Comments By: Mellanie Hewlitt,

10 Oct 2006, Sg_Review

It seemed only yesterday that the Singapore PAP government declared through its state owned propaganda machine (the local press) that Singapore workers and Managers earned more than their counterparts in the US, UK and Australia.

However, in what appears to be a strange twist of events (and contradiction in terms), Singapore' s state owned media is now declaring that Managers in Singapore earn less than their overseas counterparts:  See "Senior managers in Singapore earn less, enjoy higher standard of living: survey" at http://www.channelnewsasia.com/stories/singaporebusinessnews/view/234622/1/.html

This inconsistent statement is all the more glaring given that the original contradictory assertion was made barely 3 years ago as a flimsy excuse to support CPF cuts.  From this mesh mash of contradictions one can only summise that how statistical data is interpreted and fabricated depends entirely on the policy of the day that Singapore's ruling Elites wish to implement.

Now that it is irrefutable established fact that the original basis for the CPF cuts 3 years ago were unfounded, will Singapore's ruling party do the right honourable thing and restore CPF funds to the disadvantaged masses?

To refresh everone's memories we append below previous articles which gives insights into the very unique brand of logic that is applied in Singapore's local Press's.

Comments: Mellanie Hewlitt
8 Sep 2003

These days, one has to take statements and findings reported by the Singapore
Government (and the Singapore Press) with a truckload of salt. The lines
between what constitutes objective facts, and "creative
interpretation/propaganda" are blurred.

An interview with Mr Robert Broadfoot, the founder and managing director of
Perc, a Hong Kong-based company, revealed that the conclusions of the study
were derived from only one question which was based on perception. So much for
objective professional research in Singapore.

Official census figures now confirm what is already known publicly, that
Singapore's average wage rate is well below US wages rates. Of cause this
excludes PAP Ministerial salaries and it is conceeded that perhaps if these are
factored in, it might explain how the Government reached the very unique
conclusion that our wage costs/rates are higher then those in the US and UK.

That would also imply that the original basis for the CPF cuts no longer holds
water. Does that mean the Singapore Government will reverse this policy as it
was based on erroneous and unreliable date? PAP Ministers have remained
strangely silent on this issue.

Peering deeper one also wonders if there is more to this casual statistical
oversight then meets the eye. Was it an honest mistake or a case of willfull
blindness? Or was this an act of sheer desperation from policy makers who have
are unable to come up with viable solutions for the structural problems of the
economy.

One also suspects that these days for the right price, anyone would be able to
engage a "consultancy firm" to confirm that Elvis is still alife, that Madonna
is a virgin and that Father Christmas does live in the North Pole. Afterall
this is part and parcel of the "reality" that is the "Singapore Matrix". This
would also sum up the longstanding relationship between PERC and the Singapore
Government.

In the recent months, there have been a rise in the spate of cover-ups from the
government. It seemed only last month that two local economists were taken to
task for relying on "inaccurate numbers" supplied by the Singapore Department
of Statistics in a study on Foreign Talent employment in Singapore.

----------------------------------------------------------------------------------------------

Full Marx for Singapore's working class.

By Jake van der Kamp jakeva@s...
29 August 2003
South China Morning Post
(c) 2003 South China Morning Post Publishers Limited, Hong Kong. All
rights reserved.

AND HERE IS the latest gem from Singapore, straight from the front
page in this diehard bastion of central planning of the leading
English language newspaper, Pravda (Party Rendition and Authorised
Version of Daily Announcements).

Apparently the Singapore government is worried wages have gone too
high and some corrective action must be taken to bring them down.

That finding results in part from what some people in New York told
Deputy Prime Minister Tony Tan on a visit there (this counts for
detailed policy research in Singapore) and partly from a recent wage
survey by the Political and Economic Risk Consultancy (Perc), which
rated labour costs in Singapore as higher than those in the United
States or Australia.

Perc's methodology in this survey was to ask expatriates what they
thought of labour costs in different countries, another example of
the sort of detailed policy research that has little time for hard
statistics. The figures from both countries on employee earnings say
that average wages are at least 25 per cent greater in the US than in
Singapore and this is after taking the highest Singapore numbers I
could find.

