berthahenson

The economy is in labour

In News Reports on November 1, 2014 at 1:24 am

Every time I see the phrase “good news’’, I ask myself if the news is really “good’’. So when the ST says that the “good news’’ is that “with the economy at full employment, wages will continue to rise’’, it looks like everything is “good’’. Sure, we all want to earn more, but what’s the point if things cost more as well, or rather, even more than wage increases?

We clap ourselves on the back that unemployment is low, so we don’t see that redundancies are increasing. It was 2,710 in the third quarter last year, and its 3,400 lay-offs now. It’s also been increasing every quarter. We clap again when we see that the unemployed have been re-absorbed. We look at how jobs are being created in the services sector, but fail to see that it is also responsible for most of the redundancies. And that redundancies for the year have hit a five year high so far this year.

Oh! And we keep reading about the wonderful young people who leave good paying jobs to pursue their dreams of running a café or a restaurant, or make chocolate, or bake cakes – all of the higher price kind. I thought there was a labour crunch so I guess they must be paying more for staff. I wonder if they are wooing away staff from other – cheaper – F&B outlets which will then have to close because they can’t get staff. I wish MSM checks back on these people a year or two later and see if their business survived. After all, we all know of outlets which close, usually citing staff shortage and rising rentals. And we wonder why food is getting more expensive….

Okay, there are the cautionary phrases from the usual economics experts about the low productivity of our workforce. We pay more, but we don’t produce more, so it’s people like you and I who end up paying more for everything.  We’ve heard enough about our patchy productivity record and how the target of 2 to 3 per cent annually by 2020 looks like a pie in the sky. Yesterday, the ST had this weird phrase in its Page 1, that DPM and Finance Tharman Shanmugaratnam acknowledged the patchy report card and said this: “ Almost all the gains were achieved in 2010 when we were recovering from the session.’’  What does this mean? Is it meant to be a response to detractors who have criticised our productivity efforts? ST didn’t elaborate on this point. Other MSM didn’t pick up on the phrase.

It seems though that we could be moving away from overall productivity figures to focusing on different sectors. The G is taking aim at construction, which grew 1.2 per cent annually between 2010 and last year, according to TODAY. Its productivity actually fell in the first half of this year compared to last year. It’s one of the laggards, which include services – and they might well be pulling down overall productivity statistics and eclipsing the good work of other sectors. What’s the new thing? The current 15 per cent of higher skilled construction workers in the industry is to be raised to 30 per cent by 2020 through a quota system for foreign workers . Every construction firm is to gradually raise its proportion of skilled labour – and will be rewarded by lower levies for them compared to unskilled labour.

So many things are happening in the economy. Beneath our efficient and glossy surface, businesses are opening up and closing down; people getting laid off and re-employed; bosses are wondering if they should re-locate their businesses or how to pass costs to the consumer; there are so many grants and subsidies to take advantage of by both workers and employers that it is really a business of its own.

I wish the messaging was more direct. If the news is bad or will be worse, just say so instead of sugar coating bad points or doing the usual “on the one hand, on the other’’ analysis. Experts might be able to cut through the thicket, but the people might need a bigger jolt. Because the usual “we must raise our productivity’’ statement is getting tired and no longer good enough.

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