PM's May Day Message
PRIME Minister Lee Hsien Loong on Monday warned of the potential consequences of raising wages through squeezing the supply of foreign workers.
Mr Lee said in his May Day Message that it was "dangerous" to assume that tightening the supply of foreign workers alone can push wages up.
Business costs will go up, affecting Singapore's competitiveness, and could also cause inflation, he added.
The move to cut back on foreign labour may cause some companies to hold back expansion plans and some may re-locate their operations out of Singapore.
While the labour market remains tight, that is, Singaporeans can easily find jobs at all levels, Mr Lee said this will only push wages up in the short term.
Instead, Mr Lee urged workers and employers to work together to raise productivity, noting that this was a more sustainable way to raise wages as well as real living standards.
"It is the only way to upgrade ourselves and our lives," he said.
Mr Lee said that raising productivity was more important than ever in a maturing economy with limited land and manpower.
He said: "This calls for every worker to make the effort, whether the rank-and-file or professionals, managers, executives and technicians. We must all continue to upgrade ourselves and master new skills."
Besides an uncertain external economic environment, Singapore is also facing domestic pressures that will slow the country's growth to between 1 and 3 per cent this year.
This article was first published in The New Paper.