3/01/2010

Productivity at its lowest ebb

For the past decade or so our productivitiy has reached a point of zero, save only by the influx of foreign workers. They contributed to practically all the growth numbers to our economy. Taking them out of the equation our growth is zero, yes zero. That's why everyone in the know is so grateful to the foreign workers. I am not going to ask what have the supertalents contributed if our growth came from the low down and poorly paid foreign workers. Now we are going to increase or boost productivity. And it seems so simple, a few training courses will do it after languishing for all these years. I think there are easier ways to improve productivity than training courses. Just follow the examples of the property industry. Every 4 or 5 years, the price could be double. That should be the kind of productivity numbers we be looking for. How to go about it? We used to call it asset inflation. But there are many areas that we can inflate the prices, the consumers just pay. By increasing the prices of things and services here and there, productivity will simply go up proportionally. A plate of char kway teow can be increased from $3 to $3.50, giving a 17% increase in productivity without having to do anything except changing the price tag. Some measures could be more ingenuine, like erecting another few toll gates and money will keep rolling in. That is productivity. One thing that will reduce productivity and should not be thought of is pay rise. Any increase in pay will definitely lower productivity unless there is also an increase in goods or services produced, or increase in price. The latter must be more than the hike in pay. Whenever the rental goes up, the stall holders simply raise their prices, several percentages more than the rental hike. So the productivity of the landlords and the stall holders also go up disproportionately. Now we can understand why stallholders are not complaining. They constantly raise their productivity to improve their income. I must add that this kind of productivity growth is only possible in a monopolistic or near monopolistic environment, or insular market when supple and demand can be managed.

12 comments:

Wally Buffet said...

Hehe, you wanna know why productivity is zero? Engineers, lawyers, administrators, accountants all becoming property agents that's why! Easy money in today's market. Every Ah Kow and Ah Huay wants a bit of the action. Or everyone dreaming of feeding others at hefty prices which they can increase as and when they like when their food gets a following. And Case? Hardly a whimper don't you think? The mentality of Singaporeans also to be blamed. There is no concerted effort at a boycott. The friggin' so called opposition politicians are also nowhere to be found. In fact they may just be tucking in themselves and price increases be damned!

Chua Chin Leng aka redbean said...

I was reading this little debate in a Facebook entry between a new resident, Sinha Shekhar and a local, Tiong Siong. It is very clear that the new resident knew why Singaporeans are not productive. And he has this advice for Singaporeans, go make yourself more productive, ie get paid less and work harder.

Of course Singaporeans are damn piss off by such comments given the high cost of living, family commitments and their national service obligations which took away two years of their precious life. And now they have to face foreign competition and listening to their well meaning advice that Singaporeans basically need to buck up if not the foreigners will just take over their jobs.

Replacing Singaporeans with foreigners is the most productive thing to do.

Wally Buffet said...

Coming back to the question of property agents. Have you ever wondered why none is a foreign talent, PR or new citizen but Singaporeans? Doesn't it tell you something. We want the soft option. Make good bucks without much effort. Just distribute some flyers with your mugshot and presto, once you hit on someone who wants to buy or sell his HDB, you'll in the money!

Years of smug and comfortable living, spoilt by a nanny state has made us less competitive, less hungry and more complacent. Fellas, the world don't owe us a living!

Anonymous said...

Increase productivity in work, procreation except in pay. Increase in prices of everything edible or not at regularity unheard of in other countries.
Upskilling and upgrading in works only to get the more experienced and long serving staff retrenched or terminated.
The VICIOUS CYCLE have repeated a few rounds already. How many more rounds do they want ?????

Robert Tan said...

I think that allowing or in certain circumstances, perhaps even encouraging foreigners to come to live and work in Singapore may not necessarily be all bad.

Very broadly, there are probably 2 categories:

1. the highly skilled professionals/high level managers/executives; and

2. the "lower- cost" blue-collar workers.


