Move beyond left-right debate

Dear Mr Tharman,

I refer to the 25 Sept 2010 Straits Times report of your speech at the Singapore Global Dialogue dinner.

We should not blindly apply the flexible labour market rhetoric for every situation. Businesses such as coffee shops, supermarkets and department stores serve the local market primarily and do not compete globally. The argument that flexible labour markets help them compete with the world is not valid. Therefore, the strategies of the left still hold for the local segment of the economy. Only industries which manufacture goods for the world compete directly with the world and benefit from flexible labour markets.

Lowering the cost of living through flexible labour markets is also pointless if it means lowering our salaries as well. The gain by our consumers comes at a cost to our workers. Ultimately, labour market flexibility is nothing more than a cost containment strategy that can only bring us so far. To go really far, we need to focus on raising the value of our output, which can only come about through the creation of winning brands and products that are highly sought after all over the world.

Laissez-faire is a term that applies to the economy. It does not absolve the state from providing basic services such as clean running water and social services. One good example is laissez-faire Hong Kong which has recently passed the minimum wage law to achieve social equality. Thus, the governing model you propose is not something new but is already exemplified by Hong Kong.

While it may seem like we are promoting self-reliance through workfare, in reality, we are merely making up for our workers whose salaries have been undercut by the mass influx of cheap foreign labour.

Europe’s woes are commonly seen as the consequence of the welfare state. It is not. The problem is the great number of baby boomers who are retiring now. Removing the welfare state will not remove the need for these old folks to be taken care of which will sap the economy one way or another. Our turn will come and we are already facing increasing pressure for social welfare even though we are not a welfare state.

Similarly, it is easy to blame US unemployment on politicking but it is not something that can be easily resolved even if there is no politicking. It is simply so much more difficult to find jobs for Americans compared to Singaporeans because there are so many more of them compared to us.

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