Friday, April 13, 2012

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.


  1. Brilliant Post. Happy Friday to you too!

  2. agree with you fully. Its high some academic talk some sense into our A team's brain !!

  3. sorry, i mean its high time ....

  4. What is scary is that such recommendations are from academics, and not noise from netizens. It must be very discomforting to the establishment for somebody from the inner circle to voice "dissent" Have the MIWs run out of yes men? Interesting times we shd be seeing in the future.

    1. Discomfort to them, but comfort to citizens. Otherwise, everything that Yale had said about academic freedom is true. There're still plenty to improve..

  5. You know what is scary?

    How one guy can go from saying this:

    "Repression can only go up to a point. When it becomes too acute, the instruments of repression, namely the army and the police, have been proved time and time again in history to have turned their guns on their masters."

    to this:

    "Without the elected president and if there is a freak result, within two or three years, the army would have to come in and stop it"

    1. LKY's words do not haunt us now..
      What UK PM Cameron said to Najib is true..that MY has the leadership to repeal the ancient law on ISA..
      Now THAT should haunt our PM & DPM Teo to reflect.

  6. Another example of the scary 180 degree or possibly the revealing of true nature of one influenctial man.

    From this -

    "Let us get down to fundamentals. Is this an open, or is this a closed society? Is it a society where men can preach ideas - novel, unorthodox, heresies, to established churches and established governments - where there is a constant contest for men's hearts and minds on the basis of what is right, of what is just, of what is in the national interests, or is it a closed society where the mass media - the newspapers, the journals, publications, TV, radio - either bound by sound or by sight, or both sound and sight, men's minds are fed with a constant drone of sycophantic support for a particular orthodox political philosophy? I am talking of the principle of the open society, the open debate, ideas, not intimidation, persuasion not coercion..."

    To this -

    "I won because I've persuasive powers. I can speak to the people over the blather of the media. In a way, I'm like a local Ronald Reagan. And I deliver. When I say I'll do something, they know I'm going to do it. So when I say I'm going to fix that guy, he will be fixed. Let's make no bones about it. I carry my own hatchet. If you take liberties with me, I'll deal with you. I look after myself because when you enter a blind alley with the communists, only one person comes out alive and I have come out alive. So, I'm not afraid of going into an alley with anybody, let alone the foreign press. What can they do to me? Can they influence my votes? They can't."

    That is scary.

    What also scares me is when meritocracy devolves to cronyism.

  7. Is this the scary historical origins of the lightning logo?

  8. The Great Dictator - speech (4 minutes only)

  9. We Have A Nightmare On High Street!

    On top of Lim Chong Yah's "shock therapy", someone should really take a hard look at Singapre's tax regime. This is another way of bringing down the Gini-coefficient and reduce income inequality - by taxing the rich more. Before 1986 Singapore's top rate income and corporate tax was 40%. Now the high income earners and companies enjoy one of the lowest taxes in the world since 2007. This is why our Gini-coefficient is going - south? north? nowhere?

    Tax rate on above 320,000 20%
    Tax rate on corporate profits above 300,000 SGD 17%
    Tax rate on capital gains 0%
    Expat tax capped at 17%
    etc ...

    In 2008 Singapore abolished the Estate Tax because ... "The move will encourage Singapore to become a attractive place for wealth to be invested and built up, whether by Singaporeans or foreigners".

    With 0% capital gain tax, someone can make a killing in the financial market without paying a single cent in taxes. Without estate duty, beneficiaries of a multi-millionare get to keep all the riches. The CEO of DBS earns over $8 million a year, and pays only 17% in taxes? What about our multi-millionaire ministers, GIC/Temasek/GLC executives, real estate developers, bankers, CEO's etc?

    Singapore is a haven/heaven for the rich now.
    Here the rich not only have the cake, they get to eat it too. We have the highest percentage of millionaires in the world - no wonder cost of living keeps going up. Yah, Singapore is business friendly - maybe too friendly! I like what Obama is doing - The Buffet Rule!

    1. Not only they get to eat the cake, but also choose the icing too.
      This govt has been unable or unwilling to contain inflation..that much is true for everyone to see. They just can't wait to reach the mckinsey scorecard of $90k/per capita GDP...

  10. What's the scariest is this..we always say black cat, white cat as long as it catch mice...well, what happens if the reality today is :

    White Cat AND Fat Cat and they no longer want to get their fur coat dirty and their fat ass moving?

    That's why you have all these Procurement lapses where god knows how many $millions are gone, and all the rat infestations everywhere in SG lonkangs. These are just symptoms manifesting itself in reality plane.

    1. you expect white and fat cats to catch mice? lolz i think they prefer salmon fish grilled and delivered to their silver platter. now they blame us citizens for not showing social gd habits to keep the longkang clean, even in pm's own backyard too.

  11. When the cats stopped catching rats, be careful that plagues are on their way in.