An important indicator that policymakers must keep track of is that of wage share in gross domestic product (GDP). Wage share is the ratio of workers' compensation to GDP. It is a useful guide to an economy's complexities and long-term trends.
The use of wage share as an indicator was recently examined by former NTUC secretary-general Lim Boon Heng ("Getting the picture right on wage share in Singapore"; Dec 12), in a Straits Times article adapted from a memo he wrote for NTUC staff. It said that the wage component of GDP offers a useful indication of the overall structure of an economy, but he cautioned that one has to understand the local attributes and longer-term trends.