Does Singapore need Economic Restructuring II?

[Bibi]

Thorughout history, with the exception of communist era, the rich always have the loudest and only voice, like it or not.
That's how it works MOST of the times.

I dare say if the last election the PAP was given a clear mandate and won all GRCs with high votes, HDB will not be launching that many BTOs. Minister Mah will still be in control. With one GRC lost and lowest votes count in history, HDB launch many BTOs. Govt implement cooling measures again and again. U hear REDAS complaining in newspaper.

If i am the govt and my rice bowl is at stake, sorry, the rich will have to bite some bullet. But not incurring so much pain that they decided to run road. When the day comes when the rich and poor cannot be squeezed further, the country will start to go into deficit.

[Contrarian]

The key to higher wage is still productivity.
And another key to higher income is to reclaim high value blue collar jobs from foreigners.

It is time to change perception of a blue collar job and even offer incentives for Singaporeans to take up blue collar jobs.
Many high value(much higher pay than serving customers at counter) blue collar jobs in construction and marine industries are currently taken up by foreigners.

I like some of your ideas:

1. The key to higher wage is still productivity.
Yes - it also applies to the ministries - 1 person, several roles.

2. > And another key to higher income is to reclaim high value blue
> collar jobs from foreigners.

You look at China and Australia, the cherry, they keep the good deals for themselves. The greencards or PR, china says " > US $2M up...

3. U hire a FT, u grow a team of Singaporeans to build skills... 1 to 3 ratio.

4. No more PR unlimited - if u want PR forever, go home... or pay higher tax, higher levy, premium healthcare...

---

> Minister Mah will still be in control. With one GRC lost and lowest votes count in history,
> HDB launch many BTOs. Govt implement cooling measures again and again. U hear REDAS
> complaining in newspaper.

Today's minister have a serious lack of foresight. Under-planning in hospitals, under-sized transport, stubbornly refusing to build homes for new families, and allowing more FTs to come in.

Now they try to clean up the problem... but the most difficult is the FT not so easy to send back

[weijian]

The last time Singapore tried that in the early 80s, it triggered a recession.

IIRC, the intent back then was to move away from Labour intensive industries like Garment manufacturing and even Electronics (hand assembly type). So, yes, I think they raised the minimum wages to 'force' cos. to improve productivity ie. less labour intensive and more automation. What happened was a recession - many people lost their jobs when factories were forced to close down instead. Those who had a job suffered pay cuts/freeze and no/tiny bonus. I remembered that part cos' I was one of the 'lucky' ones!

First, i have to admit that i was still pretty much a toddler during the early 1980s. But i do read about the 1979 iran oil crisis that accumulated in Paul Volcker increasing interest rates from ~10% to 18% in 1981. That killed the inflation virus but also the US economy.

Would that be linked to the recession in Spore instead? (Since Spore is a open economy, i believe her ups/downs is more closely tied to that of the world's, rather than the actions of her policymakers)

[KopiKat]

The last time Singapore tried that in the early 80s, it triggered a recession.

IIRC, the intent back then was to move away from Labour intensive industries like Garment manufacturing and even Electronics (hand assembly type). So, yes, I think they raised the minimum wages to 'force' cos. to improve productivity ie. less labour intensive and more automation. What happened was a recession - many people lost their jobs when factories were forced to close down instead. Those who had a job suffered pay cuts/freeze and no/tiny bonus. I remembered that part cos' I was one of the 'lucky' ones!

First, i have to admit that i was still pretty much a toddler during the early 1980s. But i do read about the 1979 iran oil crisis that accumulated in Paul Volcker increasing interest rates from ~10% to 18% in 1981. That killed the inflation virus but also the US economy.

Would that be linked to the recession in Spore instead? (Since Spore is a open economy, i believe her ups/downs is more closely tied to that of the world's, rather than the actions of her policymakers)

No, the main trigger was the High Wage Policy which the government embarked on. I can still remember it very clearly as many friends and family members (including myself) suffered and endured through that recession. Instead of higher wages, we ended up with either lower or no wages!

Found some mention from an academic paper,

Mainly because of the high wage (the annual increase of wage and rise in mandatory Cen-tral Provident Fund (CPF) component) in 1985 Singapore experienced economic recession. To restrain wages, the Government instituted a “flexi-wage policy” in mid-November 1986, which became effective with the enactment of the Employment Amendment Act 1988.

Another mention in EDB site but it tried to downplay (says "as the world slipped into an economic slowdown") the main cause,

The government adopted a high-wage policy to accelerate the move away from labour-intensive industries and the attraction to high-technology industries. But wage bills swelled as the world slipped into an economic slowdown, and Singapore slid into a recession.

That, folks, was the effect of Economic Restructuring I. The pain 1st before any gains. Some will inevitably get left behind as they become unemployable / untrainable with the new minimum higher wages.

[weijian]

hi kopicat, thanks for the clarification that it was in the mid 80s. So on hindsight, was the gov's "painful" restructuring useful?
Paul Volcker engineered high rates tt bought a recession but also subsequently laid the foundation for 20yrs of boom. The asian pacific region also had to undergo such pain during the 97 crisis. Looks like no pain, no gain?

[Jared Seah]

Climbing the mountain, I would seek the advice from those who have reached the summit and are coming down the mountain trail.

I am suspicious of the well-intentioned advice of backseat drivers who have never climbed nor have the intention of climbing the mountain themselves.

If I am the first person to climb this mountain, then I shall go boldly where none has gone before!

Started work Dec 1983. Dodged the harshest winter of 86/87 by hibernating in NS.

After winter came spring.

The 90s were good times and I joined the job-hopping generation when there were more jobs than workers. The party ended in 97.

History rhymes.