For the flavour of what you get when basing a labour cost study on
expatriate opinion, notice from the table that Perc rates labour
costs in Vietnam higher than in Thailand. For a good laugh tell that
to people in Hanoi or Bangkok.

You may also wish to note that Singapore's gross domestic product per
capita is 25 times greater than Indonesia's while Perc says its
average labour costs are only 1.6 times as great. This sort of
disparity with neighbouring countries is common and suggests that
Singapore workers are underpaid for their level of productivity.

But why let the facts get in the way of a good scare story. The
Singapore government subscribes to the story and has come up with a
way to cut labour costs - cut back contributions to the Central
Provident Fund (CPF) from their present level of 36 per cent of
employee earnings. This does not mean, by the way, employees will
instead get this money. It is their employers who will.

Now if the Hong Kong government were to cut Mandatory Provident Fund
contributions in Hong Kong most people probably would applaud. It is
dead money anyway. Given the derisory rates of return that the CPF
gives Singaporeans, you would think they might share that sentiment.

But Singaporeans do not have to wait until retirement to get their
CPF money. They can use their contributions to pay for their homes
and other approved investments. Many of them are thus unhappy with
the proposed cut. In mortgage payments they will have to make up from
their direct income what previously they got from the CPF. It is all
rather highhanded and will hurt them.

And who will benefit? To answer this question you must first
appreciate two crucial differences between Singapore and Hong Kong.
The first is courtesy of the usual central planner's obsession with
making things, Singapore still has 25 per cent of its economy tied up
in manufacturing while the figure in Hong Kong is less than 5 per
cent.

The second is that 75 per cent of investment in manufacturing in
Singapore is foreign investment whereas that figure in Hong Kong is
negligible. What will happen in Singapore is foreign employers will
take what native Singaporean workers lose through this cut.

There will be a transfer of wealth from the people who worked for it
to the multinational corporations (MNCs). This could be excusable if
these MNCs then invested the money back in Singapore but the
difficulty is capital investment in Singapore is dropping faster than
a rock in freefall and has never been lower than it is now, relative
to the size of the economy. The MNCs are mostly in exit mode now.
They will not put the money back into Singapore. They will just take
it home with them.

Then you get to that fuzzy thinking that labour costs are an
obstruction to economic performance. If so, Mr Tan, may I ask you
what is the point of economic effort? Is it not to improve the
prosperity of those who participate? What sort of an achievement is
it if you instead make them poorer?

I have always maintained that Singapore is the one country to have
come closest to achieving communism in the classic Marxist sense.
This is now unfortunately also showing the classic result of central
planning put in practice, a steady grinding down of working class
disposable income.

--- End forwarded message ----------------------------------

From: apson lim <apsonlim@y...>
Date: Fri Aug 29, 2003 11:53 am
Subject: Our labour costs higher than US? Who's kidding who?
27 Aug 03

Here's some corroborating data from the Singapore Ministry of Manpower and the
US Department of Labor.

The occupational groups used in both studies aren't identical but they are
similar enough to give one a pretty good idea of the general picture.

2002 Monthly Wage by Occupational Group (SGP)
http://www.mom.gov.sg/MOM/MRSD/Others/2002W_OWSfindings.pdf

1. Managers -- S$5,856
2. Professionals -- S$3,798
3. Technicians & Associate Professionals -- S$2,655
4. Clerical Workers -- S$1,818
5. Service & Sales Workers -- S$1,650
6. Production Craftsmen -- S$2,000
7. Plant & Machine Operators -- S$1,680
8. Cleaners & Labourers -- S$1,171

2002 Monthly Wage by Occupational Group (USA)
http://www.bls.gov/ncs/ocs/sp/ncbl0539.pdf

1. Executive, administrative, and managerial -- S$9109
2&3. Professional specialty and technical -- S$7170
4. Administrative support -- S$3567
5. Service occupations -- S$2383
5. Sales -- S$3455
6. Precision production, craft, and repair -- S$5267
7. Machine operators, assemblers, inspectors -- S$3706
7. Transportation and material moving -- S$3905
8. Handlers, equipment cleaners, helpers, and laborers -- S$2857

