Thursday, July 1, 2010

Singapore workers' median wage to rise to $3100

ESC targets $3,100 median wage for S'pore worker

SINGAPORE: Raising the wages of the average Singapore worker by one-third in the next decade is one target of the Economic Strategies Committee (ESC).

This would mean moving from a median wage of $2,400 today to about $3,100 in 10 years.

Finance Minister Tharman Shanmugaratnam said that to achieve this, Singapore must have workers with top quality skills and make the island one of the top liveable cities in the world.

He was speaking at a dialogue on the ESC Report and Budget 2010.

Singapore has never had it as good as now, and for the next five to ten years, said the Finance Minister.

The opportunities play to the country's strengths and its companies.

One area is that of urbanisation, with prospects in water management and sanitation, and organising a city that's liveable.

Mr Tharman said: "Everything to do with urban management, water, sanitation, clean air, traffic management, organising a city that is liveable, that is something we have some experience in, and where we have something to offer and something we are seeing a growing number of Singapore companies developing as leading specialists.

"So it's a trend that will play to our advantage. And it's not just Asia, it's an emerging market as a whole. The number one problem that they have is water management.

"The second reason why things have never been so good for us is the middle-class services - there's a huge wave of demand emerging in Asia from healthcare, travel, better education, entertainment, financial services, things that play to our strength, things that play to the experience we have and the products we have introduced in the market over the years and we have a whole slew of Singapore companies."

But a bigger challenge is to meet these opportunities with a limited manpower.

Mr Tharman said: "It's a bit of a puzzle as to why despite a good education system, good schools system and one of the better rated university system in the world, we are not achieving as much with the workforce in terms of skills, expertise and therefore productivity - there is a gap.

"And it requires a different motivation, moving beyond paper qualifications towards wanting to become expert on the job, more of us must want to be like that.

"Not just wanting to do something competently, being honest, being diligent but being very good at it.

"And how do you get this different motivation going? It's not just about incentives, it's not the promise of bonuses, it is the feeling that they are contributing to the company as a whole and the way the industry is moving ahead.

"That motivation is important. And secondly, they want to feel empowered."

Mr Tharman went on to say: "What we really have to do when we talk about raising productivity is raise our game in every regard - higher skills, higher standards, higher aspirations, transform our economy in every sector so that we can take advantage of these opportunities.

"Grow productivity, grow wages and grow profits. That's what it really boils down to.

"The opportunities are large, the challenge of achieving growth with a limited labour supply is also daunting but we can raise our game and make the most of these opportunities in the next five to ten years."

One way is to adopt the three "R" strategy - Repositioning businesses, Restructuring processes and taking Responsibility for the quality of workers.

Manpower Minister Gan Kim Yong said: "Putting in incentives like profit sharing so that the workforce is motivated to raise their productivity and help the company improve the overall productivity.

"But productivity is also a partnership. It's not just about a company making efforts, it also involves the workers, so workers must take responsibility for their own skills upgrading."

In their efforts to enhance productivity, Singapore companies were also encouraged not to repeat some of the mistakes made in other countries.

Ministers on the panel emphasised that improving productivity levels does not necessarily mean down-sizing the workforce. Also, making workers work longer hours doesn't necessarily improve productivity.
Finance Minister aims for median income of $3,100 in 10 years' time
By Cai Haoxiang

IF SINGAPORE gets it right, the income of the average Singaporean could rise by one-third in 10 years' time, and the country will also be one of the most liveable cities in the world, not just Asia.

That was the vision sketched by Finance Minister Tharman Shanmugaratnam yesterday at a dialogue with 600 bosses, finance and human resource managers organised by the Singapore Business Federation.

Putting it in dollars and cents, he said that the current median income in Singapore is $2,400 per month. That means that exactly half of income earners earn more than this, and the other half less than this.

But if Singapore succeeded in remaking the economy and seized opportunities that played to its strengths, the median income will rise to $3,100 in 10 years' time.

And after accounting for inflation, the figure will be around $3,800, Mr Tharman calculated.

'I think we've never had opportunities so good for Singapore as what we have seen now and what we are going to see in the next five to 10 years,' he said.

'A whole wave of opportunities is opening up for us, opportunities that play to Singapore's strengths and play to the strengths of Singapore companies.'

These included in areas such as dealing with urbanisation, water management and providing services to the region's growing middle-class in health, travel, education, entertainment and finance.

Mr Tharman was speaking at a panel discussion on the recommendations of the Economic Strategies Committee (ESC) that he had chaired.

The proposals, which were unveiled in February this year, recommended new and creative ways to grow the economy for the long term. One key thrust of the ESC's report was to boost productivity growth to 2 per cent to 3 per cent annually from the dismal 1 per cent in the last 10 years.

'It's useful to ask ourselves where we want to be in 10 years' time, what is the sort of Singapore we want to see? And I would just like to highlight three facets of Singapore that the ESC thought of as being desirable and essential,' he said.

First, he said, the ESC wanted to see an economy that has top quality skills to raise incomes for the average Singaporean by one-third in the next 10 years.

To do this, Singapore needs to become a leading hub in Asia for global businesses and high-value, complex manufacturing, and possess top-notch service standards, he said.

A second facet is a substantially deeper base of local companies that were internationally competitive.

And finally, Singapore - currently ranked the 28th most liveable city in the world by human resource consulting firm Mercer - must aim to get into the top 10 of that list, and join cities like Zurich, Vienna, Vancouver and Munich.

But Singapore must be attractive not only to internationally mobile and talented professionals, but also for the average citizen to live in, he added.

Other than Mr Tharman, three other ministers were on the panel: labour chief Lim Swee Say, who is also Minister in the Prime Minister's Office; Manpower Minister Gan Kim Yong; and Minister in the Prime Minister's Office Lim Hwee Hua.

They answered a variety of questions ranging from tax deductions and productivity to the foreign worker levy.

Reacting to Mr Tharman's comments, economists said the median income target of $3,100 per month was broadly achievable.

'I don't think it's a stretch of imagination, assuming that inflation does not blow out of range,' said Barclays Capital economist Leong Wai Ho.

He also noted the significance of specifying a median income goal target, rather than just a gross domestic product growth goal.

'This implies that they will look at measures and policies that improve the trickle-down effect of economic growth,' said Mr Leong.

OCBC economist Selena Ling also welcomed the target, saying 'it's quite good to have a hard target for transparency and accountability'.

'From the Government's perspective, they must be fairly confident that they can deliver it,' she added.

But Mr Tharman also noted that outlining these goals was not the end of the process for the committee and Government.

'It's not about one report, one set of recommendations, one Budget or one set of measures,' he said.

'It's continuous work over the next 10 years: creative, energetic work across all sectors with a lot of interaction between Government and businesses.'

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