Yes indeed, if you go to a village Swaziland, you don't expect
to be able to buy a dual core laptop. If wages are low, one cannot
expect air conditioners, television, laptops, cars and all the
comforts of modern life. To have a higher standard of living, the
population must have sufficiently high wages to support it.
Consider China, it is only with the improvement of the economy,
with higher wages of the Chinese in recent years that we see the
streets of Beijing jammed with cars rather than bicycles. The basic
rules of demand and supply dictate that the standard of living can
only rise if wages also rise. If people cannot afford to pay for a
more comfortable lifestyle, the demand will drop, and so too, will
the supply.
Are our wages increasing? Yes, they do...not for everyone but
enough Singaporeans have seen their wages increase to create the
demand for the latest mp3 and duo core laptops. Perhaps they are
just the elite? Yes, perhaps they are but if so, the elite group is
big enough to create the demand for the ever increasing car
population (despite the high costs of car ownership), the rising
house prices and the increasing number of Singaporeans who go
overseas for holidays and studies. In fact, our wages have
increased too much relative to those of our competitors, which is
why locals are losing their jobs to foreigners who are able to
acquire similar skills.
For example, a local bricklayer is paid S$65 per day, whilst a
foreign worker in Singapore doing the same job is paid S$23 per
day. A bricklayer in neighbouring Malaysia is paid only 10 ringgit
a day. Singaporean bricklayers will have to be three times as
productive as the FT in Singapore and 10 times as productive as his
counterpart in Malaysia. Is it any surprise that employers find it
difficult to employ local bricklayers?
(Source: http://www.icoste.org/laborsteel.htm)
If we pay our bricklayers less, perhaps we can get our houses at a
lower price, but these bricklayers will have difficulty coping, as
you would say. Although I think house prices will not be affected
much in this instance because in land scarce Singapore, it is the
land costs that push housing prices up...that and the fact that
there are people who earn high enough wages who are willing to pay
a higher price.
The problem about the cost of living is therefore a combination of
higher wages (than our competitors) and the fact that the
distribution of wealth in Singapore is becoming polarised. It is
true that the rich are getting wealthier and the poor are getting
poorer. There are enough people who are getting higher wages to
support the higher costs of living in Singapore. On the other hand,
the poorer Singaporeans are also the ones whose skills cannot match
those of our competitors who are far cheaper. Hence whilst one
group sees its wages dropping because of competition by FT, another
group enjoys rising wages sufficient to prop up the higher costs of
living in society.
The challenge applies to everyone in all fields. Diagnostic
radiologists expect to see a drop in their salary (and in fact,
even lose their jobs) because we now outsource X-ray reporting to
India. On the other hand, cosmetic surgeons performing boob jobs
and eye surgeons doing laser keratoplasty (to correct
short-sightedness) enjoy ever-rising wages. There are enough of
these surgeons who can bid top prices for COEs and pay millions of
dollars for condos to ensure car and house prices remain
high.
The way forward is to constantly evaluate our own competitiveness
and either upgrade or switch vocations entirely as the economy
re-structures.
BTW, if you are trying to blame the LCD screens for the rising MRT
fares, that is not true. The LCD screens are more than sufficiently
paid for by the companies who put up adverts...the cost of
installation is not the reason for the rising train fares.