Straits Times did not publish this letter.
22 December 2008
There are discussions about the best way for companies to cope with decreased demand in a recession. The following options were considered:
> retrench foreign workers
> retrench local workers
> reduce pay across the board, to avoid retrenchments
I prefer the method used by the Governor of California State. He asked the state employees to take 2 days of no-pay leave, to reduce the state budget deficit.
Here is my reason. If there is reduced demand, there is reduced work. The company can ask all employees to take a few days of no-pay leave to reduce the wage cost and avoid retrenchment. In return, the employees extra days of leave (in proportion to the reduction in wages). They can spend the time with their family and friends or attend classes to upgrade their knowledge and skills.
To cope with the reduced wages, the employees can draw down on past savings or cut down on the discretionary expenses. For employee with fixed commitments that cannot be reduced, I suggest that they be provided with a low-interest rate loan for the reduction in their wages. This loan can be provided by the employer or the state at an interest rate of 2.5% p.a. (same as CPF interest rate).
I hope that this suggestion can be considered.
Tan Kin Lian
- ► 2018 (165)
- ► 2017 (1258)
- ► 2016 (828)
- ► 2015 (691)
- ► 2014 (144)
- ► 2013 (501)
- ► 2012 (1269)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1654)
12/21 - 12/28
- Speaker's Corner, 27 Dec 2008 - Speech
- Survey - based on 25 responses
- Seminar for Minibond Investors
- Thought for the day - the world is a dangerous pla...
- The fallen giants of finance
- Attention: Pinnacle Note Investors
- Meeting at Speaker's Corner, Sat 27 Dec, 5 pm
- Survey - Do we need a new property portal
- Details of 150 CDOs still not available after 3 mo...
- Hong Kong Arbitration Body Mediates First Lehman-L...
- Avoid retrenchment
- Be careful about free service for a trial period
- Online Citizen blog
- SMS booking of taxis
- Strong interest in the Property Indicators (AMP, A...
- Why MAS should handle complaints
- Quote - President Elect Obama
- Survey - choosing a place to live, closeness to fa...
- Survey - complaint to FIDREC
- Survey - Complaint to Financial Institution
- 70% willing to join FISCA
- Thought for the Day - Democracy
- FISCA - the steps ahead
- Join FISCA for $36
- Simulation Game - trading of stocks, etc
- Customer feedback on plan V
- FISCA - the proposed approach
- FISCA Survey Results (2)
- Barclay CEO apologies
- The Disadvantages of an Elite Education
- Survey: DBS Schroder LiveSure 2025 fund
- Survey: Vista Plan from Zurich
- An adviser's view about the V plan
- Unilateral changes to DBS Schroder LiveSure 2025 f...
- Madoff Clients - New York Times
- FISCA Survey Results (1)
- ▼ 12/21 - 12/28 (37)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)