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How did we end up like this with all the top talents in the government who have helicopter vision and over the horizon radar?
U.S Labor Dept: Singapore has steepest productivity decline and lowest increase in hourly wages in 2007 ¨C 20According to a shocking press release from the <leo_highlight style="border-bottom: 2px solid rgb(255, 255, 150); background: none repeat scroll 0% 0% transparent; cursor: pointer; display: inline; -moz-background-inline-policy: -moz-initial;" id="leoHighlights_Underline_0" onclick="leoHighlightsHandleClick('leoHighlights_Underline_0')" onmouseover="leoHighlightsHandleMouseOver('leoHighlights_Underline_0')" onmouseout="leoHighlightsHandleMouseOut('leoHighlights_Underline_0')" leohighlights_keywords="u%20s%20department%20of%20labor" leohighlights_url_top="http%3A//shortcuts.thebrowserhighlighter.com/leonardo/plugin/highlights/3_1/tbh_highlightsTop.jsp?keywords%3Du%2520s%2520department%2520of%2520labor%26domain%3Dforums.delphiforums.com" leohighlights_url_bottom="http%3A//shortcuts.thebrowserhighlighter.com/leonardo/plugin/highlights/3_1/tbh_highlightsBottom.jsp?keywords%3Du%2520s%2520department%2520of%2520labor%26domain%3Dforums.delphiforums.com" leohighlights_underline="true">U.S. Department of Labor</leo_highlight> last year, Singapore experienced the steepest decline in productivity among 17 developed economies in the world in the years 2007 ¨C 2008.
Not only that, it had the lowest increase in the hourly compensation per unit labor cost and one of the highest increase in manufacturing unit costs as well.
The detailed article was not reported by the Singapore media. Neither was it mentioned by Finance Minister Tharman last week which would have greatly embarrassed the PAP government.
Steepest productivity decline
Among the 17 countries, the Republic of Korea and the United States had the largest increases (1.2 per cent each) while Singapore had the steepest decline
Second highest increase in manufacturing costs
Singapore has the second highest increase in manufacturing! unit costs when the figures are expressed in national currency units at 7.5per cent after Denmark¡¯s 8.3 percent:
Lowest increase in hourly wages
Hourly compensation in manufacturing increased in 2008 in all 17 economies. The largest increase was in Norway (+ 5.6 percent), followed by Spain (+4.8 percent).
Singapore has the lowest increase at only 0.5 percent:
Second highest increase in the number of manufacturing hours
In 2008 total manufacturing hours worked fell in 9 economies with the greatest decline in the United States at -3.9 per cent. Denmark has the largest increase at +2.7 per cent followed by Singapore at +2.6 per cent as shown.
Analysis
Singapore¡¯s dismal performance in labor productivity is a direct result of the ! PAP¡¯s short-sighted liberal immigration and pro-foreigner policies which help companies take the easy way out keeping labor costs down artificially by employing cheap foreign workers instead of investing in innovation and research to boost productivity.
As noted in the graph below, Singapore¡¯s labor productivity took a plunge from 2004 onwards when the inflow of foreigners started to pick up:
This coincided with the beginning of Prime Minister! Lee Hsien Loong¡¯s tenure when he announced his ambitious plan to incr! ease Singapore¡¯s population to 6.5 million people by 2030 via immigration.
Foreigners now make up more than a third of Singapore¡¯s workforce. The proportion is probably higher in the manufacturing which accounts for the low increase in hourly wages and second highest increasing in the number of manfacturing hours.
As foreign workers, especially those who are unskilled, are usually poorly trained, they contribute partially to the increase in manufacturing costs.
Instead of coming up with a comprehensive policy to reduce Singapore¡¯s reliance on foreign workers, boost productivity rates and to safeguard the interests of Singapore workers, the PAP chose the easy way out by opening the floodgates to foreigners which ! temporarily help to keep labor costs low and keep the GDP growth figures artificially high.
(An unknown percentage of the PAP ministers¡¯ multi-million salaries is pegged to GDP growth ¨C the higher the figure, the more money they bring home.)
The few measures put in place such as the foreign worker levy and dependency ratio hardly deter companies from hiring foreign workers.
