INSIGHT

Misconception of salary

Author: Admin Publish Date: 02-09-2019
Updated On:  18-11-2019




THE ECONOMY DOES NOT PAY PEOPLE WHAT THEY DESERVE TO EARN.
1) Increased Productivity does not mean a higher salary
If you were to be paid what the market thinks you deserve then you would probably find your income levels dropping at an alarming rate. How can this be?
This is because the salary of workers in the developed world is protected from the pressures of the market. For example, whatever your job, there will be people in other countries who will do it for less money. You aren’t subjected to this competition because the government protects your job. The government use strict immigration controls to prevent people from poorer countries entering the workforce. Safe from these workers, your salary remains artificially high.
It is also not your skills or productivity that determine how much you earn, but purely the society you live in. If you happen to live in a prosperous, productive society, your salary will be pulled up by everyone else. Even if you happen to be the laziest, most unproductive worker, you will still earn more than a hard-working worker in a poor country.
For example, a bus driver working in Singapore earns a higher salary than a bus driver in Malaysia. I believe the road condition and traffic condition in Malaysia will require the Malaysia driver to be more vigilant and more skilful than his Singapore counterpart, but this is not reflected in their monthly salary.
2) Currency is a tool to increase the welfare of the general mass
 
The government has been deflating their currency to increase the competitiveness of the nation’s export. This may be good for the country’s GDP but its benefit is only retained by a small pool of people who own businesses, foreign assets or debt. In contrast, the majority of us have to face higher inflation due to higher prices of imported goods. 
SGD, which has been pretty strong over the past few years have attracted talents al around the world to work in Singapore. The starting salary for fresh graduates in Singapore is way higher than developed countries such as Japan and the United Kingdom. This act as a strong magnet to attract skilled and talented workers to work in Singapore. As a result, these pool of workers will create a prosperous and productive society, pulling up everyone salary. 
If a nation currency keeps falling, not only talented workforce shun from the country, even unskilled labour snub it too. Did you realize there are lesser Indonesian working in the construction industry and lesser Thai girl working in the entertainment industry compared to five years ago?

Get insights delivered to your inbox
Alternatively you could get updates delivered to your Whatsapp Here