Can Singapore's Labour Productivity Improve Much Further?
CAN SINGAPORE’S LABOR PRODUCTIVITY IMPROVE MUCH FURTHER? Not a day passes without an exhortation from our government to increase productivity (especially labour productivity). So how is labour productivity usually measured? It is: Total Output /Total Man Hours Worked. Total Output of a country is its Gross Domestic Product (GDP), which is the Value Add of the economy without double counting outputs which are also inputs to another activity. The charts below show statistics on average daily wage cost (US$) and Labour Productivity in Manufacturing (US$) of ASEAN countries plus China Chart 1 shows two types of column bars representing average daily wage cost and labour productivity both measured in US$. *Numbers taken from McKinsey Global Institute. This chart roughly shows that Wage Cost and Productivity have a very strong correlation. That is, higher productivity goes with higher wages and vice versa, though we are not saying whether it is the tail that wags the dog or dog t...