Singapore and Globalisation
I studied basic economics in JC and learnt that in most cases low price means more demand and vice versa. I also learnt that there were luxury goods, This means that the demand of these goods could be relatively high despite stagnant or moderately increasing prices. I also learnt of goods with inelastic demand, goods that had a very steep demand curve and the demand for these goods would remain high despite price hikes. (cigerettes, alchohol, petrol. etc)
Ok, I grasped the fundementals of demand and supply, or so I thought. I reckoned that wage levels would be determined by the same market forces that dictate acquisition of goods. Well, I was only partially right, because I didn't understand that markets were merging. Two years ago, the wealth management industry began to grow and the demand for private bankers grew proportionately. In fact, today there is still a shortage and because of that, their wages are relatively high. Inspiring.
Just what is THE MARKET? The market which encompasses the intangible pull and push of demand. The market is US. We are the market, when people do business they always term markets in-terms of geographical locations. (eg. Singapore market, China market, USA market). Or more specifically demographic markets. (eg. Baby boomers, Gen X, Gen Y). However the barriers between world markets are slowly eroding.
Enter Globalisation.
Singaporeans who take a personal interest in economics don't really like the term "Globalisation". Why? Globalisation often challanges minimum wage, previously secure job markets and entire industries. No one can escape globalisation. But just what is globalisation? Globalisation opens up a world market, where individuals & organisations are free to trade with each other, eroding geographical boundaries and information barriers. It simply enlarges the market to a world economy.
Implications:
Lets say local cleaners are willing to work for a paltry S$700 a month. That's barely enough to survive, let alone live comfortably. Bangladesh workers are willing to work for maybe S$400, because they don't bear the full brunt of living expenses here. Even sending back S$100 home is able to feed their families for a whole month. Therefore, market forces dictate that the most cost-efficient way for cleaning companies is to hire a bangla cleaner. The poor Singapore cleaner goes out of a job because taking a wage cut to $400 is suicidal.
Also, Singapore's manufactoring industry is in decline, operations are being shifted to China and India where the labour costs are low and profit margins are higher. We lose jobs because we can't compete in terms of wage levels.
Simply put, globalisation opens more alternatives, which is great, if you are a consumer. But it's also bad if you're a middle aged fella in a middle-management position, because you're an expendable commodity. Face it, if I can employ someone cheaper to do your job, why shouldn't I? That's why job security has been an issue in Singapore for years now. It's not the PAP's fault as many people think. (Although I stand firm the Govt is there to help us. If not, why the heck are they there?).
What can we do?
Frankly, we can't do squat. Every country is affected by globalisation, we're just a tad worse-off because we don't have any land or natural resources. LKY stressed that one of the commodities we can produce is 'intellectual property'. He's a very smart man but we aren't as smart as him. With a population of only 4 million people and with an uninspiring and rigid education system, what kind of 'intellectual property' do we expect to come up with? Even if we have the highest proportionate number of inventers, America will still whoop our asses because they have more in absolute terms, that's what counts. How many Sim Wong Hoos (creative tech founder) do we have? Even he is growing more white hair trying to fight the IPOD.
Maybe we should expand our boundaries and look beyond our polluted shores, over the horizon of industrial ships and our haze filled skys. The notion of graduating, working, buying a condo and car is gone. It's simply not true anymore, maybe for our fathers' it was true, but the notion is gone, dead and buried. Don't limit yourself, explore job opportunities elsewhere, don't close off that option, dare to dream and maybe you will end up better off than the rest of us.
I studied basic economics in JC and learnt that in most cases low price means more demand and vice versa. I also learnt that there were luxury goods, This means that the demand of these goods could be relatively high despite stagnant or moderately increasing prices. I also learnt of goods with inelastic demand, goods that had a very steep demand curve and the demand for these goods would remain high despite price hikes. (cigerettes, alchohol, petrol. etc)
Ok, I grasped the fundementals of demand and supply, or so I thought. I reckoned that wage levels would be determined by the same market forces that dictate acquisition of goods. Well, I was only partially right, because I didn't understand that markets were merging. Two years ago, the wealth management industry began to grow and the demand for private bankers grew proportionately. In fact, today there is still a shortage and because of that, their wages are relatively high. Inspiring.
Just what is THE MARKET? The market which encompasses the intangible pull and push of demand. The market is US. We are the market, when people do business they always term markets in-terms of geographical locations. (eg. Singapore market, China market, USA market). Or more specifically demographic markets. (eg. Baby boomers, Gen X, Gen Y). However the barriers between world markets are slowly eroding.
Enter Globalisation.
Singaporeans who take a personal interest in economics don't really like the term "Globalisation". Why? Globalisation often challanges minimum wage, previously secure job markets and entire industries. No one can escape globalisation. But just what is globalisation? Globalisation opens up a world market, where individuals & organisations are free to trade with each other, eroding geographical boundaries and information barriers. It simply enlarges the market to a world economy.
Implications:
Lets say local cleaners are willing to work for a paltry S$700 a month. That's barely enough to survive, let alone live comfortably. Bangladesh workers are willing to work for maybe S$400, because they don't bear the full brunt of living expenses here. Even sending back S$100 home is able to feed their families for a whole month. Therefore, market forces dictate that the most cost-efficient way for cleaning companies is to hire a bangla cleaner. The poor Singapore cleaner goes out of a job because taking a wage cut to $400 is suicidal.
Also, Singapore's manufactoring industry is in decline, operations are being shifted to China and India where the labour costs are low and profit margins are higher. We lose jobs because we can't compete in terms of wage levels.
Simply put, globalisation opens more alternatives, which is great, if you are a consumer. But it's also bad if you're a middle aged fella in a middle-management position, because you're an expendable commodity. Face it, if I can employ someone cheaper to do your job, why shouldn't I? That's why job security has been an issue in Singapore for years now. It's not the PAP's fault as many people think. (Although I stand firm the Govt is there to help us. If not, why the heck are they there?).
What can we do?
Frankly, we can't do squat. Every country is affected by globalisation, we're just a tad worse-off because we don't have any land or natural resources. LKY stressed that one of the commodities we can produce is 'intellectual property'. He's a very smart man but we aren't as smart as him. With a population of only 4 million people and with an uninspiring and rigid education system, what kind of 'intellectual property' do we expect to come up with? Even if we have the highest proportionate number of inventers, America will still whoop our asses because they have more in absolute terms, that's what counts. How many Sim Wong Hoos (creative tech founder) do we have? Even he is growing more white hair trying to fight the IPOD.
Maybe we should expand our boundaries and look beyond our polluted shores, over the horizon of industrial ships and our haze filled skys. The notion of graduating, working, buying a condo and car is gone. It's simply not true anymore, maybe for our fathers' it was true, but the notion is gone, dead and buried. Don't limit yourself, explore job opportunities elsewhere, don't close off that option, dare to dream and maybe you will end up better off than the rest of us.
posted by Chris @ 9:24 PM
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