‘Slower growth means fewer job opportunit​ies’

Dear Minister Khaw,

I refer to the 30 May 2011 Straits Times report of your comments at the Sembawang GRC Youth Executive Committee’s policy forum.

You said the government thought it was important to bring wages to people’s pockets in order for the country to grow and catch up with other countries. While the country has indeed grown and caught up with other countries in terms of GDP, it didn’t translate to wages in people’s pockets. The record GDP growth last year didn’t translate to record wage growth.

You also said the government got the message that the people do not want so much growth. The government got the wrong message. Growth can come from three areas – labour, capital and productivity. We do not want growth that is nearly entirely fueled by labour growth. We want productivity growth which will allow wages to grow.

You said accepting slower growth means starting pay also comes down. Not necessary. Even if labour growth slows, as long as productivity growth increases, wages will grow and so will starting pay. Over the past four years, starting pay hardly went up while flat prices went up by one, two hundred thousand dollars, the direct consequence of growing labour without growing productivity. If sacrificing one, two hundred dollars of starting pay allows housing prices to come down by one, two hundred thousand dollars, I think young people wouldn’t mind the trade-off.

To think only in terms of labour growth and nothing else is to tell Singaporeans that the government is bereft of ideas to grow the economy except to pile on more people.

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