Monday, October 01, 2012

Please shed more light, MTI

I applaud the effort made by the Ministry of Trade and Industry (MTI) in publishing the Occasional Paper on population and the economy. 

From Freddy Liew Chian Fatt

It laid out the demographic issues Singapore faces and the need for foreign workers to sustain economic growth, with case studies to allow for better understanding of the need for foreign workers. This bodes well for the Singapore Conversation.

However, what has not been studied are the reasons why Singapore is seeing real Gross Domestic Product (GDP) grow at a higher rate than that of household income.

This is in contrast to countries like Australia, Norway and Finland, where household income growth rates are higher than that of real GDP.

Is this due to firms gaining more of the profit share than employees? Could this be explained by weak labour union powers or the availability of foreign workers? Or are workers in general lacking the skill sets needed to command higher pay? I hope the MTI can shed more light on this.

Furthermore, there could be more effort made to evaluate the issue of job losses and how the retrenched and unemployed have successfully been re-employed in better-paying jobs.

More could be done to showcase retraining schemes and how jobs have been redesigned instead. I think this could benefit employers and employees more.

The Occasional Paper goes on to dwell on issues of demographics and the need for foreign manpower. However, as a mature society, I think the public would be better informed if the MTI published facts exploring both sides of the argument.

The paper seems biased towards our need for foreign workers, but it would be good to know the repercussions of the inflow of foreign workers as well.

For example, simulation studies could be done to assess how Singaporeans with income below the lower-quartile have been affected by foreign workers, and whether incomes have been depressed and whether jobs have been displaced. I believe providing Singaporeans with both sides of the story will make for fairness in any occasional paper.

I hope that the impending White Paper from the National Population and Talent division will be more comprehensive and rigorous. Most importantly, the paper should answer questions and present direct benefits for Singaporeans.