will be lost or gained from the hotdog industry remains an open question.

Even if jobs are lost from the hotdog industry, the old question remains: Is that an acceptable trade-off if HDBs can become more affordable?

Your primary objection to the combination of driver-guide roles was the creation/loss of jobs. If you want to bring in the issues of feasibility (whether they can drive and talk at the same time) and the cost of implementation, then those belong in a separate debate altogether.

Also, the appeal to have new and equally attractive jobs created is impractical and contradictory to an extent. To me, it seems rooted more in emotion than logic.

The need for retraining and paycuts arises simply because the new job opportunities come from alternative industries where the jobseeker may not have the requisite experience and skillset.

To draw from the HDB analogy again, if overall demand increases as a result of cheaper HDBs, then the former-hotdog maker may be able to leverage off his past experiences and find a good position in a hotdog retailer.

But if demand doesn't increase sufficiently, then a complete industry switch may be necessary. The smart ones will choose to enter an industry where their skillsets can still be relevant even if their experiences aren't. Others will have to start from the bottom again.

Then you may ask: If there are job losses in the banking industry, why can't the government create new jobs in the financial industry so these people can make a smoother transition?

There are a couple of reasons. Sometimes, serious job cuts in any sector are symptoms of a larger trend. Related industries will likely be affected to a certain extent. If the cotton industry in a country is suffering as a result of increased competition from India, you have to think hard before creating jobs in the domestic textile industry.

Second, job creation is part of a strategic task that seeks to satisfy growth requirements over the long-term. The objective is to build a thriving industry that will continually generate jobs by itself.

bulikyre said...

That last post was from me, as you would have guessed. This isn't a very good platform for discussion. :)

redbean said...

hi bulikyre,

ya this platform is not convenient for a proper discussion. but just as a side interest, didn't want to spend money on a forum format.

my reservation and objection to what we are discussing is mainly from the point of implementation in a social political environment. as an economic theory, in a free market condition, i will have lesser objection.

when policies are made that will have a lot of serious consequences on the well being of the people affected, that policy makers got to be prepared and better still to provide viable alternatives before introducing the change.

a similar situation can be argued in its favour. our foreign talent policy. in principle it is sound. bring in all the foreign talents and the nation will benefit from them. but the social and economic consequences on the people cannot be ignored. unless it is a conscious policy decision that the people who can't cope with the change are expendable.

the other issue is that efficiency and higher productivity do not always be translated into benefits. the hdb flats is one case when all the savings were not pass down to the people.

so there is a distinction in how we look into an economic formula. in theory in a hypothetical environment or practising it in a real environment when there are other concerns other than plain productivity.

bulikyre said...

Now, I can see what you're saying about concept versus implementation.

Let's start from the premise that the concept of increasing efficiency is sound (which you seem to agree with).

Now there are two scenarios:
1. Sound concept + Good implementation = Good results
2. Sound concept + Bad implementation = Bad/neutral results

Let's understand the discussion in this context.

1. While you disagree with the execution, does it mean that we should also dismiss the concept? If HDB building efficiencies are not being translated to cost savings for buyers, does it mean we should forget about the efficiencies altogether?

You should not -- as you have -- dismiss the concept based on your observation of the implementation. If the concept is correct, then there will be some implementations that get it right. But if the concept is wrong, what is the chance of success given the best execution?

2. To use the foreign talent scheme as an example, here's the situation:
Foreign talent scheme is sound, but leads to painful job losses for locals. Easy solution: Kill the foreign talent scheme.

To get anywhere near a fruitful discussion, we must realize that we can't just kill the foreign talent scheme because it is beneficial in the long term. So how else can we control the fallout? The government has already pushing vigorously for retraining and job matching. If you have better ideas that they haven't thought about, let's hear them.

3. Much of your argument is based on humanitarian/emotional grounds, or from looking at the issue on the micro/man-in-the-street level. If I were a Sim City dictator just focusing on making my country the most productive in the world, there would be a lot fewer headaches.

In the real world, your concerns are valid of course, but then I would challenge you to extend your frame of reference into a more distant future:

If we reject job cuts today, or if we artificially create jobs for them, or if we dismiss the importance of foreign talent today, what will happen to the country in 10 years' time?

