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4/17/2012

Lim Chong Yah’s model no productivity

The main bug bear to Lim Chong Yah’s shock therapy is productivity. It is logical that before one raises the wage of workers, one has to take into account many factors, competition, costs and of course productivity. How can anyone think of getting big pay hike without complimentary productivity? The raising of worker’s income is a very serious matter and much deeper understanding and thoughts need to be put into it unlike bloggers like Redbean who would post anything that appears in his mind and in 5 minutes it is in mysingaporenews. No depth, no analysis.

I think the good professor must have spent many hours seriously contemplating on the problem and the solutions. It is not a wild shot. It is definitely a serious proposition that is supported by economic and academic considerations. An economics professor of his stature does not spout nonsense like bloggers, and his proposition should at least be placed on the tables for serious discussions. Bloggers can freely criticize anything without thinking. But to criticize the works of an economics professor who has done deep thinking before coming out with his recommendations, due diligence is needed from anyone who would want to dispense his criticism to do justice to the professor. Be respectful. Put in some effort to understand what the professor was saying before shooting off the hip.

Productivity may be an important factor in raising wages. But in the real world, wages or salaries can be raised by using other factors and considerations other than productivity. One standard methodology is to do a market survey and compare job values. And jobs of similar values should be paid similar pay. So when one is paid more, the other also must be paid more. This method is silent on productivity. It just says since you got so much, I also want to be paid so much.

Another way is to peg one’s salary to other people’s salary. Just assume one’s job is more important than others. So if other people earn more, one’s income will also go up accordingly. No need to talk about productivity. Just wait for the more talented and enterprising to work harder, to earn more, then one just tag on the bandwagon. When other people earn more, one must also earn more. What’s the correlation? Beats me. Where is the element of productivity? Who cares?

Oh, productivity is meant only for workers. Workers and farmers really produce goods of value and thus their productivity is important. When one’s job does not produce anything of value except talking cock, there is no need for productivity? Productivity is irrelevant to raise pay in such cases.

15 comments:

Veritas said...

I would like to contribute to this discussion as I spent years researching about relationship between productivity and wages.

To put it in layman's term, the real productivity of our workers has on average improve at least 20x in most sector for last 20 years. For example, 20 years ago, the job of one hundred person can be replaced today by just secretary.

The ability of today's secretary is simply unbelievable. Let take a look at sending out a document. Before, it took 1 person to type, one person to send documents to post office, probably a significant team size of post office staff to ensure safety delivery.

Today, a clerk can do this job within 5 minutes in from of computers, by a click on the SEND button of email client.

Before, it probably take more than a hundred of people to plan logistic and ensure inventory. Today, a clerk is able to do the 100 man job by SAP.

80 years ago, a building that needs 10000 person to build manually. Today headcount can be reduced by 99% simply with the use of bulldozer, cranes.... etc and all sort of modern technologies.

Now, we are generating so much wealth. By right, today, everyone should only work 3 hours a day, and we could have more than enough. The clerk today is able to replaced least 50x of people 20 years ago. How come she is now much more poorer.

Has her house 50x bigger. Did she work shorter hours? On the contrary, life is only much tougher for her today.

To cut things short, all productivity gain were being stolen by elites through various form of financial engineering too long to explain here.

The only way to claim back our rightful wealth and increase salary is not by being more productive. It is by showing the elites the guillotine.

These elites, these maggots deserve to die 1000 times.

Anonymous said...

It baffles me no end when the Good Prof Lim came out with his belated(others had suggested the Idea way before him) suggestion. But, maybe becos he was incharged of National Wage Council that planned and implemented Wage Structure for about 20 years, he is well-known to Sinkies.

Come on! What leads to the situation today? Since the Day me dropped out from secondary school in the mid-sixties or even when me was a student, PRODUCTIVITY had been a BY-WORD.

How were/are angmos paid in the past and in the present? Work is defined; if me may borrow from Matilah Singapura's Scientific Theorem, the amount of energy used over time to do a job. Then of course we have to add in the skill level and proficiency. Angmo skilled labourers are highly paid for their works and services. Far more than those in clerical/administrative jobs.

Anyway, me just can't believe that an eminent professor or any normal intelligent folk does not understand productivity. IT IS MORE A CASE OF KNOWING THE DEFINITION OF PRODUCTIVITY THAT SINGAPOREANS FEEL SLAVE-DRIVEN BY THE RULERS.

