Productivity & Wages – Which Is The Cause & The Effect

Who cares about productivity?

Bosses aren’t saying – raise your productivity and we will pay you more. They are saying, raise your productivity, if not, we will hire someone cheaper or someone who can do more for the same pay.

Minister Lim Swee Say:

“Job is the best welfare, full employment is the best protection for workers and productivity gain is the best driver for wage increase in the future…”

The statistics show that Singapore’s GDP has grown.
The statistics also show that Singapore’s income inequality has also grown.

So, what makes the minister think that if a worker increases his or her productivity, the company will pay the worker more? What makes the minister think that those with wealth will be more willing to share the wealth in the future?

There seems to be too conflicting messages here:

1. Raise productivity or lose your job because we can replace you with a foreigner.
2. Raise productivity so your value increases and the company will pay you more.

We know companies are doing 1. We also know they are NOT doing 2.

So telling workers to increase productivity is of no consequence in helping them if companies aren’t willing to share more of the pie. It is also of no consequence if foreign workers who are willing to increase ‘productivity’ (do more for less, do more for same by putting in more hours or taking less pay) are also allowed to be employed.

Bosses’ idea of productivity = Amount Of Work / Pay
Worker’s idea of productivity = Amount Of Work / Time

Different formulas. Think about this for a moment.

The problem is that the ministers are asking workers to bite the bullet first. Prove your worth and trust us (companies, government) to take care of you.

The correct way would be to get companies to pay more. Once you have to pay more for a worker, you as the owner of a company have many more incentives to put more systems and processes in place to get more from the worker. Or you could just overwork him in terms of hours. So the government would need to manage that abuse of overworking.

And it is not just about the company being forced to get their workers to be more productivity, for SME’s, for the want of a better word, it buys a lot more loyalty.

And what does loyalty get you?

More on that tomorrow.