4/17/2007

Something gotta give

The pay hike in the public sector will push the private sector to follow suit. The only limiting factor will be the bottom line. In the private sector, pay hike can only be sustainable when the organisation is making money and not because someone else is paying more. Then we have the rise in rental in commercial and residential properties. And we have our famous GST increase plus all the increases. Suddenly no one is asking whether we can be competitive when everything is going up. Can we compete with China and India with our rising cost? Or we have a magic formula that says cost is no longer an issue and we can continue to raise our operating cost and remain competitive? I can only see foreign workers and FTs playing a greater role in our economy and at the expense of our citizens. Something gotta give. The investors have voted with their feet in the past. And they will do so again. And if Malaysia plays its cards right with the IDR, more companies will relocate. The slack may be taken up to some extent by the IRs. Would we face the same predicaments when job losses were the order of the day? Or would the pay hike brings about more talented solutions to our past problems when the world economy swings the wrong way?

4 comments:

Anonymous said...

What a load of hogwash. Since when has private sector initiatives been determined by civil service policies ?

redbean said...

when the pay has gone up, generally everyone will level up. the applicants are also comparing the salaries offered and employers would have to be competitive as well. it goes down the line.

Matilah_Singapura said...

> The pay hike in the public sector will push the private sector to follow suit. <

Perhaps, but not necessarily. Not everyone who applies for a govt job will get it, and not everyone will apply for a govt job.

The private sector operates in a DEMAND economy, where revenues and commercial activity are demand driven by the wants, needs and desires of consumers.

The public sector operates as a COMMAND economy where the govt determines what services to offer and how much to pay its staff.

When pay rates get too high in the private sector, firms cut back the hiring and relocate overseas where labour is cheaper.

OTOH, govt pay can go as high as the govt determines. A command economy operates by FORCE. A demand economy operates by VOLUNTARY association.

redbean said...

fully agree with you this time matilah.

i command, i demand against the customer's choice.