atans1

PM, this can’t be right? 5.9% GDP but 0.4% wage increase?

In Economy on 10/05/2013 at 5:48 am

(Update on 30 May 2014: Related post https://atans1.wordpress.com/2014/03/02/beer-real-wages-next-ge/)

For incomes to rise, the economy must grow, Mr Lee said in his May Day message, making clear the centrality of economic growth which has been disputed by some who are worried about foreign workers and inequality, according to the local media. This is a repeat of, “Everyone would like their lives to become better and one important way of doing that is to make sure your pay goes up, especially with low-income workers. And for the pay to go up, the economy has to grow,” he had said in April. 

So I’m looking forward to hear what the govt has to say about Uncle Leong’s assertion that he estimated that from 2000 to 20111, the real growth in the median wage excluding employer’s CPF contribution was only 0.4%per annum., (FYI, Singapore’s economy grew at an average of 5.9% annum from 2000 to 2011*), After all, the govt was quick to counter his comments about the rent increases on Ubin.

Somehow, I doubt that the govt would contradict him because in a paper sometime ago, the Dept of Statistics  reported that between 2000 and 2011, real wages increased by 1.6% pa including employer’s CPF contribution. Uncle Leong juz took out the employer’s CPF contribution.After all, this money is not easily accessible, given the restrictions on the use of CPF money.

More interesting than Uncle Leong’s comments is that the NTUC minister (Zorro Lim) said:

“Wages can still go up despite slower economic growth.

‘This, provided that Singapore continues to get its policies right, said labour chief Lim Swee Say” on Saturday 27 April, ST reported.

True, this doesn’t contradict what PM said, but does imply that the link between wages and economic growth isn’t as clear cut as what PM says it is. And that it is also dependent on govt getting “its policies right”. But what if it gets its policies wrong (like HDB flats**, public tpt** and FTs by the truck-load).

We suffer while ministers earn their salaries and are protected from being sacked for incompetency, until the voters show their anger, and the ministers “resign”?

————

*

Year GDP%
2000 9
2001 -1.2
2002 4.2
2003 4.6
2004 9.2
2005 7.4
2006 8.6
2007 8.5
2008 1.8
2009 -1.3
2010 14.8
2011 5.2

(Dept of Stats)

**To be fair policies in these areas have undergone U-turns. But S’poreans are suffering from Mah’s and Raymond Lim’s goof-ups. I make no comment on the FT policy because I’m not sure if the govt is walking the talk until I see more numbers. Also after the 2008 M’sian GE, there was a influx of FTs from M’sia, afraid that the Malays would take out their parangs like in 1969. Given the 110% support that the Chinese gave the DAP in the recent election, and the failure to PK to defeat BN, I’m sure the Chinese are feeling vulnerable again.. Will they try to come again, and will the govt allow them in despite its promise to cut back on FT inflows?

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  1. PM and his cabinet’s salaries are tied to GDP. Why would they care about raising your wage over the GDP? Btw, the numbers prove it.

  2. PAP ministers don’t & never resigned. They just simply get assigned to an even better paying assignment. PAP ministers & MPs don’t work for the singaporeans per se but for their careers ahead after stepping down.
    From a $$$million to a $$$$$million assignment (note it is assignment not job, afterall they done their ‘jobs’ serving lhl while in office)

  3. “I’m sure the Chinese are feeling vulnerable again.. Will they try to come again, and will the govt allow them in despite its promise to cut back on FT inflows?”

    Perhaps the govt has already shown its hand..the HDB subletting rules were amended (i think earlier this year or last year). Only SG citizens and Malaysian citizens can rent for longer than 1.5years.

    http://www.hdb.gov.sg/fi10/fi10323p.nsf/w/RentOpenMktRentOutWholeFlat?OpenDocument

    “The maximum subletting period allowed is three years per application or as indicated in the approval letter, whichever is shorter. However, for subletting involving non-citizen subtenants (excluding Malaysians), the period of subletting per application is 1.5 years or as indicated in the approval letter, whichever is shorter. Non-citizens refer to Singapore Permanent Residents and foreigners.”

  4. GDP ~= Total Income (Cap gains, Wages, Corp Profits, etc.)
    So where did the gains go?

  5. […] – Breakfast Network: Value our people – not just their papers – Thoughts of a Cynical Investor: PM, this can’t be right? 5.9% GDP but 0.4% wage increase? […]

  6. Trickle down economics.
    Breadcrumbs from the table.
    Something that is perfectly acceptable to the new generation of young ‘leaders’.

    • If Uncle Leong’s 0.4%per annum is correct, trickle down economics is more like bones and scraps thrown to the dogs when you know what they pay themselves with their low target for GDP growth.

  7. […] I wrote “PM, this can’t be right? 5.9% GDP but 0.4% wage increase?”, I’ve read something that illustrates that it’s the distribution of GDP growth that matters, […]

  8. […] what success? Real wages grew by only 0.4% while GDP grew by 5.9% . while the prices of public housing apartments went up in a […]

  9. […] problems S’pore were facing were the results of success*. Here I asked: Success what success? Real wages grew by only 0.4% while GDP grew by 5.9% . while the prices of public housing apartments went up in a […]

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