Source
======
REPORT ON WAGES IN SINGAPORE, 2002
http://www.mom.gov.sg/MOM/MRSD/Others/2002W_OWSfindings.pdf
by: Manpower and Statistics Department, Ministry of Manpower, Singapore
dated: 30 June 2003
Table 9
=======
Managers -- S$5,856
Professionals -- S$3,798
Technicians & Associate Professionals -- S$2,655
Clerical Workers -- S$1,818
Service & Sales Workers -- S$1,650
Production Craftsmen -- S$2,000
Plant & Machine Operators -- S$1,680
Cleaners & Labourers -- S$1,171

Glossary
========
Professionals -- Semi­conductor engineer; System designer & analyst; Civil
engineer; Accountant; Mechanical engineer, Auditor (Accounting); Electronics
engineer; Quantity surveyor; Software engineer; Network, systems and database
administrator

Technicians and Associate Professionals -- Road transport service supervisor;
Buyer; Personnel/Human resource officer; Draughtsman; Sales representative
(Technical); Quantity surveying technician; Assistant accountant; Assistant
nurse; Management executive; Pre­primary education teacher

Clerical Workers -- Material planning clerk; Billing clerk; Shipping clerk;
Telephone operator; Personnel/Human resource clerk; Data entry operator;
Secretary; Medical/Dental receptionist; Insurance/Underwriting clerk; Cashier

Service and Sales Workers -- Hawker/Stall holder; Waiter; Cook; Captain/Waiter
supervisor (Restaurant); Private security guard; Shop sales assistant; Sales
supervisor; Housekeeper (Hotels and other establishments); Bartender

Production Craftsmen and Related Workers -- Electronics fitter; Supervisor and
general foreman (Building trades); Industrial and office machinery mechanic;
Electrician; Motor vehicle mechanic; Sheet metal worker

Plant and Machine Operators and Assemblers -- Petroleum and natural gas refining
plant operator; Pharmaceutical and toiletry products machine operator; Machine
supervisor and general foreman; Plastic product machine operator; Bus driver;
Electrical/Electronics products quality checker and tester; Van driver;
Trailer­truck driver; Driving instructor and tester; Electronic
equipment/component assembler

Cleaners, Labourers and Related Workers -- Cargo Handlers/loaders; Godown
labourer; Store hand; Car park attendant; Lorry attendant; Manufacturing
labourer and related worker; Aircraft loader; Office cleaner; Kitchen assistant;
Construction labourer and related worker


Source
======
NATIONAL COMPENSATION SURVEY: OCCUPATIONAL WAGES IN THE UNITED STATES,
JULY 2002
http://www.bls.gov/ncs/ocs/sp/ncbl0539.pdf
by: Bureau of Labor Statistics, U.S. Department of Labor
dated: June 2003
Table 1
=======
Professional specialty and technical -- S$7170 per month
[US$27.18 perhour; 36.1 hours per week]

Executive, administrative, and managerial -- S$9109 per month
[US$31.16 per hour; 40.0 hours per week]

Sales -- S$3455 per month
[US$14.50 per hour; 32.6 hours per week]

Administrative support -- S$3567 per month
[US$13.41 per hour; 36.4 hours per week]

Precision production, craft, and repair -- S$5267 per month
[US$18.20 per hour; 39.6 hours per week]

Machine operators, assemblers, inspectors -- S$3706 per month
[US$12.94 per hour; 39.2 hours per week]

Transportation and material moving -- S$3905 per month
[US$14.25 per hour; 37.5 hours per week]

Handlers, equipment cleaners, helpers, and laborers -- S$2857 per month
[US$10.98 per hour; 35.6 hours per week]

Service occupations -- S$2383 per month
[US$10.32 per hour; 31.6 hours per week]

1 month = 4.2 weeks; US$1 = S$1.74

Glossary
========
Too many professions to list here. Refer to the report.

Anyone who knows anything about the US wouldn't believe that the wages paid in
Singapore could possibly be higher than the wages paid in the US. This is also
consistent with the official data from both countries provided earlier.

