PM Lee: Globalization creates jobs and boosts salaries for S’poreans

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Yesterday (10 Jun), during his holidays in Australia, PM Lee was interviewed by Australia’s ABC Radio National. He told ABC that globalisation can create jobs and raise salaries for Singaporeans.

PM Lee sees globalisation as a creator of jobs and booster of workers’ wages. This is because as a globalised nation, “we can play a role which is servicing the region, which is servicing the world”.

In doing so, “we can have jobs in Singapore which are better paying for a wide range of our people,” he said.

However, Nobel laureate Joseph Stiglitz doesn’t see it that way. In an article he wrote last August before Trump became the President, he argued that globalization needs to be tamed.

At the time, he criticised the 2 economic initiatives of President Obama – the TPP between US and Pacific Rim countries (which include Singapore), and the TTIP between the US and EU – are “moves in the wrong direction”.

Prof Stiglitz saw problems managing globalization 15 years ago

Fifteen years ago, Prof Stiglitz wrote a book entitled, ‘Globalization and its Discontents’, describing growing opposition in the developing world to globalizing reforms. He observed that despite being told globalization would increase overall well-being, the people in developing countries were hostile to it.

And now, “globalization’s opponents in the emerging markets and developing countries have been joined by tens of millions in the advanced countries,” he noted. Opinion polls carried out by Roosevelt Institute where Prof Stiglitz is also the resident Chief Economist showed that trade is among the major sources of discontent for a large share of Americans. This was before Trump was elected as President.

“How can something that our political leaders – and many an economist – said would make everyone better off be so reviled?” he asked.

Untamed globalization causes stagnation of wages and global inequality

The globalization advocates would argue that people are indeed better off but they just don’t know it. Their discontent is a matter for psychiatrists, those neoliberal economists said.

“But income data suggest that it is the neoliberals who may benefit from (psychiatric) therapy. Large segments of the population in advanced countries have not been doing well: in the US, the bottom 90% has endured income stagnation for a third of a century,” Prof Stiglitz countered.

“Median income for full-time male workers is actually lower in real (inflation-adjusted) terms than it was 42 years ago. At the bottom, real wages are comparable to their level 60 years ago. The effects of the economic pain and dislocation that many Americans are experiencing are even showing up in health statistics.”

Trade in goods is a substitute for the movement of people, Prof Stiglitz noted. For example, importing goods from China – goods that require a lot of unskilled workers to produce – reduces the demand for unskilled workers in Europe and the US.

“This force is so strong that if there were no transportation costs, and if the US and Europe had no other source of competitive advantage, such as in technology, eventually it would be as if Chinese workers continued to migrate to the US and Europe until wage differences had been eliminated entirely,” he added.

“Not surprisingly, the neoliberals never advertised this consequence of trade liberalization.”

Thus, the failure of globalization to deliver on the promises of politicians has undermined people’s trust and confidence in the “establishment”.

Strong social-protection measures needed

Prof Stiglitz argued that if globalization is to benefit most members of the society, strong social-protection measures must be in place to help the affected.

“The Scandinavians figured this out long ago; it was part of the social contract that maintained an open society – open to globalization and changes in technology,” he cited the Scandinavia countries as examples.

And the advanced countries could have introduced policies to ensure that the gains were widely shared by most members of society, he said.

But instead, Prof Stiglitz observed that advanced countries are pushing for policies that restructured markets in ways that increased inequality and undermined overall economic performance; growth actually slowed as the rules of the game were rewritten to advance the interests of banks and corporations – the rich and powerful – at the expense of everyone else. Workers’ bargaining power is weakened. Financialization continues apace and corporate governance worsens.

In conclusion, Prof Stiglitz said that the problem was not globalization, but how the process was being managed.

“Unfortunately, the management didn’t change. Fifteen years later, the new discontents have brought that message home to the advanced economies,” he noted.

Problem with PM Lee’s solution to globalization

In Singapore, PM Lee’s solution to those Singaporeans affected by globalization is “training, skill upgrading, skillsfuture”.

