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10-04-2012, 09:08 AM
I am not sure. It does not sound like a working solution.
Who is going to foot the bill?
I am quite sure it will straightaway lead to major price inflation and the ones who suffer will be the lower income earners.
The right way is to tax the rich people more and reduce the cost of living via price control over basic neccessities.(housing and transport are two easy targets).
As for food, it is time for ntuc to do more than upgrading its image by going high class(ntuc finest???).
Does Singapore need Economic Restructuring II?
by Lim Chong Yah
04:45 AM Apr 10, 2012
As a solution to the new problems of increasing income inequality and the excessive reliance on cheap foreign labour import, I would like to propose Economic Restructuring II, operational for three years, with the following six features.
Sizable pay increase
for lowest income workers
One, that all workers' pay below S$1,500 per month be cumulatively increased by 15 per cent in year one, 15 per cent in year two and 20 per cent in year three.
This increase is applicable to all workers, local or foreign, if he or she draws a pay of less than S$1,500 per month. A dollar quantum is also to be included in the increase pay package.
Part of pay increase to Skills
Development Fund and CPF RA
Two, that one-third of the increase pay package be channelled to the Skills Development Fund (SDF), one-third in the form of take-home pay and the other third to the CPF Retirement Account.
For foreign workers, it will take the form of ex-gratia payment upon leaving Singapore on expiry of tenure.
The SDF should be reactivated, revitalised and reinvigorated to perform the functions of training and retraining of workers, mechanisation and technological upgrading, and better employment of labour through redesigning in labour use.
The restructuring momentum has to be regenerated and sustained. The buzzwords should continue to be "use one worker instead of two".
Moratorium on pay
of highest income groups
Three, those who receive S$15,000 a month or more will have their wages or salaries frozen for three years only during Economic Restructuring II.
There is no proposal for a pay cut or a pay ceiling or super-taxes for high-flyers, only a moratorium on pay increase for three years.
The intention is not to frighten the geese that lay the golden eggs. No Wall Street protests of the kind in the United States should ever be envisaged.
Moderation for middle income groups
Four, those whose pay is between $1,500 and $15,000 a month will receive a quarter to a third of those less than $1,500 a month. A portion should still go to the much inadequate CPF Retirement Account.
Government co-payment of SDF
Fifth, the state (or the Government) should contribute to the SDF on a 1-to-1 quid-pro-quo basis to demonstrate tripartite commitment, participation and responsibility in the new economic restructuring process.
Involvement of National Wages Council
absolutely necessary
Six and lastly, like in Economic Restructuring I, the modus operandi of Economic Restructuring II - including the operational details - should be discussed and decided upon by the tripartite National Wages Council, which has to forge consensus by the three tripartite social partners, as in 1979.
AIMS OF Economic restructuring II
The basic objectives of Economic Restructuring II are:
To check and to halt and, if possible, to reverse somewhat the disturbing increasing income inequality trend;
To increase productivity, total factor productivity, as a growth target; and
To check and to halt the trend towards increasing reliance on very much cheaper imported labour to generate quantitative GDP growth.
The overall objective must be, and should be, to enhance further the quality of life of all those who live and work in Singapore and, in particular, for those whose home and country is Singapore.
With Economic Restructuring II, we will have a stronger, more robust, and more productive economy, and a fairer, more just society.
NOT EASY BUT ...
It is much more difficult to have national economic restructuring now than three decades ago. The politico-economic and the socio-economic environment have changed.
But what has not changed, however, is that we still have effective tripartism and we still have a government and the Civil Service that are among the best in the world in cleanness, integrity and ability.
Economic restructuring needs a national will. Do we have it now - as we had it then, a little more than three decades ago - but now, we are faced with a new set of economic problems, which may be called the problems of economic success?
Previously, we called (it) Growth with Equity. Now, we call (it) Inclusive Growth. I have no doubt that Economic Restructuring II will bring Inclusive Growth to a more respectable and a more meaningful level.
I recognise, however, that Economic Restructuring II as proposed by me is but one way of achieving the aims of Inclusive Growth - probably, in my view, the best way.
Lim Chong Yah is Albert Winsemius Chair Professor of Economics and Director, Economic Growth Centre, School of Humanities and Social Sciences, Nanyang Technological University. The article is an excerpt of a speech, Does Singapore need Economic Restructuring II or another 'Wage Revolution'?, which he gave at the Economic Society of Singapore Distinguished Speaker Public Lecture Series at the Orchard Hotel yesterday. The views expressed are his own.