So how could PERC have arrived at a different conclusion, assuming that they did
an honest investigation?

Clearly the difference must come from those jobs in Singapore that pay higher
wages than their counterparts in the US. As you can guess, there aren't too many
such jobs. I can think of two.

The first group comprise the high-ranking civil servants and public office
holders in Singapore. Federal and State employees in the US, even the
high-ranking ones, are among the most poorly paid people in the country. In
Singapore, it's the other way round.

The second group comprise foreign talents who have been paid large premiums by
various agencies in Singapore to relocate here. The well-known argument is: if
we don't pay a competitive salary over and above what these foreign talents are
receiving back at home, they wouldn't want to move to Singapore. And so we
created jobs for them in Singapore that pay more than their counterparts in the
US.

Apparently there are now so many of these jobs to an extent that the labour cost
balance is tipped in favor of the US despite the fact that most Singaporeans
still hold wages that fall far behind Americans with similar jobs.


From : PUISPIT
Sammyboy Alfresco Coffee Shop
Date : 27 Aug 03

Here are two links which detail the salaries of workers in two different sectors
in the US:
1) For median income in the manufacturing sector in the US in 2002:

http://www.abbott-langer.com/mfgsumm.html

The survey showed that on an annual basis, janitors are paid US$21,481
(S$38,000); machinists are paid US$27,643 (S$48,000); production supervisor are
paid US$45,206 (S$79,000). And etc.

2) For average starting salaries of administrative support staff in the US in
2003:

http://www.iaap-hq.org/ResearchTrends/Salaries2003.htm

Just check it out and come to your own conclusions.

We must not forget that on top of basic pay, commissions, bonuses and overtime
paid to US workers, US employers also need to contribute to the State and/or
Federal governments:

Social security and medicare (equivalent to our CPF)
Unemployment insurance
Employment training tax
Worker compensation insurance

Not forgetting the very high cost of medical insurance (anything from US$200 –
US$1000 per worker per month!!) borne by employers as part of the compensation
package.

All these additional contributions further increase the burden of hiring in the
US.

With so much data readily available, it doesn't take much effort to verify
labour costs in most major cities in the world. Who are the MIW trying to fool?
It is irksome that in this internet age, the MIW persist in presuming that they
can continue to get away with their specious arguments.

A simple google search on the MIW's favourite source, PERC, will quickly reveal
that:

1) little can be found about the consultancy firm or its reports
2) no one else quotes PERC's reports as gospel truth the way the MIW do

Why?

Go check out PERC's bare and unprofessional looking website (www.asiarisk.com)
and you'll understand. Here's some background info on its founder and MD:

[[Robert Broadfoot is the founder and Managing Director of Political & Economic
Risk Consultancy, Ltd. A US citizen, Mr. Broadfoot graduated with honors in
economics from OBERLIN COLLEGE in the United States in 1972. He has lived in
Hong Kong since 1975. Beside coordinating PERC s overall operations, Mr.
Broadfoot is directly responsible for managing PERC s research and consulting
involving mainland China and the Greater China region.]]

Economists and analysts I know described PERC as a tiny outfit whose reports are
sources they wouldn't deign to quote.


From : PENGSAN
Sammyboy Alfresco Coffee Shop
Date : 28 Aug 03

I draw 1700 dollars a month with no increment for the last 3 years. My mum draws
500 dollars a month. We have long working hours, and rarely get to see each
other. After CPF 20% cut, we can barely make it through the end of the month.

Yet we have a rude shock when we both found out we are the third highest paid in
the world. Our PAP Goverment has just told us that we draw higher salaries than
even Australia and USA! Our unemployment problem is due to the Singapore
Citizen's fault. Our Salaries are just too high.

Well, just a few years ago, the PAP goverment say they were going to resume CPF
to 40%. Now, the tune has changed. We are paid too high. Cut CPF. At the same
time the signal is being sent that salaries should not be paid too high.
Remember? China and India much cheaper. Yes! But does the cost of a car or a
house the same as the cost in Singapore?

