In a speech to the International Cooperative Alliance meeting in Singapore, minister Lim Boon Heng said that the share of value added earned by shareholders is higher than the share to the workers.
I think that he was probably referring to international figures, although I suspect that this remark applies to Singapore as well.
What does this mean?
1. Worker wages are depressed, due to global competion
2. Businesses are able to make excessive profit, in spite of global competition.
Where does the excessive profit come from? I suspect that they come from unethical practices, such as creating sub-prime products, structured financial products, excessive charges and questionable marketing practices.
What does this really mean?
Consumers are being exploited. Consumer protection has been weak in many countries. This is an area of attention for governments, regulators and consumer bodies.
The prevailing idea was that the free market can take care of these matters. This is a wrong notion. Businesses know how to make excessive profit at the expense of consumers, and get away with it.
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