Jamus is concerned about rising prices.
23 hrs ·
On Thursday, house visits by
#TeamSengkang managed to wrap up 351D
#Anchorvale, after having started on the block the week before. A number of conversations this week, as well as last, drifted toward challenges faced in the cost of living.
There is no denying that prices have risen across the board, and many households are finding it harder to afford basic necessities. Inflation hasn’t quite let up, with the latest numbers indicating that prices are 5.4 percent higher than the same time last year. Even core inflation—which, in the Singapore context, strips out the more volatile elements like transport and housing—bounced to a ten-year high in March. However one slices it, stuff is getting more expensive.
As an economist, I understand that many of the drivers of rising prices emanate from abroad: war in the Ukraine (which has led to spikes in the price of fuel and food), new COVID-19 waves in China (which has led to a prolongation of supply chain disruptions), and tight labor markets and shifting expectations about the nature of work (which leads to elevated wage demands). This last factor but has economists most worried. While wages have kept up with inflation thus far, they have been growing slower. Real wages—your salary taking into account inflation—grew by 2.1 percent in 2016-21, compared to 3.1 percent in the prior 5-year period. And although real wage growth is a good thing in general, when salaries keep ratcheting up, there is a risk of setting off a dreaded feedback loop, where rising wages prompts businesses to hike prices, which in turn renews calls by workers for higher wages, and so on.
The MAS now expects that inflation will range between 2.5 and 3.5 percent, a half percent increase from the previous 2–3 percent range. But this increment belies the reality that many families face (and is why Mom complains about every time she returns from the market). It is more expensive when we tapao from the hawker center, when we catch a bus or book a ride, and when we pay for utilities bills. These components have all not let up in recent months, and are actually growing at higher rates than just the average of 3 percent.
We’ve had several debates, in Parliament, about appropriate policy responses to inflation and rising costs of living. The government’s response, in the main, has hewed to a wait-and-see approach. This reflects, I think, their belief in the virtue of exercising caution and patience: this would allow inflation pressures to subside, for fiscal measures to come onboard, and for monetary policy measures to pass through.
I take a different view. I believe that we should be pulling policy levers that have the potential to have an immediate effect. People are hurting now, and need help today. If these aren’t efficient in the long run, remove them after relief is afforded. These include allowing faster SGD appreciation, offering petrol tax cuts (especially for those who drive for a living), and committing to not increasing GST until the economic coast is clear. The
#workersparty has raised such common-sense proposals in Parliament, and will continue to do so.