Our ministers and MPs are the highest paid in the whole world. They get millions
a year. Each constituency have 3 or 4 MPs. PAP is a big party. Singapore is very
small island! Do we need so many MPs? So many civil servants are redundant,
overpaid and highly inefficient.

Here we have a goverment who thinks they know best and never consults the
citizen of any decision that's made. In these times of difficulties we have a
650 million Esplanade splurge. Plus:

We have a transport minister who's main pirioty isn't transport efficiency but
profits.

We have the first driverless system that cost the citizen's transport extra and
breaks down thrice since it's use.

We have a goverment who on one hand splurge on the Esplanade scrimp on HDB
upgrades. Who won't learnt after repeated mistakes of bankrupt contractors
delaying the upgrading project time and again. It is only after flare ups do
they take attention to the issue.

Have they gone so fat that they have gone thick in the head?? PAP is entirely
faultless.

I see now an increasingly bleak future for Singapore. The goverment has a death
gripe on the enterprises here and practises pseudo-deregulations and
privatisations. They have no directions. Despite top scholarly decisions made,
Singapore's economy is going down, down down. And now, to top it all, they have
resorted to pointing fingers shifting blames. The lowest of the low. Our
salaries is higher than US.

Now we can all look forward to work till the end of our lives trying to pay up
mortgage and have a absolutely zero quality of life.

I can barely survive on my own, much less talk about getting married and having
children. I guess that option is reserved for the PRs and the FTs. I am in a
country where Singaporeans and it's goverment look down on it's own Singaporean
citizens. Where they give all the key roles and development to Angmoh FTs and
PRs.

Seems to me as the day goes by that the quitters are winners and losers are
stayers.

Ask yourself today, do you want a better quality of life? Will and can Singapore
give you a better quality of life?

Make a decision today. You'll feel better after you know where to go.

For those who want a better quality of life? Make plans. The PAP has shortchange
you and make you slaves to their system till the end of your days. Only you can
change your life.

Emigrate when the time is right.

TODAY
8 Sept 2003
False alarm
Perc's cost-of-labour findings based on perception

http://www.todayonline.com/index_home.htm

by Teo Hwee Nak
hweenak@...

ONE study almost singlehandedly stole the thunder from the debates on
CPF cuts last week.
.
When Deputy Prime Minister Tony Tan cited an Asia-Pacific report that
rated Singapore as having the fourth-highest labour cost in the
region, and even more expensive than in the United States or
Australia, it raised puzzled — and, for many, angry — eyebrows among
not only the man in the street, but economists and academics as well.
.
The study was conducted by the consulting firm, Perc or Political and
Economic Risk Consultancy.
.
While Dr Tan did not point to the Perc report as the only reason for
having to tweak the CPF contribution rates, he did stress
the "profound importance" of the "simple statistic".
.
An interview with Mr Robert Broadfoot, the founder and managing
director of Perc, a Hong Kong-based company, revealed that the
conclusions of the study were derived from only one question which
was based on perception.
.
"The question was put to between 80 and 100 management-level
expatriates in Singapore on how they rate the cost of local labour in
Singapore, and how this compares with their own country. These are
purely perception grades of what they as managers have to pay their
staff across all levels and jobs," said Mr Broadfoot.
.
The question also required the expatriates to compare the labour
costs in Singapore with their country of origin. The result? The
Australian and American expatriates perceive Singapore labour to be
more costly than in their homelands.
.
How accurate is this perception?
.
The Worldwide Total Remuneration 2001/2002 study done by the global
management consulting firm, Towers Perrin, shows that Singaporean
workers — across all levels — do not cost more than those in the US.
.
According to the study, CEOs here earn US$645,740 ($1.14 million) a
year, which is a third of the US$1,932,580 annual income of an
American CEO. An accountant with about five years' experience here
earns an average of US$55,803 a year, which is also lower than the
US$68,700 earned by an American accountant. An American manufacturing
worker costs almost three times more than one here.
.
The wage comparison between Australians and Singaporeans, however,
varies according to jobs. Management positions and professionals do
indeed cost more in Singapore than Down Under, though the blue-collar
worker here is cheaper.
.
In fact, a check on the US Department of Labour website is enough to
debunk the "perception" of the expatriates surveyed. From managerial
positions to computer engineers to sales personnel, the average
Singaporean worker costs less than the American — sometimes as much
as 50 per cent.
.
But Perc's Mr Broadfoot stressed the validity of his company's
findings. "More often than not, business decisions are made based
more on perception than facts. Singapore has to be careful because
it's starting to be perceived as expensive, if not more so, than US
and Australia. A single grade can be more enlightening than when you
start to go into specifics, which can get quite confusing," he said.
.
But a local labour economist dismissed the findings as "more alarmist
than anything".
.
"I would want to find out exactly which are the jobs and sectors that
we are not competitive. And the more important question is, why in
the mind of expats is Singapore considered high in labour cost?" He
also doubted that CPF contribution would have any part to play in
these perceptions.
.
Disagreeing, Mr Broadfoot said: "Singapore has a very unique
situation, whereby for every average worker, the employer has to pay
an additional 16 per cent on top of their salary. That means less
profit for your company."
.
On how the recent CPF cut, to be implemented from Oct 1, would
influence perceptions, he said he would wait till next year's study
to find out.
.
Incidentally, a survey of 200 employers conducted by Mercer Human
Resource Consulting whose findings were reported in The Business
Times, showed that many employers do not believe the three-point CPF
cut will help improve the job market. In fact, eight out of 10
companies said it would not help them save jobs. Rather, they felt it
to be an important signal to investors about boosting Singapore's
competitive edge.
Perc's cost-of-labour findings based on perception

