Sunday, September 27, 2009
Elevated covered walkways
I suggest a network of elevated covered walkways to link the MRT station and bus interchange to various parts of the town. This will encourage brisk walking. Read this.
Attracting business into Singapore with lower taxes
Some people argued that low taxes are needed to attract people into Singapore to create wealth and provide employment for the people.
Do not be fooled by this argument. Let us look at the facts.
The two sectors that created the most wealth and employment in Singapore were the banking and property sectors. These sectors generated huge profits and employed large numbers of people in marketing, sales and the back offices.
They created false wealth by generating a huge bubble in asset prices. Many people thought that they were wealthier when the bubble grew and the prices of their assets inflated. Unfortunately, high property price is really a burden that has to be paid over a lifetime and is a major contributor to the high cost of living in Singapore. The burden is higher for the future generations.
The bubble has now burst and caused the global economic crisis. Singapore has its share of the pain.
There is no point in attracting business into Singapore, through lower taxes, if the outcome is to create false wealth and to leave a heavy burden on future generations.
Tan Kin Lian
Do not be fooled by this argument. Let us look at the facts.
The two sectors that created the most wealth and employment in Singapore were the banking and property sectors. These sectors generated huge profits and employed large numbers of people in marketing, sales and the back offices.
They created false wealth by generating a huge bubble in asset prices. Many people thought that they were wealthier when the bubble grew and the prices of their assets inflated. Unfortunately, high property price is really a burden that has to be paid over a lifetime and is a major contributor to the high cost of living in Singapore. The burden is higher for the future generations.
The bubble has now burst and caused the global economic crisis. Singapore has its share of the pain.
There is no point in attracting business into Singapore, through lower taxes, if the outcome is to create false wealth and to leave a heavy burden on future generations.
Tan Kin Lian
Free market (6) - Opportunity to work
With advances in science and technology, it is possible for the goods and services needed by all the people to be produced with less hours of work and higher productivity.
If the required quantum of work is shared fairly among all those who are willing to work, it will be possible for each person to work lesser hours that they do now.
In a competitive environment, some people will work longer hours to ensure that their jobs are secure. This will cause other people to be unemployed.
The business owners can pay lower wages when there there is a limited supply of work and an over-supply of workers looking for work. With lower wages, they can make a larger profit.
This is a short sighted approach. If people have lower wages or are unemployed, they will have less money to spend on other things. This will further reduce the demand and contract the economy.
A better system is to have the work fairly distributed among the available workers, so that everyone will be employed and can enjoy a fair wage. They will have money to consume other services, such as leisure and entertainment. This will create demand for the production of other goods and services.
A healthy economy depends on the ability of people to get employment at fair wages. It requires legislation on the maximum working hours (so that the work is fairly distributed among the workers) and a minimum wage, so that all workers will earn enough to meet the cost of living and be able to have additional money for savings or to be spent on leisure.
Tan Kin Lian
If the required quantum of work is shared fairly among all those who are willing to work, it will be possible for each person to work lesser hours that they do now.
In a competitive environment, some people will work longer hours to ensure that their jobs are secure. This will cause other people to be unemployed.
The business owners can pay lower wages when there there is a limited supply of work and an over-supply of workers looking for work. With lower wages, they can make a larger profit.
This is a short sighted approach. If people have lower wages or are unemployed, they will have less money to spend on other things. This will further reduce the demand and contract the economy.
A better system is to have the work fairly distributed among the available workers, so that everyone will be employed and can enjoy a fair wage. They will have money to consume other services, such as leisure and entertainment. This will create demand for the production of other goods and services.
A healthy economy depends on the ability of people to get employment at fair wages. It requires legislation on the maximum working hours (so that the work is fairly distributed among the workers) and a minimum wage, so that all workers will earn enough to meet the cost of living and be able to have additional money for savings or to be spent on leisure.
Tan Kin Lian
Saturday, September 26, 2009
Fair distribution of work
In most countries, there is legislation to ensure a fair distribution of work and rate of pay. The legislation can cover the following:
a) Number of hours worked in a week
b) Minimum wage
Take a country with a work week of (say) 40 hours and a real unemployment rate that is close to 10 percent. The official unemployment rate is usually lower, as many unemployed people are not captured in the statistics.
The unemployment rate can be reduced by legislating a work week of 36 hours. This will require employers to employ 10% more workers and give work opportunity to the unemployed workers.
To keep business cost at a competitive level, the wages of employed people working 36 hours a week should be 10% lower than before (when they work 40 hours a week).
It is difficult to cut the monthly salary of workers. But, if they are on an hourly rate, the adjustment is automatic. To create a flexible work environment, we need to change to hourly rate of pay.
Some employers will find it necessary to get their employees to work longer than the legislated work week. This can be allowed, but the employer should be required to pay a tax on the wages paid for the additional hours. This will give the incentive for the employer to employ other people, rather than ask the existing employees to work longer hours.
If the opportunity to work is fairly distributed to more people, we will have a better society. Most people can find work and get a wage that is sufficient to meet their cost of living. They will have more free time, due to the shorter work week. The free time can be converted into leisure activities and hobbies, and create opportunities for other supporting businesses to be developed. Some people can use their leisure time to do part time work and earn a supplementary income. This will create higher economic growth and a better quality of life.
