Scary Friday

Scary Wage Freeze

Friday the 13th invokes nightmarish characters like Freddy Krueger, not a mild mannered professorial type like Lim Chong Yah. Yet he has managed to instil fear island wide in a pretty short time with his "shock therapy" - the clarion call of  a 3-year plan for a wage freeze for top earners ($15,00 and above) and a 50 percent or more wage rise for those earning less than $1,500.

What scared Lim was the Gini coefficient creeping from 0.454 in 2001 to 0.473 in 2011, a whisker's hair from the "danger levels" of wage gap disparity. Globally, income inequality is disconcerting because of the threat it poses to social stability. Not that we will ever have winds of change as in Egypt or Syria, more likely the Leopard 2A4 tanks will be rolled out in a reprise of TianAnMen. Still, it could be as messy as a Freddy Krueger production.

What scares Lim's detractors are:
Scary foreign talent loss- people who leave just because they won't be getting 5 percent more automatically each year. For these lot, who have no intention of ever serving in NS anyway, it's good riddance for them.  If they wanted to go, they would have left already.

Scary unemployment - have no fear, if labour intensive sweat shops shut down, workers will move on to higher productivity operations. That's what happened in 1979, low tech textile workers ended up as assembly line operators in outfits like Hewlett Packet manufacturing, wiring components instead of threading buttons - exactly what was intended, breaking out of then low-productivity and low-wage economy.

Scary high inflation - the oil supply shock was the bad guy during the 1970s, not the NWC recommendation fall-out. Since MAS is maintaining its strong SingDollar, lose no sleep over that fact that 80 percent of our goods are imported. What we should worry about are the sources of domestic inflation - electricity tariffs, transport fares, housing COVs, and money making scams like the HSA charges for evaluating medical devices.

Scary implementation issues - 60 percent of the workforce is covered by NWC alone. In 1979, the NWC rammed the major wage reform through, why should they change loyalty now? He may not have Dr Winsemius at his side this time, but Lim's daughter is still married to Number 2 Son.

One suspects the scaredy cats, masquerading as nattering nabobs of negativism, are the guys whose wallets are at knife's edge. Think of the many MPs whose allowances have breached the stratosphere, with no associated productivity gains whatsoever to show of. These are the chaps most likely to say, "If there are no Sunshine bread (with ex-SMRT Saw at the helm), let them eat cake." Let them taste the electric volts of the shock treatment.