 

STRAITS TIMES INTERACTIVE

AUG 29, 2003
Are our wage costs really that high?

By: LOO CHUEN YEW

I REFER to the report, 'Wage cost burden heavier than in US' (ST, Aug 27).

According to the survey that Deputy Prime Minister Tony Tan quoted, the labour
cost in Singapore was graded 5.5 while China's was graded 2. This means the
cost of workers in Singapore is 2.75 times that in China.

However, in his National Day Rally speech, Prime Minister Goh Chok Tong
mentioned that for every one manufacturing worker hired in Singapore, a company
could hire 13 in China. Who is right?

According to the survey Dr Tan cited, a worker in the United States is only 2.5
times more expensive than one in China! Is a worker in China really so
expensive? Is the labour cost in Hong Kong, South Korea and Singapore really so
expensive, compared to the US?

I have visited factories in the industrial areas in southern China every year
since 1998.

The average basic salary for factory workers is about 400 yuan a month, or
US$0.28 per hour. In the US, the minimum hourly wage is US$5.15 per hour, 18
times more!

According to the report, the labour-cost index is 'derived from a survey of
expatriates working in Asia, asking them to rate the country's labour cost'.

I have had an expatriate boss who told me that the cost of keeping an
expatriate in Singapore is beyond the imagination of Singaporeans.

Not only does the company have to pay for quality housing and a family
allowance, but also taxes and the education of his children in the privately
run American school.

I am not sure if the survey is about the cost of expatriates or of the average
worker, or somewhere in between.

There are numerous surveys comparing the cost of labour in the world.

In fact, taking into account the productivity of workers, many surveys indicate
that Singapore workers are among the best value-for-money in the world.

Singaporeans generally understand and support the need to reduce business/CPF
cost to be competitive, but surveys have to be interpreted correctly,
especially when discussing sensitive issues.

The last thing we want in today's economic scenario is to 'price' ourselves out
of the market and frighten off investors when our workers are actually not that
expensive.

LOO CHUEN YEW

------------------------------------------------------------

By: HIONG KUM MENG

THE Economist Intelligence Unit's July 2003 Cost-of-Living Index Survey
(published in the Aug 7 print edition of The Economist) showed that Singapore's
cost of living is nearly similar to New York's and above that of Stockholm's
and Frankfurt's.

I wish Deputy Prime Minister Tony Tan had also highlighted this profoundly
important statistic.

The Singapore Government should not be shy to confront the real and larger
issue causing our present plight, which is the high cost of living.

While lowering the wage-cost burden is useful, the problem will not be solved
until the main causes of our high cost of living - land and property prices are
the main culprits - are removed.