He launched the so-called skillsfuture initiative to provide “Singaporeans opportunities to develop to their full potential”. He created the SkillsFuture Credit, which allows Singaporeans to get an initial $500 of credit to spend on training programmes so as to upgrade themselves.

PM Lee: SkillsFuture provides Singaporeans opportunities to develop to their full potential, whatever their starting…

Posted by Lee Hsien Loong on Sunday, 23 August 2015

“At the heart of our economic transformation is the need to ensure that Singapore continues to offer the right jobs, our workers have the right skills, and there is a good match between the two,” he said.

So, looking at the SkillsFuture website, one might ask that how does attending a $285 1-day time and stress management course or a $185 advanced accounting course help a Singaporean affected by globalization to get a new job?

Source: http://bit.ly/2t8J6SV
Source: http://bit.ly/2reh7od

How is globalization boosting our workers’ wages by upgrading themselves with such courses? How are we servicing the world with such courses?

Instead, for example, we are finding foreigners on tourist visa able to get jobs easily here like this Briton, depriving our own people a chance to get the job:

“A Briton writing in a Forum for Expatriates explained how he came to Singapore with the explicit intention of securing a job, and how he got one two months after arriving here on tourist visa. He said that his Employment Pass was approved recently and that he would be starting his new job on 12 June. The foreigner was enquiring at the Forum if he could go on a short trip out of Singapore for a holiday with his wife before starting work.”

Briton found job in Singapore after arriving here in tourist visa 2-months ago

Of course, PM Lee might just argue that the Brit has got the skills for the job and we don’t.

Prof Stiglitz a true economist while PM Lee a mathematician

Prof Stiglitz is truly a renowned world economist.

He is the recipient of the Nobel Prize in Economics in 2001 as well as the John Bates Clark Medal in 1979. He teaches at the prestigeous Columbia University and co-chairs at the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD. He is the Chief Economist of the Roosevelt Institute and a former SVP and Chief Economist of the World Bank.

During the Clinton administration, he was also the Chairman of the US president’s Council of Economic Advisers, advising President Clinton on US economic policies. The federal budget went into surplus during Clinton administration.

Meanwhile, PM Lee is said to be very good at Mathematics according to the Cambridge professor who taught him. So, who would you like to believe as far as issues of globalization are concerned?

Source: Facebook

60 COMMENTS

    • Not strange…..they are damn stupid, no visions n foresights. They are killing locals n foreigners are taking S’pore as a stepping stone. Only want to hear what suit them. RUBBISH

    • Singaporeans the (70% are mostly newly minted citizens) are so clueless that at the end of the bargain they hurting and digging a hole for themselves and their family.

    • How Lian Chan you mentioned 70% I reckon must be the voting result. Well, it is very unlikely the ruling party would be voted out because apart from the new citizens, civil servants are almost 100% supporting due to job security. In my opinion, this civil servant percentage of votes must have been overlooked by the opposing parties. Just my opinion.

    • If we are stupid, then China ?? is more stupid by giving away 10s of billions dollars, when their 40 + millions people living with US$1.00 per day..

  1. Well, the prof is right while the despot has demonstrated how he failed miserably in managing globalisation leading to Singapore sinking to its worst in last 30 years. Social inequality is at its highest since his charge.

  2. Once again, a recent case highlights the reality – a Jpn bank employs a whole bunch of ‘senior’ ppl from India. Jpn is known for its prohibitive laws admitting foreigners to its work force but yet a jpn coy can come here and freely employs foreigners – it shows the extent gov.sg is screwing the locals!

  3. it’s all BS of the highest degree. Hidden agenda, aplenty. We are unrecognized “citizens” in our own land. We are like stateless strangers actually, no sense of belonging.

  4. I don’t blame foreigners for taking away our jobs, in fact, I think Singaporeans brought it upon themselves when they failed to stand up for their own interest every time they were given the chance.

  5. Globalization is not benefiting Singapreans. It is a trade off with foreigners who come here to take our jobs. Singapreans loose out to foreigners when come to job employments. Foreigners create jobs for Singaporeans that what we understand.

  6. Dunno PM Lee is LKY biological son??? The way his vision looks ahead compare to his father is far wide apart, rather to say is opposite direction…..