HOW DOES ONE DEFINES PRODUCTIVITY BETWEEN A LOCAL AND A FOREIGN WORKER?
A FOREIGNER GETS PAID MOST LIKELY LESS THAN ONE FIFTH(add in currency rate) DOING THE SAME JOB IN HIS/HER OWN COUNTRY DOING THE SAME WORK.

DOES THE INCREASE IN THE INCOME OF THE FOREIGNER HERE MAKES HIM/HER WORKS FIVE TIME HARDER?

Me am a secondary school dropout, so do be forgiving if i sound like a moron.

patriot

Anonymous said...

@Veritas.
Your passion for social justice is commendable.
Please just be careful of violent imagery.

Focus on opening up minds and votes. This is what really matters.

Please consider avoiding unnecessary side skirmishes.

Anonymous said...

If they can peg their $$$ pay to other enterprising people just by talking cock, they deserve getting that kind of pay as they have the super talent to convince. And if they can convince the daft to be even more productive before a pay raise, all the more reason to pay themselves even higher for the increase in GDP. All economic gains come from their talent; whether it is to get the daft to work harder or to bring more foreign talents to work here.

Anonymous said...

Pay your workers as little as possible while grab as much profits for your own pockets as you can... If the locals complain wages not enough to pay for basic living let alone to even contemplate a 30 year loan for that pIgeonhole in the sky, just bring in cheap foreign workers no problem. Unrestrained greed starts at the top.

Anonymous said...

When they said, high income gap is normal...

When they said, $1000pm enough to buy HDB flat...

When they said, small flat is good...

When they said, $50k pm not enough...

You know what is in their mind.

Anonymous said...

Professor Lim must have realised too late for comfort the selfishness of the PAPies selfserving and self preservation policies of the Party at the expense of the country at large and ultimately to the detriment of the people and the island state. What constitutes the Party's productivity? It is just talk, talk and more talk, bluf, bluff and more bluffs and twisted facts and data. At the end of such hubris they believe that they deserve to award themselves high insane salaries of millions of dollars.

Productivity will only increase and cost of living will come down only if the ministers really do more work and talk less and do some of the follolwing things. No ministers pay be it the president or prime minister should receive salaries higher than any of the presidents or prime ministers in any country in the world or more than half a million Singapore Dollars which ever is the lesser. Similarly that goes for all heads of government departments and CEOs and directors of all government linked companies. Bring down GST to three per cent because this indirect tax is grossly unfair and hurting to the people at large generally the poor and middle class the unemployed, the retirees and even babies and unborn child. COEs and ERPs are greatly abused by the authorities to falsely enhance productivity and high revenue income for the government. Cut down on COEs and ERPs and shut down all ERPs from 5.00pm in the evenings because it is sheer madness and insanity to tax people for going home after work. Stop subsidising companies too big to fail. The major shareholders of SMRT and SBS I read in the papers are Temasek Holdings , GIC, Bank of America and Citi Bank. Why pay these companies 1.2 billion dollars to buy new buses. Why can't these companies use the operation profits to pay for the new buses. Are the CEOs and directors going to further increase their already obscene high salaries and to increase the dividends of the major shareholders. If the above suggestions are sincerely carried the cost of living will definitely go down to every one's benefit.

Southernglory1

Anonymous said...

When a minister stops running a ministry, is his productivity up or down?

Anonymous said...

I don't know about the minister's productivity.

But if we stop paying his salary, Singapore's overall productivity should go up.

Less inputs (salary).
Same or more output.

Padaly said...

Lol! You are implying that the workers are being explioted? Its part of a modern capitalist society!

Padaly said...

You are correct Patroit. You are no morons though the rulers would really want us to be!

Padaly said...

Bravo! Gd points!

Anonymous said...

Thanks You Padaly, You are encouraging.

Read Your Latest Blog and concurs very much with the Facts contained therein.

The wayang(acting) being played out may excite many but the idea of minimum wage without bringing down inflation simply does not benefit anyone. Me am more inclined to blame the inflationary policies than the wage itself despite the latter being a cause for concern too.

In any case, minimum wage suggestions were made sometimes back and they did not get so much attention.

In my memory, when the Ministerial Pay Debate was hot potato, we heard nothing from any Wage Specialist. And similarly, when Minimum Wage was hotly examined and discussed in Blogs.

Cheers!

patriot

Anonymous said...

Just tie the Minimum wage to the Ministers' pay.

Anonymous said...

That's a good benchmark. The Workers Pary did suggest the other way round and that is pegging the Ministers' pay to a certain multiple of the lowest income group.