If Singapore's efficiency and productivity suffers, then what will be the cost to the country's psyche if we have even fewer jobs in 2015? Using your frame of reference, what will be the impact on the man in the street?

redbean said...

hi bulikyre,

first point. i am not against foreign talent. it is the massive influx of half talent that is a problem. many of the jobs given to foreign half talents can be given to local talents.

my objection is not so much humanitarian or emotional. it is more on government, social justice and public poilicies. what is government for? govt should not exist for its own good but for the good of society. the govt is the power that balance and distribute wealth to the citizens. it must be a govt for the citizens and not just for its own good. the policies cannot be blindly pursue without looking at the political interest of the people.

as for the concept of one man doing more jobs, up to a point. we have seen this in practice at the higher level when one man wears 10 or 20 caps. to think that it is possible and effective is sheer arrogance. it is a kind of abuse. each man has just so much time and capacity to do so much. once exceeded, it is diminishing returns.

and often you will find the job be done in a cursory manner or other people have to be dragged in to do the job while the multi hat wearer went around happily saying yes or no with superficial knowledge of what he is doing. and pocketing 10 or 20 pay packets.

bulikyre said...

I'm not sure what exactly you mean by "half-talent". How do you even measure that against a local "full-talent"? How do you prove that we have too many such foreign half-talents?

Whether your starting position is on government, social justice or political (I think you really need to think about it), you ultimately have to weigh short-term gains against long-term ones. That, to me, is the main dilemma.

On your last point about someone doing the job of too many, I suggest you read Adam Smith's Wealth of Nations. In it, he describes a pin factory where a division of labor allows one man to do the job of thousands.

But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day; that is, certainly not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of proper division and combination of their different operations.

Merely overloading a single person with work and more work will not suffice, which is why technology, systems and processes all exist to help us do more with less.

At the same time, if someone tries to do too much and compromises on quality, then the free market ensures that he gains nothing as a result (e.g. inferior goods -> lowered prices).

Still there's a limit to increasing productivity of course, but boundaries are shifting everyday, so don't underestimate how much more we can squeeze out.

redbean said...

hi bulikyre,

to put it simply without trying to write 100 pages which will be still subject to different interpretation, lets say a foreign talent is a highly talented individual that earns $20k and above a month. the half talents are those that earn less than this sum. you may want to use $15k also acceptable. for many singaporeans who had been retrenched were once earning this kind of income.

so all the ft who earned what a singaporean can earn, are regarded as half talent. otherwise the singaporeans who used to earn this must be no talent at all. half talent will give them some face. actually all those jobs that are less than $5k or $10k can easily be replaced by the displaced singaporeans. this is a public policy flaw. not going to repeat the term used by amy khor.

too many hats or multi skills is irrelevant as one man can only do one thing at a time. train a receptionist to type, to do graphics, to be a draftsman and at the same time listen to the phone. productivity is only limited to the 8 hours and not the job of 4 trades.

if we want to push the limits further, replace all jobs with machines, automate or computerise. then place all the money of the country at gic and employ the best fund managers to invest the money.

the rest of the singaporeans need not have to work any more. just enjoy life and live on the income generated by the machines and the efficient fund managers. utopia.

people should live not to work, not to work in 10 or 20 jobs to kill themselves. people shall live life and enjoy life whenever they can. work is necessary to help them live a life they want and not live to work.

when people who have all the means to retire still think it is necessary to work till death, then something is fundamentally wrong.

bulikyre said...

To be honest, I think this discussion has reached a point where self-reflection will be more useful than debate. This will probably be my last post on this subject.

I think that your analysis of the foreign talent situation is overly simplistic. I assume it's because you don't have space/time here to go into the details, but obviously salary is only half the equation. The other half is ability.

At the same time, you have the tendency to draw analogies and make extrapolations that eventually contradict yourself. You point out the potential of machines and computers to increase productivity, yet insist that productivity is limited because man can do only one thing at one time.

You point out the relevance of machines in reducing the load on humans, yet somehow believe that increasing efficiencies means each person having to put in the effort of 10 men.

Finally, on a personal note, I hope to be able to work till I die, even if I have the means to retire early. If I enjoy the work I do, and am still able to contribute, then why not? There's nothing "fundamentally wrong"; it's just another way. I think it's very Asian to think about retirement bliss, but a mind is a terrible thing to waste.

redbean said...

bulikyre,

if you look at the issue strictly from an economic point of view, it sounds very logical but very confined. i am looking at it from socio economic and political perspectives. this will complicate the issues in many ways and not easy to discuss thoroughly here.

applying public policies purely on economic principles can be too harsh and untenable. just look at the problems from privatisation and profit making motive. it is very sound that all organisation must run for profit. this itself is also not true as some state organisations are just not for profits. and those essential services when push for profits, will undermine the goodness of the govt.

my analysis on foreign talent is not as simplistic as you have mentioned. a purely foreign talent policy will mean sacrificing the interest of many citizens. that is why there is always protection in every country, even america and japan. there is no perfectly free market to talk about. if our govt is to implement its policies under a completely free market condition there will be a rebellion.

the skills training that you are referring to is not really a solution when people's jobs are destroyed. there is a social and big political cost involved. economic theories cannot be applied in a vacuum.