Thursday, March 16, 2017

Why higher wages will not lead to higher prices over the long term

Many people think that if wages are increased or a minimum wage is introduced, the cost of living will rise.

This could be the immediate impact, but it will be short term. Over the long term, the cost of living will not change much. Instead, the higer cost of labor will be compensted by a lower cost of rental. The shares of the total price earned by labor, rental and profit will be adjusted, but the final price should remain almost the same.

I based my argment on logic and also on observation.

If lower wages will lead to lower cost of living, why is our cost of living so high? We do not have a minimum wage and some of the jobs pay so low that the worker cannot survive on the wages and have to do two or three jobs, or several members of the family have to work.

If wages are low, why is our cost of living so high - indeed, it is the highest in the world!

Our low wages are overwhemed by the high cost of rental, the high management salaries and the high profit margin. The prices of goods and services do not come down. Instead a larger share of the total prices paid by the buyers goes to the other components.

My logic tells me that if wages go up, then the shares earned by the other component will come down. 

Why is this simple logic not entering into the economic management of the country? The reason is that the people in power have a vested interest in pressing down wages. It allows them to enjoy higher management salaries (e.g. our government ministers earn the highest salaries in the world) and they also enjoy high rentals as property owners and high profits as shareholders. 

This means that the rich gets richer, right? Have you not heard this before?

Monday, March 13, 2017

Wisdom of the Crowd - 13 march 2017

1. Here are the active issues that you can vote on:

You can view the results when the number of votes reach 50.
Give you vote to arrive at this goal.

2. Here are the issues that have closed recently.

You can view the results at

Login with the Facebook or Google logo and view the results.

Sunday, March 12, 2017

TKL speech at Hong Lim Park - Increase in water price

Here is the video of my speech at Hong Lim park in protest against the increase in water price. With thanks to "Singapore Voices".

What does the crowd think?

The results for two important issues are now available for viewing:

1. Who do you like to see as the next prime minister of Singapore.
2. Do you expect the economy to do well in the future?

Find out what the crowd thinks.
Login here to view the results and vote on the other issues.

End of life living

Each person will come to this crossroads one day. We will have to see our parents leave this world. It will be our turn one day.

How can we deal with this stage of our life? Dr. Tommy Wong wrote this book based on his personal experience dealing with the departure of people who are close to him.

Wisdom on how to live life

Dr. Tommy Wong, professor turned international author, has written five books on "Wisdom on How to Live Life".
These books are written in a conversational style, which makes them easy to read and understand. The topics covered by the conversations are relevant to daily living in a place such as Singapore.
In his books, Dr. Wong brings out the important message of paying attention to the spiritual aspect of living, rather than just focusing on the materialistic aspect. This change in focus can be comforting to those who are experiencing stress in their daily life.
This series of books (hard copy) is selling at $90-. Dr. Wong has now made the PDF version available for sale at only $22-.

My view on the water price increase

Mr Tan

What are your views pertaining to the following questions related to the increase in the price of water.

1. We need transparency as to what lead to the increase.

2. Recently received bill from SP Group instead of SP services. My feeling is maybe they set up a SP GROUP just like MOH Holdings, and this increased staff costs etc need to pay the BOARD of DIRECTORS in SP GROUP etc

3. What is your personal view on what our G should do instead of increasing 30% as this will have 'chain' effect to food etc.

Thank you Mr Tan

1. i agree. We need to know what is the cost of water and how it has increased in recent years. Was it due to new sources of water, i.e. Newater and desalination?

2. I do not know if this contributes to the increase.

3. If we really need to increase the price of water (and I don't know if this is really necessary), we should follow Hong Kong to allow each household to have a certain amount of water each month free of charge, or at a subsidised rate.

Vote on the increase in price of water

I have added 3 issues on the increase in the price of water by 30%. You can cast your votes on this issue. We can pass a message to the government on whether the citizens support or oppose it.

Revamped website gets good response

There are many votes cast on the 5 issues in the Wisdom website. Those who cast their votes will be invited to view the results when the issues were closed after 7 days.

The results should be quite interesting. The issues include the next prime minister for Singapore, the prospects for the economy, the countries most important to Singapore, the top economy in the world and National Service.

Cast your vote now at

Hong Lim Park - protest against increase in water price

I was the last speaker and the "last minute speaker" at the Hong Lim Park protest against the 30% increase in water price. I will post the video of my speech when it is ready.

My key points were:
1. What is the cost of water? The minister's said that it cannot be disclosed due to "commercial sensitivity". That is a bad reason. The lack of transparency could lead to corruption, bad decisions and wasteful spending.
2. It was dishonest for a minister to say that the water price has not increased during the past 17 years. There was an increase in the water conservancy tax, which led to an increase in the price of water.
3. The impending increase in water price has already resulted in increases in price of food. This will lead to a spiral in the cost of living.
4. A minister has said that citizens should be aware that water is an essential resource and should be priced correctly. Can the minister also consider that the increase in water price is affecting the low income people badly. We should follow Hong Kong in allowing a certain amount of water free each month for every household.

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