Many countries realise that Category 1 can contribute significantly to their country/economy and they are not just sought after in Singapore but in many other countries in the world as well. On a net basis, this category probably contributes significantly more than they "take-away" from a country. A simple example is a highly qualified professional who is highly trained, with relevant work experience but is still relatively young. The "cost' of training such a person has already been incurred and he/she is at a very productive stage of her life. All else being equal, such a person is a plus to the economy of a country. If he or she is in a profession like a doctor, the contribution could be more than economic.

This is looking at the immigration side. Conversely, it will be a loss to Singapore if there is a brain drain/talent drain of such category 1 people to other countries.

Singapore is not the only country that benefited from the influx of these foreigners. America itself(and probably many other countries) have benefited from the influx of the best brains/talents from other countries as well.

2. The 2nd category is the "lower cost" workers. The contribution from this category may be lesser in direct terms but they too contribute because:

a) certain jobs that locals do not want to do may still have to be done;
b) if someone else can do the job at a lower cost, assuming that the locals can do some other job that is higher value added, all else being equal, the net is a plus. For example, a couple may hire a foreign domestic worker so that both the husband and wife can continue with their careers. On a net basis, the cost of hiring a domestic worker is positive, especially if both husband and wife can draw significantly higher incomes as compared to having one of them stop working to stay at home for domestic chores. This is a simplified illustration.


I used the phrase "all things being equal" because as in most things in life, there are pros and cons to everything(which makes life more complicated). I won't go into the cons, some of which have already been mentioned elsewhere as the purpose of my comments is just to highlight the other side of the coin(the pros).

Therefore, there need to be a balance. Perhaps we have swung too far and too much in too short a time in taking in foreigners to aid growth and we just need to let the pendulum swing back somewhat now. However, we should be prepared to still take in foreigners on a selective basis and I believe this will probably be so without me having to say it.....

Wally Buffet said...

Robert,

The pendulum has swung so far out that it has flown out of the grandfather clock and hit many heads, many heads........until we are all bleeding from this sudden economic violence!

Everyone knows that importing talent pool and the worker bees is good. But doing so to the extent that it hurts the local citizens? Now that's bad, nay, that's insane!

Chua Chin Leng aka redbean said...

Hi Robert, I think in general people agree with the policy of have foreign talents, especially the very talented ones and the low skilled labours. There are two main concerns. One, how many more heads can this little rock takes before it sinks by its own weight? Metaphorically of course.

The second pain is the influx of average talent to replace our middle level talents. Many have been forced to depart to foreign land and are very bitter of it. Many foreign talents in the middle rung need not be here to replace our own people by their sheer lower pay expectation. We need to look after this bulk of our citizens. Just converting foreigners to new citizens is a lie that still hurts.

The native have sacrificed much for the country through several generations. The country owes them a blood and sweat debt for going through tough times and sticking together to get this far. Don't be ungrateful to your own people.

Robert Tan said...

Wally/Redbean

I note your comments and as I mentioned, although I don't have the actual data, my gut feel is also that the influx needs to be slowed down, probably significantly until the current numbers can be "digested". With a smaller influx, hopefully the selection can also be more targeted.

And Wally, your comments still continue to be quite "funny" - and I mean it in a positive sense......

Wally Buffet said...

Hi Robert,

Nice to see you around after a few days absence.

Yeah, I try to lighten the load of a heavy day for most of you with my simpleton comments. No heavy stuff. Hope our host Redbean is not too pissed off with me.

Hehe.

Matilah_Singapura said...

The proble with "macro" statistics is that it looks at the whole, and may not be accurate.

Productivity is personal and individual. Some people are better than others at creating value. Some firms are better than other at creating wealth.

At the end of the day, what do the financial statements say? i.e. Are you making money?

Anonymous said...

Foreign talents helping nations to improve productivity and wealth ??
The US is wellknown as a melting pot for having open door for foreign talents.

How' America today ?

What will be it(US)'s tomorrow ?

Chua Chin Leng aka redbean said...

I think we are caught by surprise again to know that our productivity has been dropping all these years.