Lowering the wage cost is merely symptomatic relief; the disease will
increasingly take a greater toll on the society and family if it is not
eliminated.

And, certainly, the disease finds its host only in Singaporeans.


HIONG KUM MENG

------------------------------------------------------------------------

Subject: [Sg_Review] Spore's labour costs higher than US, Australia? Really?

Comments; Mellanie Hewlitt
27 Aug 2003

DPM Dr Tony Tan, addressing Sembawang Shipyard workers yesterday cautioned them
about the need to cut CPF and wages to make Singapore competitive.

He said the independent research unit PERC in its report released confirmed
that the labor costs in Singapore are higher than USA and Australia.
-Source; Channel News Asia.

DPM Tan did not elaborate on the fact that a huge portion of Singapore's wages
goes to pay for a very fat, over weight and top-heavy government bureaucracy,
as well as indecent land and transport costs. Peer a little deeper into this
conumdrum and one might notice that all these variables were tighly "managed"
and "controlled" by Singapore's policy makers.

He also remained silent on the fact that the inflation rate in Singapore has
inched upwards as electricity rates, MRT fares, GST etc are all increasing even
as Real Wages shrink and bankruptcies increase.

As usual, Singapore policy makers have only looked at one side of the equation
and have ignored the big picture. These include the cost of living in Singapore.

Several other essential factors have also been overlooked in DPM Tan's examples
of US and Australia;

a) Unlike the US, UK and Australia, there is no public welfare scheme or
unemployment benefits here in Singapore. If one doe not work, one does not eat
literally. The worker is on his own with no help at all from the state.

b) What about the cost of land and a car, compare these in US, UK and Australia?

c) Singapore (unlike US, UK and Australia) has a very bloated and top-heavy
state administration. See below comments from Lee Han Shih;

Lee Han Shih in the 19 Aug 2003 issue of TODAY (and Singapore Review);
"One out of perhaps 10 people in the local labour pool works for the government
(the exact number is not disclosed). These people do not generate wealth. Their
salaries are paid for by the labour of those who do. On average, one in nine
people in the private sector is supporting a civil servant.

Put another way, some 11 per cent of every non-civil servant's pay goes towards
keeping the civil service running. This money is collected in many ways -
directly through income tax and the goods and services tax and indirectly
through levies, licence fees and other charges that work themselves into the
salary structure.

This is a scary figure. Coupled with CPF contributions, nearly half of a
working person's wages (47 per cent, to be precise: 36 for CPF and 11 for the
civil service) cannot be used to meet his immediate needs. Is it any wonder
that business costs in Singapore are considered high?"

The above is even more scary when we compare the largest component of wages in
State Administration, Ministerial salaries. Using DPM Tan's base for
comparison (i.e. Australia, UK and US);

1. Singapore Prime Minister's Basic Salary US$1,100,000 (SGD1,958,000) a year
Minister's Basic: US$655,530 to US$819,124 (SGD1,166,844 to SGD1,458,040) a
year

2. United States of America President: US$200,000 Vice President: US$181,400
Cabinet Secretaries: US$157,000

3. United Kingdom Prime Minister: US$170,556 Ministers: US$146,299 Senior Civil
Servants: US$262,438

4. Australia Prime Minister: US$137,060 Deputy Prime Minister: US$111,439
Treasurer: US$102,682

(Source: Asian Wallstreet Journal)

As usual Singapore policy makers have chosen form over substance, looking only
at one sole criteria; wages. A worker's wage cannot be viewed in isolation by
itself as there are a host of other variables which will determine this wage.

Is this a Case of severe Myopia or Will Full Blindless? You decide.

And even if one chooses to look solely at wage as a basis for comparison, the
focus should be on REAL WAGE (i.e. Wage net off costs of living and daily
expenses). It is no secret that one of the main reasons for the for Singapore's
dismal birth rates is the huge cost of starting a family here.

Dominique Dwor-Frecaut, regional economist at Barclays Capital said a 6 per
cent CPF cut "is not going to get companies knocking on their doors to set up
new manufacturing bases in Singapore.