It doesn¡¯t help that Singapore has an extremely lax criteria for PR application. The Home Affairs <leo_highlight style="border-bottom: 2px solid rgb(255, 255, 150); background-color: transparent; background-image: none; background-repeat: repeat; background-attachment: scroll; background-position: 0% 50%; -moz-background-size: auto auto; cursor: pointer; display: inline; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" id="leoHighlights_Underline_1" onclick="leoHighlightsHandleClick('leoHighlights_Underline_1')" onmouseover="leoHighlightsHandleMouseOver('leoHighlights_Underline_1')" onmouseout="leoHighlightsHandleMouseOut('leoHighlights_Underline_1')" leohighlights_keywords="ministry" leohighlights_url_top="http%3A//shortcuts.thebrowserhighlighter.com/leonardo/plugin/highlights/3_1/tbh_highlightsTop.jsp?keywords%3Dministry%26domain%3Dforums.delphiforums.com" leohighlights_url_bottom="http%3A//shortcuts.thebrowserhighlighter.com/leonardo/plugin/highlights/3_1/tbh_highlightsBottom.jsp?keywords%3Dministry%26domain%3Dforums.delphiforums.com" leohighlights_underline="true">Ministry</leo_highlight> revealed last year that two out of every three PR applicants are successful, an astonishing high rate for a developed nation.
The Professionals/Technical Personnel & Skilled Worker scheme (or simply& PTS scheme) is the easiest and most assured route to Singapore PR. It¡¯s estimated that more than 90% of the people obtain their Singapore Permanent Residence through this scheme.
The key requirement under this scheme is that a foreign worker must be working in Singapore for at least six months on either an Employment Pass, Entrepreneur Pass, or S Pass.
Since the dependency ratio lumps both citizens and PRs as ¡°resident¡± workforce, a company can circumvent the rules by simply getting earlier arrivals of foreign workers to apply for PRs and transferring them into the ¡°resident¡± pool, thereby freeing up slots to employ more foreigners.
Theoretically, it is therefore possible for a company based in Singapore to employ 100 per cent foreigners with no Singapore citizens on its payroll.
The foreign worker levies for various types of visas are also ridiculously low, amounting to no more than a couple of ten of dollars. Even with the recent hike in foreign worker levy, it is still more ¡°profitable¡± for companies to employ foreigners as they do not have to pay them CPF. Besides, the slightly increased labor costs can be easily transferred to the workers and consumers.
The PAP government has to accept full responsibility for Singapore¡¯s low productivity rate. Prime Minister Lee Hsien Loong now wants to increase Singapore¡¯s productivity to 3 per cent per annum. How is this possible when our productivity rate has been decreaasing for the last three years with the largest dip of 6.6 per cent in! 2008?
DPM Teo Chee Hean still got the cheek to give himself a pat on his back by praising the ¡°progress¡± made by previous productivity drives:
¡°We have made good progress in the past in our productivity drive and that is why we have been able to move our economy forward and have good jobs for many Singaporeans. But this is a constant effort and we have to renew and re-double our efforts,¡± he was quoted as saying in Channel News Asia on 28 February 2010.
What ¡°progress¡± is DPM Teo referring to when Singapore¡¯s productivity has grown by only 0.7 per cent in the last decade? What ¡°good jobs¡± did the PAP create for Singaporeans when they have to compete with directly with foreigners who cost much less than them? Does he know what he is talking about? Can Singa! poreans trust him to chair the National Productivity and Continuing Education Council to spear-head Singapore¡¯s productivity drive as outlined in the Budget?
The crux of the problem lies in Singapore¡¯s export-based economy and its perennial addiction to foreign labor, compounded by the fact that it still has not managed to make a successful transition from a manufacturing to knowledge-based economy.
Unless Singapore¡¯s structural and political economy is completely revamped, there is no way Singapore can ever hope to boost its productivity, let alone increase the wages and decrease the working hours of its long-suffering workers which will lead to other social problems such as low birth rates, exodus of local talents to greener pastures overseas and an eventual erosion and loss of national identity.!
The PAP should realize that it is the biggest stumbling block to reforming Singapore¡¯s obsolete, uncompetitive and monopolistic state-capitalist economic system. We are doomed to mediocrity so long it refuses to relinquish its tight-fisted control over Singapore¡¯s economy and allows the private sector to grow and flourish independently.
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