I looked around the Internet forums, blogs and spoke to a number of people about the debate surrounding the proposal by Professor Lim. Some people are angry with the responses from our ministers because when it comes paying low income workers more, they say that productivity needs to be raised, company revenues needs to go up and the economy has to be good. However, when they debated their own ministerial pay hikes in 2006, they didn't talk about the need to increase their own productivity first - the main justification put forth by LHL was they can't recruit people if the pay is not the highest in the world. Our bus companies say they can't recruit enough bus drivers. Instead of raising the pay to a level that attracts Singaporean drivers, they go to 3rd world countries to recruit drivers. Today the pay of bus drivers in Singapore is less than half that of Taiwanese bus drivers[Link]...not just our bus drivers but our cleaners, kindergarten teachers, hawker assistants are the lowest paid in the developed world. Contrast that with the highest pay in the world we need to pay for political office holders and high ranking civil servants. Some thing has gone very wrong.....
Professor Lim, in response to criticism from ministers, said that productivity is not the issue because our workers are already underpaid for their current level of productivity.
"My position, however, is that our lowly paid workers have been underpaid by much more than 100 per cent of their pay when compared with their counterparts in countries with comparable national affluence like Hong Kong, Japan or Australia," - Professor Lim[Link]
Some are critical of PAP ministers' argument that govt shouldn't intervene in the labor market. But allowing a massive influx they have in fact intervened in the labor market and it was this intervention that brought the wages of low income earners way down:
More than 1 million non-residents added to the workforce and this number does not include the PRs and newly minted citizens. If this is not intervention, what is?
The PAP ministers also claimed that raising the wages of our low paid workers will undermine Singapore's competitiveness. This is not true. Finland, the world's most competitive economy does not use cheap labor, they have a much flatter wage distribution - you can be competitive by paying those earning low wages more and paying top executives less[India 50th, Finland most competitive nation]
How did the wage structure become so distorted? Kenneth Jeyaratnam has a very good answer - he says lets forget about "shock therapy", the answer is greater democracy[More Democracy is the solution not Shock Therapy]. A more lasting and broader solution can perhaps be achieved by distributing power in our society more equally . I was at an SDP rally in the 2001 GE and remember Chee Soon Juan telling the audience that the increasing influx of foreign workers would depress Singaporeans' pay. At that time, I think most people didn't suspect these policies would just be expanded even as the cracks appeared and widened. Nobody had the power to stop the PAP govt and Chee, in 2001, couldn't get his important message out to a wider audience as Internet penetration was limited at that time. The unequal distribution of wealth and the income gap reflects the unequal distribution of power in our society. How do we end up paying bus drivers half the amount they pay in Taiwan? It is all about power and I will tell a short story to illustrate this.
I was in Los Angeles, California in 2000 for a short trip. I was advised to rent a car to get around because Calfornia, I was told was told "every one drives" in Calfornia. It turned out that most but not all the people drive in Los Angeles - the city has a functioning public transport system which included a small subway system and buses. Given that the majority of people there drive, the public bus system was and still is relatively small and simple[LA Metro Local]. I found out there was direct bus near the place I was staying to the place where the event I was attending was held. I wanted to try the bus out before the actual event so shortly after I got from the airport to my hotel by taxi, I stood at the bus stop waiting for the bus. I waited for half an hour and there was no bus - not a single bus not just the service I was waiting for. It was a real disappointment. I stopped a passerby and asked him what was going on. He told me that the bus drivers were on strike and there would be no buses for a few days.
I found out from the news papers that the bus drivers were on strike because the bus company wanted to hire part time drivers who were cheaper and there was disagreement over wages. It was not a routine strike but the biggest strike in 20 years
"Los Angeles has become one of America’s most union-friendly cities in recent years, and the month-long strike by the United Transportation Union in 2000 confirmed that fact. The MTA was trying to introduce more low-paid workers into the transit system’s workforce and subcontract a number of formerly public services to private operators, and employees balked. Jesse Jackson, Jr. came into town to negotiate a settlement, which was two-sided, allowing more low-paid drivers for the MTA but increasing wages for union employees. To compensate for their lost time, the transit agency gave commuters five days of free rides following the strike’s conclusion. Photo source.."
- A Short History of Recent American Transit Strikes
The bus drivers together mechanics have a union of 4400 workers. The bus company was trying to save money by bringing part-timers who were willing to work for a lower pay. California had a fairly large number of immigrants from Mexico and many of them willing to drive a bus for less than half what an American bus driver was paid. The strike lasted for 32 days before a compromise was reached - wages of bus drivers would be adjusted up for inflation and a limited number of part-timers would be allowed. Today, a bus driver in Los Angeles gets a starting pay of rought US$40K and a senior bus driver working overtime can get up to US$60K. This income is sufficient to raise a family properly and have a decent standard of living. I'm sure some of you will ask who pays for this in at the end of the day? Since the bus company is owned by the state, money comes from taxes...where does most of this tax come from? In this case, the large number of wealthy Hollywood corporations, technology companies, wealthy individuals etc who don't take the bus! Only poor people take the bus in LA. and these commuters formed a "bus riders union" [LA Riders Union] to make sure that the govt does not neglect the public transport system. During the strike, the LA Riders Union was firmly behind bus drivers even though commuters were badly inconvenienced by the strike because they saw the blue collar bus drivers as people in same working class as themselves. Some of you may argue that paying drivers a decent wage when there is cheap labor available is costly for the govt. But if cheap labor is used and these bus drivers are retrenched or have their wages depressed below the living wage, the govt will have to spend on welfare, medical aid, subsidised housing etc and money on the social problems that arises due to poverty - you still end up spending the money but getting inferior outcomes for the society.
This example above serves to illustrate not specifically the power of unions but the importance of power for workers to influence the govt. Such power can come from a democratic process or a free and independent media that allows issues to discuss from multiple perspectives.
With a good education system, you can train 60% of people to tertiary eduction (poly + university):
Undercutting, bad contracts depress cleaners' pay] and this has gone on for years and nothing has been done about it.
In Singapore as independent unions disappeared, a power-elite system emerged to concentrate the power narrowly among a small group of elites to whom opportunities and along with it extremely high salaries are awarded. The network of businesses are inextricably linked to the govt, SAF and the civil service. High ranking SAF officers are parachuted to various GLCs, GIC or Temasek Holdings and the PAP recruits from the same network - you just have to look at how many cabinet ministers are from the SAF and how many generals from the SAF move on to top positions in GLCs .This system has resulted in very unbalanced policy making that led extremely distorted wage structure - on the same tiny island where ministers get the highest salaries in the world, we have the lowest paid blue collar workers such as cleaners in the developed world. Professor Lim Chong Yah mentioned that our low wage workers are underpaid by 100% ....so how overpaid are our politicians? How excessive is executive compensation?
Shortly after I heard Chee Soon Juan's rally speech about how the foreign influx would depress Singaporean workers pay in 2001, he was sued, bankupted and jailed for demanding transparency on a loan the Singapore govt offered to Indonesia during the Asian crisis[Link]. In the following election in 2006, he was not allowed to give any more rally speeches. The weakening and elimination of ideological alternatives, control of the mainstream media and putting a PAP man in charge of NTUC meant that the PAP govt can implement policies that are not possible in a fully democratic country. Today we see the extreme outcomes of these unbalanced policies.- workers who work honest full time jobs earning less what they need to live on and leaders who get paid millions for regurgitating old ideas and peddling failed solutions. Things are not going to improve for our werkers because they have little power to bring about outcomes that will make their lives better.