Jamus Lim Discusses Solutions for Rising Living Costs with Anchorvale Residents

After some Anchorvale residents spoke to Jamus Lim about the rising cost of living, the Workers’ Party Member of Parliament (Sengkang GRC) took to Facebook to write about possible solutions aside from raising salaries.

The burden of higher prices weighs especially heavily on those who live on fixed incomes, one resident told Assoc Prof Lim. The MP wrote on a May 15 Facebook page that he had covered 10 floors during a house visit 317D at Anchorvale and “had a significant number of engaged conversations.”

“As I always tell our residents (as well as #TeamSengkang), I do not believe in rushing through our visits, compromising the quality of feedback just to fulfill some vague target for block completion. Inevitably, this does mean that I have my work cut out for me in the months to come,” he wrote in his post.

One of those conversations had been about increased living costs, and Assoc Prof Lim, who teaches Economics at ESSEC Business School, wrote that it is “tempting” to turn to “some form of automatic wage increase that moves alongside rising prices,” which economists call wage indexation.

But this solution, however tempting, is not without dangers, since it can also affect inflation dynamics. He wrote that “a negative feedback loop may arise” when demands for higher salaries cause businesses to raise prices, which in turn could cause a greater demand for wage hikes.

But Assoc Prof Lim expressed sympathy for those who are struggling with higher prices. 

“Even so, as a fellow human being and consumer, I also understand that our salaries simply don’t go as far in the face of ever-rising prices. This is the story of inflation in Latin America in the 1980s and 90s.”

He then proposed alternative solutions to “automatic (and risky) wage-adjustment mechanisms,” including relief. 

He wrote, “since many items are subject to percentage taxation, the revenue for such support packages would come from a similar source: rebated taxes.”

“One way to see whether more can be done is to check if the government is experiencing any unexpected net revenue windfall. If so, there is more room (economists call it ‘fiscal space’) for relief, either with temporary and targeted tax cuts, or transfer packages to groups that are hurting,” he added.

Commenters praised Assoc Prof Lim for his post, as well as his service to his constituents.

One even wrote that it would be good if the MP could be Singapore’s Finance Minister.

/TISG

Read also: 

Jamus Lim: Resident shares concerns over migrant professionals crowding out locals – Singapore News 

Resident talks to Jamus Lim about challenges singles face in Singapore 

Resident tells Jamus Lim that higher prices are “too close, too many, can’t breathe” – Singapore News