20160702 How wage shock therapy and competition have benefitted bus drivers

In 2012, Prof Lim Chong Yah called for a drastic hike in wages for low income workers because they had been “grossly underpaid” for years.

(Wages = monthly wages)
Prof Lim’s wage shock therapy (WST):
1 – Raise the wages of those earning less than $1500 by 50% over 3 years.
2 – Freeze the wages of those earning over $15000 simultaneously.

As usual, our for-profit PAP ministers were up in arms over government-linked businesses making less profits and freezing the wages of those they have parachuted into GLCs. For example, Minister Lim Swee Say had commented that such an approach would be “very risky”.

PM Lee went as far as claiming that Prof Lim’s suggestion of a belated wage increase would not work. Hmm.. sure or not?

Fast forward to 2016, basic monthly wages of PTO (SMRT and SBS Transit) bus drivers* have actually increased by 52% in 4 years! The breakdown is as follows:

In April 2012:
– SMRT bus drivers were getting $1200 and this will be increased to $1950 (SMRT said will pay at least on par with market) – 62% increase.
– SBS Transit bus drivers were paid $1375 and this was increased to $1950 in June 2016 – a 42% increase.

On average, there is a 52% increase in basic wages for bus drivers. Will Singapore go to the dogs just because low wage Singaporeans get what they truly deserve? If this move is very risky, why is Swee Say silent? Pai seh or what?

(Of course all this could just be another wayang and becomes self fulfilling should PAP introduce some legislations to hit the bottom line of new players. Hopefully it doesn’t.)

Chronology of basic pay increase of bus drivers:

April 2012 – SMRT and SBS Transit drivers paid $1200 and $1375 respectively.
May 2012 – SMRT “increased” basic pay by 35% to $1625 **
May 2012 – SBS Transit pay increased to $1600
Feb 2016 – Basic pay of SMRT $1625, SBS Transit $1775, Go Ahead and Tower Transit $1865.
15 Feb 2016 – Go-Ahead offers Singaporean bus drivers monthly salary of $1865
18 Feb 2016 – SMRT announced drivers would earn salaries “at least on par with the market”.
May 2016 – Tower Transit to pay junior bus captain $1930
1 June 2016 – SBS Transit raised starting salary from $1775 to $1950, an increase of $175 or 10%.
1 July 2016 – Go-Ahead to pay $1950 for all Singaporean and PR bus captains.

Competition is good for employees as without competition, wages mostly determined by GLCs, NTUC and government legislations.

PTO’s were telling a half truth when they claimed “China bus drivers hired as few Singaporeans keen on job”. Although driving a is tough job, they, with PAP support, had expected Singaporeans to accept self-dictated low wages. They then used this as a justification to hire thousands of foreigners. If Go-ahead and Tower Transit had not provided the competition, bus drivers would still have been squeezed by PTOs, ie PAP, with help from pseudo workers’ union NTUC.

A disproportionately high number of Singaporeans earning super low wages ultimately becomes a burden on society. In reality, there’s no such a thing as locals earning low wages in a high-cost country without attendant high social costs, as we have seen.

The almost-unnoticeable implementation of WST for bus drivers is a step in the right direction. Hopefully, this will soon be extended to all sectors with a disproportionately high concentration of Singaporeans who have been grossly underpaid for years.

* Renaming the job from ‘driver’ to ‘captain’ was a futile exercise as the issue had always been one of low pay. Will it make any difference to cleaners if they are called ‘cleaning executives’?
** SMRT treated the public to a wayang and arbitrarily changed bus drivers’ 5-day work week to six days.

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3 Responses to 20160702 How wage shock therapy and competition have benefitted bus drivers

  1. Xmen says:

    I’m pretty certain that the wage hikes have something to do with less liberal FT worker policy in last few years. Given low unemployment rate, they will have to compete for workers, even bus drivers, which drives up wages.

  2. confused says:

    Xmen, I agreed with you it’s about demand and supply.
    Due to the strike by a group of China Chinese drivers, the government may realise that they are not reliable and they began to think about singaporean who are more obedient, my guess?

    But to think of it, with the ever rising living costs driven up by the government, water (wages) has to find it’s higher level one day, somehow? No? Brexit results should be a clear mirror that the government should look at?

  3. Xmen says:

    @confused, yes – Singaporeans are subservient. Mainland Chinese will fight back if they are mistreated.

    PAPexit will never happen although HKexit is a real possibility if people are allowed to vote lol.

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