  7. Don’t complain or rant if you have supported and voted for them. You deserve to be out of job. The 30.1% at least have tried to get rid of the white baboons.

  8. Globalization has for some years able to create jobs and boosts salaries, however, as Singapore has become more stagnant in their push for globalization, right now it is not the way anymore. It is to have more SMEs getting out of Singapore to become an MNC which can cater to a better Singapore story. Sim Woon Hoo has done it, and if the govt leads it and for companies to based more of their manufacturing in the regional SEZs, then we are becoming more global and our economy is sustainable. As of it, too much high-tech doesnt bring you much $$$. Coz, we have the region that is not like us where we breathe high-tech in everything. The $$$ from the region 500million people can be earned if we decide to go where it is.

  9. Globalization also entails the tapping of cheaper labour sources from the global markets.
    Maybe our Leader wants millions more cheaper workers from overseas to take over our jobs.
    Grant them Citizenship and they will vote for his Party. Next 79.9%?

  10. As much as I Don’t Agree with our government on certain issues, I would agree with our PM on Globalization as a Creator of jobs and boosting salaries… What Joseph Stiglitz is against is Unabated Globalization… Something that would Harm workers of Developed countries like ours due to the Much Cheaper Workforce from the developing countries…

    We Do Not have any resources and our path to prosperity has been a large part due to our successful port and our Hub status… All these being products of early globalization… We have a small market so it would be in our advantage to penetrate the market overseas… Another crucial factor for us to globalize…

    But having said that, our government needs to ensure our local workforce, especially Singaporean workforce and not just the PRs, remain gainfully employed in High Paying jobs… The recent upsurging trend of Hiring Singaporeans First need to be Further Enhanced… Those who fall through the cracks, the poor and the low income group should be well taken care of by this government who is reaping most the benefits of globalization through its Tax Revenue, Investment Revenues from its Sovereign Wealth funds and the Profits from the GLCs…

  11. Joseph Stiglitz is more convincing than someone. Using that someone’s argument about the superior talent of foreigners, how can Mr Stiglitz not be cleverer than him, his Cambridge degree notwithstanding.

  12. An economist is called an economist while a mathematician is called a mathematician for obvious reasons. Strange that the former has done the maths instead.

  13. It only creates more jobs for FT and more money for the rich. Whatever it creates for the rest of the citizens is muted by the increase in cost of everything. Globalisation supposed to make cost go down but ours go up. Thanks to a govt that hv a “red eye” attitude. They cannot accept it citizens save big money from the country.

  14. SG has been economically successful because it has always been a free n open economy. Since its founding Raffles had made it a free port where immigrants from India, China, Indonesia came to trade and settle down. Free trade has always been SG DNA and LHL is riding the gloabalisation wave to propel SG forward.

  15. The World is our market, can we close our door to the world ?

    Can 2.5 millions local born workers produce $400 billions in GDP term ?

    Where are the $$ come from for our welfare Budget of $78 billions…”local workers alone ?”

    Can local companies stay profitable without extra 3millions plus outsiders (FTs/FWs n visitors) ?
    If they closed shops, the locals be employed ?

    Without foreign maids, can your wife goes to work ?

    Without cheaper workers n staffs in Hospitals, your hospital bills be less ?

    The list can go on n on ? I like to hear alternative ideas, can someone help ?

  16. The truth of globalisation of any one country is to make the government rich and not its citizens. Its citizens got to face and bear with all the consequences due to globalisation!!!

  17. Yes great that we disallowed all airlines to be landed in Singapore so that SIA can fly from changi to jurong exclusively. Only Singapore for Singaporean only to protect the job of all Singaporean. Great ideas by our Singaporean economist Goh Meng Seng who is currently hiding in Hong Kong from Globalization. Lol

  18. Singapore is way way ahead from other countries in Southeast Asia and even other countries of the world.
    I think the people there should be thankful and count their blessings.

  19. Russians play GO, Chinese play Weiqi, Americans play checkers, Malaysians and Philippines play dumb (draughts). But our scholars (with no global experience, business operational background, very good A level and university grades) leading the civil service, to play SNAKES and LADDERS !

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