"Low- and middle-end factories would still prefer to go to China. The only
difference it can make is in the services sector, where it may induce banks to
come to Singapore."

The CPF Cut may be a "Quick Fix" but not a Long Term Solution. Policy Makers
cannot conveniently refer to this to address every economic problem. It is not
a universal cure all. Surely Singapore's best and brightest highly paid cabinet
can do better then this.

Analysts added that introducing a flexible wage component could work to kick-
start the economy and save jobs BUT would not help cure longer-term structural
problems. Said Hugh Young, managing director of Arberdeen Asset Management in
Singapore "Ultimately, if you ask me whether it can bring about a circular
swing which is more fundamental in the long term, I will say no."

A "systemic change" is necessary for Singapore to pull itself out of the
current economic rut. They argue it needs to take bolder measures such as
further liberalisation of the domestic services sector, more encouragement of
private enterprise and even possibly going as far as implementing a looser
monetary policy.

It is conceded that the CPF is a problem. But this was a brainchild of the PAP.
And having imposed it regimentally in the past, it seems that policy makers are
now doing a 180 degrees about face, solely at the expense of workers.

Are Singaporeans seeing the results of a micro-managed economy gone awfully
wrong? And why have policy makers not learnt from their past mistakes to let
market forces regulate the ebb and flow of the economy? Perhaps it is because
wage restraint policies do not affect Ministers on a personal level.

Quote:
"When asked how the pay cut would affect him, Mr Goh admitted candidly that it
would have little impact as his children were grown up and his house paid
for, "I do not speculate on the property market. I do not have any oustanding
loans. I don't owe anybody anything. So what I have, I don't spend very much."
- Straits Times, on how the 10% ministerial pay cut would affect PM Goh Chok
Tong, Mar 23, 200

Lee Han Shih hit the nail on the head when he noted;
"It is telling that the first thing the government does to help get jobs for
Singaporeans is to start up yet another statutory board, the Works Development
Agency, which presumably generates some new jobs for civil servants."

---------------------------------------------------------------------------------------------------------------

26 August 2003 2104 hrs (SST) 1304 hrs (GMT)
Channel News Asia

Singapore's labour costs higher than US, Australia: DPM Tan

By S. Ramesh

It is more expensive to hire a worker in Singapore compared with the
United States and Australia.

That's the finding of a recent report by a risk consultancy, and this
says Deputy Prime Minister Tony Tan, is a major concern.

Speaking at Sembawang Shipyard's National Day dinner on Tuesday, Dr
Tan reiterated the need for a lower CPF contribution rate to slow
down the rate of companies relocating elsewhere.

He said PERC's July report compared the average labour costs in a
number of Asia-Pacific countries, rating them from zero to 10.

As expected, China was a clear winner in the lowest labour cost
category, with a grade of 2.00.

Singapore was rated fourth highest with a grade of 5.50.

But what's alarming is Singapore's grade was higher than that of the
US with 5.07 and Australia with 4.90.

This means it is more expensive to hire a worker in Singapore,
compared to a similar worker in the US or Australia.

Dr Tan said: "This to me is a profoundly important statistic. Simple
one, but it really gets to the nub of the problem. We have priced our
labour out of the market. And when we do that, even when demand comes
back companies will not expand their operations here."

And Dr Tan said, a high rate of CPF contribution is a major rigidity
in the wage structure.

Also, from the point of view of companies, income tax is a tax on
profits which the company makes, but CPF contribution is a tax on the
company's cash flow.

With a lower CPF rate, companies will immediately have more money to
finance operations and be viable, thus saving jobs.

Dr Tan said Singapore had no choice but to reduce CPF contributions
substantially and quickly, if jobs are to be saved.

"If this proposed reduction in CPF contributions is to have a maximum
impact, it should be done as quickly as possible and the more
substantial you make the cut, it is more likely you won't have to
make another cut down the road," he said.

And he had this assurance for all Singaporeans.

"No Singaporean will lose his or her home or be denied medical care
simply because of the CPF cut...we will look after Singaporeans and
we should look after Singaporean workers because we have a
responsibility," he added.