12-6-75

Inflation is Out-running Wages . . .

The average industrial worker in Singapore is earning less, in terms of real wages, than he was six years ago.

And although the total value-added in the manufacturing sector has nearly quadrupled in this period, the share of the workers' wages in this rapid growth has dropped sharply in the last two years from a steady 36 percent to barely 29 percent.

In fact, in the past two years, inflation and the ensuing economic slowdown have eroded whatever gains the industrial worker had made in the four years previous to 1973.

It appears that the industrial worker has borne, more than any other group, the brunt of the economic problems that the island republic has been experiencing of late.

As the accompanying chart shows the average worker's standing vis-a-vis the manufacturing sector as a whole has weakened significantly on two fronts.

Firstly, because the consumer price index rose more sharply than the rise in real wages, a worker's real earnings last year were reduced to 16.6 percent below their 1972 level. Even against the 1967 level they are 3.7 percent lower.

In 1973 and 1974, consumer prices jumped by 22-9 percent and 22.3 percent respectively, but average annual money wages rose only by 14.5 percent and 9.5 percent.

Real wages per worker, therefore, fell by 6.9 percent in 1973 and still more sharply by 10.5 percent the following year.

Last year, although nominal wages reached a peak of $4,763 a year per worker, in real terms they amounted to only $3,136, lower than when Singapore's industrialisation process first got off the ground.

Second, the rise in the nominal wages lagged far behind the corresponding rise in value-added (or productivity) per worker.

Up to 1972, the rise in average annual wage per worker had been keeping pace with the rise in value-added per worker, so that wage increases did match productivity increases.

In 1973, however, productivity per worker climbed by 23.8 percent, while wages per worker rose by only 14.5 percent. This gap widened even more the next year, so that for 1973 cumulatively value-added was 58.3 percent higher compared to the mere 25.3 percent wage increase.

Seen another way, this has produced a rapid shrinking of the wages share of total value-added in the manufacturing sector, from 36.6 percent in 1972 to only 29 percent last year.

It exposed once and for all, the white lies propagated and clamoured by the Singapore Government of the economic improvements enjoyed by the working masses with Industrialisation. With rampant inflation and meagre wage increases the economic plight of the working class has in fact been aggravated ever since Singapore jumped into the Multinationals' bandwagon for Industrialisation. On the other hand, productivity has increased substantially and the exploiters are reaping record profits. And all this while, the Singapore Government is whining that wage increases this year must be modest and that productivity must increase—to overcome the recession.

The Singapore Government is trying further to prostitute her cheap and 'disciplined' labour force to the multinationals by proposing to extend the Tax Holiday for Pioneer Industries from the present five years to ten.)

((A week after the above article was published, the Ministry of Finance tried vainly to discredit and cover up the facts. It manipulated and distorted the figures and as expected produced a chart showing the workers' wages on a rising curve!!))

(((In the meantime, the Government's puppet trade union, NTUC with Devan Nair as its chief scab, is frantically echoing the Government's Labour Policy of self-restraint to seduce investments.)))