Singapore Finance Minister Tharman Shanmugaratnam has been flogged on the Internet because he warned that Singapore could face inflation if companies increase wages to help workers cope with the higher cost of living today.
Now on some degree I agree with him, after all Singapore's economy suffered a 6.6% decline in the second quarter. What I disagree with him is what's being done to help Singaporeans cope with growing inflation. If increasing wages is not the answer the Singapore government want, what is?
Singapore's competitiveness and the ability to create jobs has not been affected by the global slowdown thus far, as proven by record profits in a booming economy in 2007. However, our competitiveness will be affected if Singaporeans workers are unhappy with their paychecks. Wage stagnation in line with inflation is a problem that GST credits and Workfare Income Scheme will not solve, especially when inflation will be between 5-6 per cent on average this year.
What's more there's no reason to believe inflation will be lower towards the end of the year. Global oil prices are almost at US$150 and most expect that it will cross that mark before the end of the year. Inflation pressure will increase when that happen.
Mr Tharman said that raising wages is not the answer, so what is the answer? Mr Tharman believed that the lasting solution to inflation is to continue with efforts to help workers upgrade their skills and earn better wages. However, that only works if there are jobs you can upgrade to. Which will be hard to find when your economy just slumped 6.6% for the quarter. Also the credit crunch crisis in the United States and Europe has not yet been solved. Singapore is heavily dependent on world trade, and the slowdown in the U.S. and Europe will continue to be a drag on Singapore's growth. Mr Tharman himself had said that the weakness in the US economy could extend into next year.
So upgrading skills as the way to fight inflation? Sorry, I don't think so.
6 comments:
What he means is multi-task lor...
Be toilet cleaner not enough, must also learn how to make coffee, tea and kaya toast...
I can imagine what good stuff people will put on the toast for him...
Then, they better not ask for any pay increase. In fact, he should even lower his pay, it is still enough to fight inflation with their kind of pay.
Ask him not to TCSS, ever ....
2 things i want to mention here.
1) upgrading skill may let u hold on to current job for as long as the employer dun start "cheap & easy" alternatives - such as outsource your job or hire foreign workers from China.
2) it seem the million dollars salary has increased our Finance Minister's IQ, but definitely not EQ. He got the cheek to continue their perks, increments and bonus.
If these so called "elites" are the best people to run this country, USE YOUR BRAIN! WAKE UP OUR DEAR CITIZENS! WE HAVE SLEEP LONG ENOUGH!
The strange thing I find is that he said that upgrading is a way to fight inflation. That has to be a world first.
I fear that anger has permeated cyber-SG ... but the Gov knows what makes SG tick.... SG will still get by without harm from cyber-space... Remember - the gov is populated by people with IQ greater than ours combined...
I fear having a higher IQ doesn't meant u will not make any mistakes, or that u will not have a crazy idea once in a while. Upgrading as a way to fight inflation is a crazy idea that if works will rewrite the study of fighting inflation throughout the world.
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