Tuesday November 25, 2008

Singapore ministers, civil servants 2009 pay cut up to 19% on GDP decline, Singapore recession

This article belongs to the Singapore recession watch story arc.

channelnewsasia.com :

Ministers and top civil servants will get a pay cut of up to 19% in 2009. Top civil servants and ministers were supposed to get a pay rise in Jan 2009 but this has been deferred in view of the clouded economic outlook. The annual salary for top civil servants and ministers will fall next year to levels below April 2007, because close to 25% of their annual salary comprises variable payments linked to the GDP growth of Singapore and their salary will fall as long as the economy remains weak. In 2009, the Prime Minister and President will see their annual salaries cut by 19%, Ministers and Senior Permanent Secretaries by 18%, and Members of Parliament by 16%.

As for civil servants such as teachers and police officers, they are getting a total of two months' bonus payment for 2008, plus S$100 to S$300 paid in July. This comprises the 13th month payment or Annual Wage Supplement [AWS] and a one-month Annual Variable Component or AVC. The year-end AVC has been reduced to 0.5 month. Last year, the total bonus payment was three months plus S$220.

- In a price deflation scenario, prices of goods and services fall. But wages tend to fall faster than prices, being the exact opposite of the inflation scenario where prices rise faster than wages. In either case, workers are still screwed because they cannot keep up.

Chartered Semiconductor fired the first shot as it implemented a 5-10% pay cut, which was followed closely by a move by Temasek Holdings to cut the pay of its top executives by 25%. A manager in my office remarked that the Motorola factory in Singapore has been sold and the new owner told the workers that they could stay on and take a 25% salary cut, or they could leave. So, an average of say 10-20% seems to be the going rate nowadays as far as pay cuts go, depending on the position, industry, and particular company.

See also :

1. Singapore stagflation : May 2008 exports fell most in 17 months; inflation at 26-year highs
2. Singapore GDP shrinks 6.6% in Q2 2008 as stagflation continues
3. Singapore economy falling into technical recession as exports fall
4. Singapore economy in recession, GDP contracts 6.3% in Q3 2008, MAS ends currency gain policy
5. Singapore GDP contracted 6.8% annualized in Q3 2008, heads deeper into recession

(2008-11-25 18:15:46 SGT) [Biz] Permalink

Most popular blog postings on lowem.log :

1. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Honda Civic Hybrid preliminary specifications released
4. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004
5. How to insert currency exchange rates into Google Spreadsheets
6. Singapore : Nuclear power not ruled out
7. Live spot gold price quotes chart on COMEX
8. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option

Featured articles on lowem.log :

1. 2010 Honda Civic Hybrid preliminary specifications released
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
4. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
5. New efficient nanotech materials may boost enhanced geothermal power systems
6. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
7. Singapore property market recovery seen as private home sales surge 52% in Jul 2009
8. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004