By: Ong Liang Wei
Almost immediately after Lee Hsien Loong took over as Prime Minister, our country was flooded with so many low-skilled workers that companies operating here had few incentives to focus on productivity.
When such manpower and immigration policies were sustained from the years 2005 to 2011, we not only had a weak growth model but numerous resulting social problems as well. It is natural for companies to choose the cheapest option in an abundant labour market, resulting in both local PMETs being at risk of retrenchment and an over-strained infrastructure.
Even as this infrastructure has improved since GE2011, more worms from the past has come back to haunt us. The effects of such a flawed economic policy are hard to reverse.
Consider a basic economic theory: Wages will rise without any meaningful impact on productivity when the there is full employment in an economy. This is because companies have limited choice when they wish to hire labour and have no choice but to pay more wages to attract labour when supply is limited. Despite the increase, there is no better productivity.
So when wages have improved substantially when productivity have not kept pace, it is just a very big sign of major trouble for the economy.
So now businesses face a double whammy of wage inflation without an accompanying increase in productivity, and high rental accompanied by declining sales. In a global economic slowdown PAP’s growth model does not give confidence to Singaporeans.
What’s more disheartening is, the PAP Government did not stop at importing low-skilled foreign workers which artificially depressed wages of local blue collar workers, but it also allowed the market to be flooded with fake foreign talents to compete unfairly for PMET jobs with middle class Singaporeans, all in the name of GDP growth.