PM: Growing economy best way to boost wages

He warns against over-reliance on handouts, protection as way forward

Growing the economy is the best way to help raise wages for the Singaporean worker, said Prime Minister Lee Hsien Loong on Wednesday as he cautioned against an over-reliance on government handouts or protection as the way forward.

Singapore thus needs to attract quality investments that create better jobs, restructure its economy by raising productivity, and invest in the future, he said at the annual May Day Rally.

He was speaking to 1,600 union leaders and guests gathered at the National Trades Union Congress' Downtown East Leisure Centre, after labour chief Lim Swee Say had given the labour movement's annual report card.

Wages were clearly a key concern among those present and they applauded when Mr Lee quoted Amalgamated Union of Public Daily Rated Workers general secretary G. Muthukumarasamy telling him over lunch last month: "The most important thing workers want is just raise our wages."

Mr Lee noted, however, that raising wages without growing the economy will lead to a zero- sum game of higher pay for some workers and lower ones for others. Or else, firms must accept lower profits or the Government must run a deficit, which is not a win-win or sustainable solution.

"If we can grow the economy, produce more, become more prosperous, we can distribute, everybody can have a share and everybody will be better off," he said.

While efforts to raise productivity have yet to bear fruit, the Prime Minister was upbeat about the country's future and the economic restructuring efforts so far.

He noted that Singapore was still in better shape than other countries and added that a lot of the problems here are shared by others. PM Lee said, for example, that former US secretary of state Hillary Clinton had asked him during his visit to the United States last month how Singapore tackled income inequality and helped low-wage workers.

The Government is determined to tackle problems and improve workers' lives, he said, as he outlined the improvements to transport and housing, and strengthening of safety nets and schemes to help vulnerable workers.

Mr Lee also noted the progress of various programmes in helping older workers stay employable, boosting the pay of low-wage workers and ensuring better protection for the professionals, managers and executives.

Even as he spelt out these measures, Mr Lee said: "Government transfers or protection cannot be the fundamental basis on which we improve our lives."

One of the three solutions he identified to enlarge the economic pie is to keep welcoming quality investments that tap on higher-level skills, add more value and benefit the wider economy.

But he cautioned against taking Singapore's high international standing with investors for granted as the global competition for investments heats up.

He cited Singapore's industrial park joint venture with Vietnam, which faces an aggressive Vietnamese competitor, Saigon Hi-Tech Park, for high-tech investments.

Mr Lee said: "They've got good workers who are hard-working, who are hungry, who are bright, who will be attractive if they can get their whole system right. There is still some distance to go, but they want to eat our lunch."

Similarly, he said Singapore has to be very careful as it tightens the inflow of foreign manpower: "We must not send the wrong signal that Singapore no longer welcomes business or that we are turning away talent.

"We have made a name for ourselves, not necessarily the cheapest place, but a competitive and dynamic city that is worth paying a premium for. And we must keep that reputation. Otherwise, we are dead."

The Prime Minister and other ministers, including Acting Manpower Minister Tan Chuan-Jin, witnessed union leaders making a May Day resolution to be an active partner in Singapore's economic restructuring.

Singapore National Employers Federation president Stephen Lee said later: "We are fully supportive of NTUC's approach to look at raising wages and raising capability at the same time in order to keep the economy competitive."

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