[KopiKat]

hi kopicat, thanks for the clarification that it was in the mid 80s. So on hindsight, was the gov's "painful" restructuring useful?
Paul Volcker engineered high rates tt bought a recession but also subsequently laid the foundation for 20yrs of boom. The asian pacific region also had to undergo such pain during the 97 crisis. Looks like no pain, no gain?

If well managed, it's always short term pain for long term gain for the majority ie. those who are either young enough to be able to adapt / retrain easily or those who are rich and smart enough to adapt + profit from changes. The ones who got left behind will likely be the old + poor who're either untrainable as they become too unproductive + too expensive for the new regime of wages. Now, you ever wonder why there're so many old folks picking carton boxes, drink cans and selling tissue papers? Any major restructure and you'll see also not-so-old ones competing in this segment.

So, depending on your age + wealth + ability to adapt, you're going to have different views of any major 'Economic Restructuring' plans. In my case, I'm neutral - although too old to be re-trainable (or want-to-be-retrained), I believe I'm resourceful ($$ + alert mind) enough to be able to not only survive but perhaps thrive in any new paradigm shift (may be just wistful thinking, haha). The sad thing for me is seeing the ones left behind (especially close friends and family members) and I guess I'll just have to up my $$ contributions to charity (assuming I survive and thrive) in such an event.

At the end of the day, it still boils down to being able to take care of yourself through financial education and planning to become financially free.... No need to depend on others (esp. govt. or job) and worry so much about any major macro or micro changes to the economic environment...

I am suspicious of the well-intentioned advice of backseat drivers who have never climbed nor have the intention of climbing the mountain themselves.

You have every right to be suspicious of me.

I have only climbed one mountain in my life - Mt Fuji. Although it's a mountain, the climb up was on a well used trail (not the kind where you need to bring your own ropes and picks). Even as I laboured up the climb with decreasing oxygen level (thinking of giving up with every step), I could see small kids skipping and hopping past me + Ojisan/Obasan (Japanese old man/woman) walking briskly past me! At the top, they even have souvenir + ramen stands!

So, a timely disclaimer to all - what I'd posted in this forum are just personal opinions, not advice to anybody on mountain climbing, stocks, govt policy,...!

[Temperament]

hi kopicat, thanks for the clarification that it was in the mid 80s. So on hindsight, was the gov's "painful" restructuring useful?
Paul Volcker engineered high rates tt bought a recession but also subsequently laid the foundation for 20yrs of boom. The asian pacific region also had to undergo such pain during the 97 crisis. Looks like no pain, no gain?

If well managed, it's always short term pain for long term gain for the majority ie. those who are either young enough to be able to adapt / retrain easily or those who are rich and smart enough to adapt + profit from changes. The ones who got left behind will likely be the old + poor who're either untrainable as they become too unproductive + too expensive for the new regime of wages. Now, you ever wonder why there're so many old folks picking carton boxes, drink cans and selling tissue papers? Any major restructure and you'll see also not-so-old ones competing in this segment.

So, depending on your age + wealth + ability to adapt, you're going to have different views of any major 'Economic Restructuring' plans. In my case, I'm neutral - although too old to be re-trainable (or want-to-be-retrained), I believe I'm resourceful ($$ + alert mind) enough to be able to not only survive but perhaps thrive in any new paradigm shift (may be just wistful thinking, haha). The sad thing for me is seeing the ones left behind (especially close friends and family members) and I guess I'll just have to up my $$ contributions to charity (assuming I survive and thrive) in such an event.

At the end of the day, it still boils down to being able to take care of yourself through financial education and planning to become financially free.... No need to depend on others (esp. govt. or job) and worry so much about any major macro or micro changes to the economic environment...

I am suspicious of the well-intentioned advice of backseat drivers who have never climbed nor have the intention of climbing the mountain themselves.

You have every right to be suspicious of me.

I have only climbed one mountain in my life - Mt Fuji. Although it's a mountain, the climb up was on a well used trail (not the kind where you need to bring your own ropes and picks). Even as I laboured up the climb with decreasing oxygen level (thinking of giving up with every step), I could see small kids skipping and hopping past me + Ojisan/Obasan (Japanese old man/woman) walking briskly past me! At the top, they even have souvenir + ramen stands!

So, a timely disclaimer to all - what I'd posted in this forum are just personal opinions, not advice to anybody on mountain climbing, stocks, govt policy,...!

We are all here to help each other by pooling/sharing our outlooks which may change due to living environments(in fact usually will as you grow older) and sharing some of our living experiences. No one should worry about sharing sincerely. We all can see the honest and helpful intention behind the writing. If i make a mistake, please enlighten. If i have ill intention bar me. Don't forget there are many "croughing tigers & hidden dragons" in this forum.
"Don't play, play", says PCK.

[ken]

On the macro front, there will be lift-upgrading, interim-grading, enbloc HDBs, build highways, dig here and there.

I prefer the the micro monetary front, whereby they just deposit $1000 into each Singaporean savings account, with no strings attached.

Most of us should be quite happy.

[Jared Seah]

KopiKat,

I am treating you as the man who have reached the summit and is now walking down the mountain when I wrote my post:

"I can still remember it very clearly as many friends and family members (including myself) suffered and endured through that recession. Instead of higher wages, we ended up with either lower or no wages!"

My question to you if I meet you at the foot of the mountain who would be: "Got drink stalls along the mountain paths?"

If yes! Then I can save myself a lot of heavy lifting by ditching my extra "kiasu" bottles of water!

No matter what changes may come, life is like a poker or mahjong game - there is no such thing as: "OK folks, lets play carefully and may all of us walk away as winners today!"

P.S. I am suspicious of people who tout changes when they are relatively "unaffected" by the changes they propose. It's poking at the source.