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4/27/2012

When the boss gets a wage freeze…



Fear is spreading like wild fire among the SMEs that the recommendation of Lim Chong Yah is going to raise the cost of doing business here. The 3 year 50% wage adjustment will be very costly. Sure. But can this be offset by the 3 year wage freeze of the top management? Lim Chong Yah’s proposal is like Robin Hood, robbing the rich to pay the poor. Not pay the poor and pay the rich more.

How much does the top management get for their pay rise, visible and invisible, ie cash, perks, bonuses, share options etc etc? Assuming a CEO gets $500k in pay hike, plus an unspeakable sum of shares which could be another few hundred thousand, or say $200k, these would give a total pay increase of $700k. This amount can easily be translated into a pay hike of $1000 pa for 700 workers without adding more cost to the company. And if one is to add the top 20 or so management’s pay hike, the total could easily be a million or two, which means more employees could benefit from this transferring of wealth.

I know that the numbers are very simplistic, but still reasonable and real. What is so wrong about it? It is wrong only when the increase at the lower half is not accompanied by freeze at the top. Sure, they will be very unhappy and want to quit and look for more well paying jobs with more increments.

The company can take the opportunity to cut cost at the top and bring in fresh blood that is younger and more energetic to fill the empty seats. Can or not?

10 comments:

Anonymous said...

Yike...no way that standard of living for the elites can be reduced.

Anonymous said...

buay huey tiah or tiah boh.

Anonymous said...

If oni they think n work like U,
But they don't.

Matilah_Singapura said...

At the end of the day, the owner(s) of the SME calls the shot.

If crazy economics academics (i.e. don't know how to make money, can only teach in a govt institution and talk big) get to dictate govt economic policy, perhaps better pack up the SME and move to somewhere else where the govt will leave you alone, or you can be buddies...hmmmm...Vietnam, Myanmar?

The Golden Rule:

"He who has the gold makes the rules".

Sorry lah. Econs professor, carry on working in your govt J.O.B. (Just Over Broke) so you can at least have a meal tonight.

Anonymous said...

Nowadays, to be a Robin Hood, robbing the rich to help the poor is an almost impossible job. It is much easier to be a Robin HOOK, that is to rob the poor to benefit the rich! hahaha....

Anonymous said...

" Sure, they will be very unhappy and want to quit and look for more well paying jobs with more increments.

The company can take the opportunity to cut cost at the top and bring in fresh blood that is younger and more energetic to fill the empty seats "


Sounds like a good idea for all the Ministers in the Prime Minister's Office.

How many already ah?
I lost count and interest after five.

agongkia said...

I find Professor Lim humourous.

Chua Chin Leng aka redbean said...

I think he is disgusted and frustrated by the social injustice in the system and wanted a thorough overhaul.

Nero will not care a dime if Rome burns as long as he has his ill gotten wealth stashed away to live in luxury for the rest of his life.

Matilah_Singapura said...

>> Nero will not care a dime if Rome burns as long as he has his ill gotten wealth stashed away to live in luxury for the rest of his life.

It is prudent to make contingency plans for natural and man-made disasters. Why this is thought to be "evil" I'll never know.

Whether you get the wealth fair and square or it is "ill gotten" is irrelevant here.


>> social injustice <

This is a mythical idea. No such "thing" exists. Justice is a personal affair, not a social one.

I'm just keeping it real.

Chua Chin Leng aka redbean said...

There is no nothing. Everything is a farce. The only truth is self interest. This is the only real thing.

Ok, happy?