Who is going to foot the bill?
I am quite sure it will straightaway lead to major price inflation and the ones who suffer will be the lower income earners.
The right way is to tax the rich people more and reduce the cost of living via price control over basic neccessities.(housing and transport are two easy targets).
As for food, it is time for ntuc to do more than upgrading its image by going high class(ntuc finest???).
Does Singapore need Economic Restructuring II?
by Lim Chong Yah
04:45 AM Apr 10, 2012
As a solution to the new problems of increasing income inequality and the excessive reliance on cheap foreign labour import, I would like to propose Economic Restructuring II, operational for three years, with the following six features.
Sizable pay increase
for lowest income workers
One, that all workers' pay below S$1,500 per month be cumulatively increased by 15 per cent in year one, 15 per cent in year two and 20 per cent in year three.
This increase is applicable to all workers, local or foreign, if he or she draws a pay of less than S$1,500 per month. A dollar quantum is also to be included in the increase pay package.
Part of pay increase to Skills
Development Fund and CPF RA
Two, that one-third of the increase pay package be channelled to the Skills Development Fund (SDF), one-third in the form of take-home pay and the other third to the CPF Retirement Account.
For foreign workers, it will take the form of ex-gratia payment upon leaving Singapore on expiry of tenure.
The SDF should be reactivated, revitalised and reinvigorated to perform the functions of training and retraining of workers, mechanisation and technological upgrading, and better employment of labour through redesigning in labour use.
The restructuring momentum has to be regenerated and sustained. The buzzwords should continue to be "use one worker instead of two".
Moratorium on pay
of highest income groups
Three, those who receive S$15,000 a month or more will have their wages or salaries frozen for three years only during Economic Restructuring II.
There is no proposal for a pay cut or a pay ceiling or super-taxes for high-flyers, only a moratorium on pay increase for three years.
The intention is not to frighten the geese that lay the golden eggs. No Wall Street protests of the kind in the United States should ever be envisaged.
Moderation for middle income groups
Four, those whose pay is between $1,500 and $15,000 a month will receive a quarter to a third of those less than $1,500 a month. A portion should still go to the much inadequate CPF Retirement Account.
Government co-payment of SDF
Fifth, the state (or the Government) should contribute to the SDF on a 1-to-1 quid-pro-quo basis to demonstrate tripartite commitment, participation and responsibility in the new economic restructuring process.
Involvement of National Wages Council
absolutely necessary
Six and lastly, like in Economic Restructuring I, the modus operandi of Economic Restructuring II - including the operational details - should be discussed and decided upon by the tripartite National Wages Council, which has to forge consensus by the three tripartite social partners, as in 1979.
AIMS OF Economic restructuring II
The basic objectives of Economic Restructuring II are:
To check and to halt and, if possible, to reverse somewhat the disturbing increasing income inequality trend;
To increase productivity, total factor productivity, as a growth target; and
To check and to halt the trend towards increasing reliance on very much cheaper imported labour to generate quantitative GDP growth.
The overall objective must be, and should be, to enhance further the quality of life of all those who live and work in Singapore and, in particular, for those whose home and country is Singapore.
With Economic Restructuring II, we will have a stronger, more robust, and more productive economy, and a fairer, more just society.
NOT EASY BUT ...
It is much more difficult to have national economic restructuring now than three decades ago. The politico-economic and the socio-economic environment have changed.
But what has not changed, however, is that we still have effective tripartism and we still have a government and the Civil Service that are among the best in the world in cleanness, integrity and ability.
Economic restructuring needs a national will. Do we have it now - as we had it then, a little more than three decades ago - but now, we are faced with a new set of economic problems, which may be called the problems of economic success?
Previously, we called (it) Growth with Equity. Now, we call (it) Inclusive Growth. I have no doubt that Economic Restructuring II will bring Inclusive Growth to a more respectable and a more meaningful level.
I recognise, however, that Economic Restructuring II as proposed by me is but one way of achieving the aims of Inclusive Growth - probably, in my view, the best way.
Lim Chong Yah is Albert Winsemius Chair Professor of Economics and Director, Economic Growth Centre, School of Humanities and Social Sciences, Nanyang Technological University. The article is an excerpt of a speech, Does Singapore need Economic Restructuring II or another 'Wage Revolution'?, which he gave at the Economic Society of Singapore Distinguished Speaker Public Lecture Series at the Orchard Hotel yesterday. The views expressed are his own.
