Home > Economics > Just a thought: Economists; argumentative and combative

Just a thought: Economists; argumentative and combative

I am in no position to debate the finer economics in Dr Lim Chong Yah’s ‘drastic’ proposal. But I do resonate with his desire in combating and arguing for the greater cause, a common trait among economists I dare say. In case you missed the article on Dr Lim’s rebuttal of those who claimed his proposal as ‘unfeasible’:

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SINGAPORE: Former chairman of the National Wages Council Professor Lim Chong Yah has issued another statement to clear up what he describes as “fallacies” over his wage restructuring proposal.

He said the “Shock Therapy” between 1979 and 1981 in fact, resulted in a higher GDP growth rate for Singapore.

“Official statistics show Singapore had an average of 6.4 per cent real growth rate per year from 1974 through 1978, the quinquennium before Shock Therapy I. They also show that the quinquennium that followed, covering the three years of Shock Therapy I and the two years following it, the average real GDP growth rate was 9.2 per cent per annum, a figure which is much higher than the preceding five years of 6.4 per cent per annum,” said Prof Lim.

“Do not the comparative figures indicate the overall economic success of ER I or Shock Therapy I? No doubt about it.”

He added it is also wrong to say that the 1985 – 86 recession was triggered off by the Shock Therapy of 1979 – 81.

Prof Lim said his research showed that “the recession was regional, not national, Singaporean only”.

He said his hope is that “future discussion on Singapore’s recent economic history will not repeat the above two fallacies now used to oppose the wage adjustment advocacy” of his wage restructuring proposal.

Prof Lim had proposed that the pay of low income workers be raised by 50 per cent over the next three years and that the pay of high income earners be frozen during the same time.

He had explained that this will narrow the income gap and force companies to raise productivity.

Several government leaders have raised concerns over his proposal, saying that wage increases should be in tandem with productivity gains.

– CNA/cc

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When the past old guards of Singapore like Dr Lim and even the former Permanent Secretary Lim Siong Guan Ngiam Tong Dow (read up his book “A Mandarin and the making of Public Policy” if you have time) speaks against the current policies helm by the PAP government, it speaks great volume.

On one hand, we have a government who don’t have the vision and courage to implement ‘drastic’ moves to help those who were left behind. On the other hand, the government has no qualms allowing the cost of living in basic needs like housing and transportation to rocket and to deteriorate. How does the government expects to yield better results if they are always doing things the same way?

How much can assisting the lower income cost? Let’s say 10% of the Singaporean population (excluding PRs, if you will) belongs to the poor category, that would translate to an estimated 300,000 people, and they earn $800 a month. A 50% increase would mean increasing $400 to $1,200 over 3 years. Even if the government is to pick up the tab, it’ll only cost $120 million over 3 years to help those in need—-a fraction of the $1,100 million (and I am not even adding on the ‘shared $900 million tab to repair and maintain the railways’) given away to SBS and SMRT. While I do not advocate freely giving away money, I don’t understand why are the government ministers so stingy on small expenditures like these while they are gambling hundreds of millions upon billions away in Temasek and GIC.

The productivity argument by the government is fine. I have argued for pushing up productivity in my other post. However, we need to be realistic on low-skilled work like drivers or labor workers (thus my support for minimum wage in my other post). There are certain jobs that productivity is contained by the nature of the job.  Take for example, bus drivers. How on earth do you expect bus drivers to be more productive? Drive longer hours and risk death? How about creating auto driving bus or robots that drives?

The fact that SBS pays such a low wage of $1100-1300 basic for their bus captains for 12-13 hour work days for the past few decades is a joke. In typical PAP fashion, they push the blame on Singaporeans saying they are unwilling to work for that wage in order to justify hiring from China (why China of all places??? are the wage so low that even Malaysians are avoiding them?). After the government shamelessly used tax payer’s money to buy new buses and trains, hire new bus/train captains from some country side in China where the natives can hardly spell ‘Singapore’, and even throw in more cash to repair and maintain the railways, SMRT has the cheek to announce dividends. Doesn’t dividends signify the well-being of the company? If so, why are tax payers’ money used again and again to bail these government controlled ‘private’ companies? If they are able to generate profits and dividends, I don’t understand why is the PAP government so bent on transferring national wealth to these companies without consultation with the citizens. Can this be considered abuse of power?

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Categories: Economics
  1. Tea-Party Member
    May 3, 2012 at 4:01 am

    So much is being said about Mr Lim’s “Shock Therapy”. Actually what is really needed is a “Shock Therapy” for the ruling party at the next elections. Shock them out of the condescending complacency by voting the PM, MM & ESM out, just like the brave people of Aljunied did.

  2. Julia
    September 27, 2012 at 11:09 am

    The book “A mandarin and the making of public policy” is the work of Ngiam Tong Dow, former perm sec and not Lim Siong Guan

    • November 4, 2012 at 6:00 pm

      Yes, you are correct. Thanks for pointing out my typo error. 🙂

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