Tan Kin Lian
a) Number of hours worked in a week
b) Minimum wage
Take a country with a work week of (say) 40 hours and a real unemployment rate that is close to 10 percent. The official unemployment rate is usually lower, as many unemployed people are not captured in the statistics.
The unemployment rate can be reduced by legislating a work week of 36 hours. This will require employers to employ 10% more workers and give work opportunity to the unemployed workers.
To keep business cost at a competitive level, the wages of employed people working 36 hours a week should be 10% lower than before (when they work 40 hours a week).
It is difficult to cut the monthly salary of workers. But, if they are on an hourly rate, the adjustment is automatic. To create a flexible work environment, we need to change to hourly rate of pay.
Some employers will find it necessary to get their employees to work longer than the legislated work week. This can be allowed, but the employer should be required to pay a tax on the wages paid for the additional hours. This will give the incentive for the employer to employ other people, rather than ask the existing employees to work longer hours.
If the opportunity to work is fairly distributed to more people, we will have a better society. Most people can find work and get a wage that is sufficient to meet their cost of living. They will have more free time, due to the shorter work week. The free time can be converted into leisure activities and hobbies, and create opportunities for other supporting businesses to be developed. Some people can use their leisure time to do part time work and earn a supplementary income. This will create higher economic growth and a better quality of life.
Tan Kin Lian
Rate of pay
We are used to thinking of monthly salary. This is a legacy of the old world, where most people expect to work full time (i.e. 8 hours a day) and for a lifetime career.
In today's environment, we should think about flexible work. It is more appropriate to think about an hourly rate. This allows people to work on certain days (and for varying hours in a day (according to their personal schedule). It is especially suitable for students or adults pursuing further study.
The place of work can also be made flexible. Many people now find it convenient to work from their home. The hourly rate of pay can be converted into a project for a fixed payment. The time taken to complete a project can be estimated, and the hourly rate of pay can be applied to get the project fee.
I am creating a new job portal, and have decided to use the hourly rate as the basis of searching for a job. I use a conversion rate of 160 for hourly rate to monthly salary. For example, an hourly rate of $10 is the same as a monthly salary of $1,600.
In today's environment, we should think about flexible work. It is more appropriate to think about an hourly rate. This allows people to work on certain days (and for varying hours in a day (according to their personal schedule). It is especially suitable for students or adults pursuing further study.
The place of work can also be made flexible. Many people now find it convenient to work from their home. The hourly rate of pay can be converted into a project for a fixed payment. The time taken to complete a project can be estimated, and the hourly rate of pay can be applied to get the project fee.
I am creating a new job portal, and have decided to use the hourly rate as the basis of searching for a job. I use a conversion rate of 160 for hourly rate to monthly salary. For example, an hourly rate of $10 is the same as a monthly salary of $1,600.
FISCA Assistance to consumers
If you need assistance from a FISCA volunteer on a financial product, you can register with www.fisca.sg. The scope of the assistance is set out in this document.
Free market (5) - Cooperation, not competition
We are used to a competitive environment. All suppliers compete hard against each other to get business and expand their market share. Sometimes, the competition is so intense that they try to put their competitors out of business.
It is possible to work in a cooperative environment. Each business serves different groups of customers. They may charge the same price for the service, or it may be differentiated to some extent. Some customers do not mind paying a higher price to get better service or to be served more quickly.
In a market place, there can be several stalls selling similar products. In many places, the stall holders cooperate with each other. If one stall is not able to provide the goods needed by a customer, they will get the goods from a nearby stall and sell it to the customer. Maybe, the two stalls will share the profit margin. This is cooperation.
If we extend the concept of cooperation to neighboring countries, we will get more goodwill and friendship between the people of the countries, as they will benefit together. If one country feels that another country is taking a larger share of the profit, there will be dislike and distrust.
Under a cooperative environment, all parties will survive and progress together. Any opportunity is shared fairly among all the parties. It creates goodwill and friendship. Even if some business fail, they will not blame it on their competitors but on their inability to attract the customers.
We need the educate people on the principles for a cooperative environment.
Tan Kin Lian
It is possible to work in a cooperative environment. Each business serves different groups of customers. They may charge the same price for the service, or it may be differentiated to some extent. Some customers do not mind paying a higher price to get better service or to be served more quickly.
In a market place, there can be several stalls selling similar products. In many places, the stall holders cooperate with each other. If one stall is not able to provide the goods needed by a customer, they will get the goods from a nearby stall and sell it to the customer. Maybe, the two stalls will share the profit margin. This is cooperation.
If we extend the concept of cooperation to neighboring countries, we will get more goodwill and friendship between the people of the countries, as they will benefit together. If one country feels that another country is taking a larger share of the profit, there will be dislike and distrust.
Under a cooperative environment, all parties will survive and progress together. Any opportunity is shared fairly among all the parties. It creates goodwill and friendship. Even if some business fail, they will not blame it on their competitors but on their inability to attract the customers.
We need the educate people on the principles for a cooperative environment.
Tan Kin Lian
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