Originally posted by maurizio13:
[b]Middle
class wage stagnation could lead to social
instability
By Pearl Forss, Channel NewsAsia | Posted: 11
January 2007 1856 hrs
SINGAPORE: Middle class
wages have been stagnant in the past 5 years, according to
economists, and this could lead to social instability.
These concerns were shared by economists at the annual Institute of
Policy Studies Singapore Perspectives conference, who also added
that the government is taking steps to address the problem.
Economists believe a US economic slowdown in business and consumer
spending may cause problems for Singapore, but as Singapore is tops
in the ASEAN resilience index, it should be able to weather
external shocks, thanks to a diversified economy and strong Asian
demand.
They predict that growth going forward will be above 3 to 5
percent.
The long-term growth limits for a mature economy was previously in
the 3 to 5 percent range.
However, economists are asking who this growth is for. The income
of the bottom 30 percent of the population has fallen. What is more
worrying is the fact that the majority of Singaporeans in the
middle class has only seen about a one percent increase in their
nominal income in the last 5 years.
This is not not just a Singapore problem say economists who point
out that stagnant wages is a global problem.
The chief reason for this is globalisation, especially with India
and China introducing a large pool of skilled and unskilled labour
to compete with the labour forces of industrialised
countries.
Singapore is susceptible to this because of its open economy.
Manpower Ministry data shows that 124,000 jobs were created last
year and 45 percent of these jobs went to foreigners.
"With the rate of immigration, even among unskilled and semi
skilled labour at a rate twice of what we experienced in the 90s,
at a rate fastest in the developed world, the question is - does
this dampen our real wages as we grow? Does the strategy itself
dampen real wages and depress real wages at the low and middle end
of the spectrums? They are sacred cows but we should step back and
think about them," said Yeoh Lam Keong, Vice President, Economic
Society of Singapore.
Another reason cited for middle class wage stagnation is the move
by the government to cut CPF employer contribution rates for older
workers by 4 percentage points over the last 2 years.
"So if you were a worker in the 50-55 age group, you could have
seen your wages fall as much as 10 percent over the last 3 or 4
years. Now with the economy improving, the government could bring
that back, the increase is 1 or 2 percent. I'm in support of CPF
tinkering but probably it happens far too often, but I think
there's probably some justification to look back and think that the
restructuring was a bit too aggressive on the CPF side and it has
contributed somewhat to a very sandwiched middle class," said Chua
Hak Bin, Director, Asia Pacific Econ & Market Analysis,
Citigroup Global Markets Singapore.
The government is looking at increasing CPF by 1 to 2 percentage
points in 2007.
Economists say workfare should become a more permanent pillar of
the economy so as to cushion growing inequality.
- CNA /dt [/b]
pls read this Gazelle, you are really a sad case. But I will be
patient and give you the report.
