Monday, February 01, 2010

Creating productive employment

Someone said that the selling of financial products, e.g. insurance, properties and investments, is necessary to create employment. Unfortunately, these activities are unproductive. They do not improve the outcome for the economy or lead to a better life for the people. They may create asset bubbles, which make some people rich. But, at a future date, the asset bubble will burst and many people will become poorer.

What are productive work? Here are my views:
- build houses for people to live in
- build roads and public transport
- more teachers to give proper education to the young
- more doctors, nurses and carers to take care of the sick and the weak
- more policeman to ensure security, law and order and reduce crime (including cheating)
- more people to work in restaurants and food courts
- more artists to provide leisure, culture, art, entertainment
- fewer bankers to manage the savings and investments for the economy
- farmers, fishermen, factory workers, retailers

We still need bankers, but we do not need an over-sized financial sector that is based on speculation and trading.

We also need to change the competitive system, and ensure that the available work is distributed more fairly. It is better to have more people working (for lesser hours), rather than fewer people working (for longer hours) while a high percentage is unemployed. We also need more people to have sufficient income, so that they can spend and create useful employment for others.

If people have more time and financial security, they are able to send their time on family, friend, art, culture and religion. They will then be willing to raise children for the future generation - a KPI that Singapore has fared poorly.

Tan Kin Lian


Anonymous said...

One big waster of productivity is this relentless focus in large companies on audit and controls, post Enron.

I work in a large company, where there are now about 50 people in the IT Dept. It used to be 25 people doing the same work.

But because of the requirement (mandated by Audit Committee) to have separation of duties, we now have 2 or 3 different persons doing the work when we used to need only 1 or 2. And that's before we factor in the new staff recruited to do ongoing checks on the IT Dept to ensure that control procedures are being followed, to ensure that when external auditors come, everything checks out fine. Furthermore, now that we control things so tigthly, users also become less productive, because they have to go through so much paperwork to ensure there is an audit trail.

Are all these productive work? Absolutely not. I think we have gone too far overboard in trying to make auditors happy. Some basic checks are necessary. But to mandate an organisational level KPI of "no adverse audit points by external auditors" creates a culture of kiasuism that I fear will ultimately kill off productive work.

Vincent Teo said...

We need more local football stars like Fandi Ahmad and Sundramoorthy to thrill football fans so that we can forget about the EPL and World Cup :p

Robert Tan said...

I think it is important that nobody in society gets left too far behind, that there should not be too large an income or wealth gap between the rich and the poor.

Only then can there be a better chance of continued peace and prosperity as a country continues to develop economically.

Besides, when pursuing economic growth, one should not forget other important aspects of life.

Anonymous said...

I bet the person who wrote

" One big waster of productivity is this relentless...." article is a person who is less than 30 year old.

Young people like to talk about efficiency and trading their health,family and friends for efficiency. Efficiency should be the by product of happy and contented workers.

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