Discover and read the best of Twitter Threads about #workersparty
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At the commencement of this session of Parliament, Prime Minister Lee expressed his hope that, with a more sizable Opposition, there would be more sophisticated policy debate, with alternatives instead of just objections being offered. (1/n) 
My #workersparty colleagues and I took that charge seriously. So when the GST hike was proposed, we took pen to paper, and worked out a range of revenue options that we felt could stave off the need to raise GST. (2/n)
By our estimates, the hole that GST would fill is around $3.6 billion. So we went ahead and worked out four different ways—we call these levers—that we could pull in more revenue, each built around a different theme. (3/n)
Every year, I teach a course in international economics. In the first lecture of the course, I teach what is known as the Ricardian model: named after the 18th century economist, David Ricardo. (1/n)
The key insight then—as it is today—is that free trade between two countries allows each one to specialize according to what they can do relatively well. This is known as comparative advantage. (2/n)
In doing so, these economies can enjoy levels of consumption greater than if they chose instead to go it alone, and attempt to produce everything at home. This elegant, compelling argument underlies why economists generally favor free trade. (3/n)
The term “debate” often evokes images of raucous speeches and lively verbal jousting. Alas, parliamentary debates (in this country at least) are often heavily structured, guarded affairs. (1/n)
For instance, to make a point, one has to be recognized by the Speaker. This preserves order and decorum, but it comes at the cost of stifling dynamic riposte, especially for a heated topic. (2/n)
Time constraints exacerbate the problem (Parliament has more issues to discuss than time allows). This was the case yesterday, when a few #workersparty MPs (myself included) were unable to raise supplementary questions before the end of question time. (3/n)
The government recently announced plans to form a nonprofit entity to take over the media businesses of Singapore Press Holdings. Many observers have offered their thoughts on the merits of this arrangement (including my #workersparty colleagues). (1/n)
I thought it would be interesting to examine the economics of the local media industry in a little more detail. While it’s not possible to cover all relevant aspects, a few issues did jump out at me. (2/n)
The Straits Times and its associated vernacular sister publications (Lianhe Zaobao, Berita Harían, etc) currently operate under the auspices of an effective monopoly conferred by the state; at the moment, only SPH has been permitted to operate as a newspaper company. (3/n)
This pandemic recession has been brutal for many Singaporeans, especially those that have been displaced from long-held jobs. But such displacements predated #COVID-19; technological advances and trade globalization mean this trend is set to continue. (1/n)
This means that what is needed is an end-to-end jobs safety net. At the back end, the Professional Conversion Program and SkillsFuture help workers reskill, while cofinancing via the Jobs Growth Incentive makes it more palatable for employers to take on retrained rookies. (2/n)
But there is more limited support at the front end. Immediately after losing their jobs, there usually isn’t any immediate relief for retrenched workers. While such insurance payouts aren’t huge, they are often very welcome help at a difficult time. (3/n)
Working in a research-focused
institution, one becomes keenly aware of the importance of innovation as a driver of technology and productivity, which in turn is a source of growth and development. (1/n)
institution, one becomes keenly aware of the importance of innovation as a driver of technology and productivity, which in turn is a source of growth and development. (1/n)
Indeed, economists widely acknowledge that sustained, long-run growth is only possible with technological improvements. This is the case with old-school (Solow-style) growth models, as well as newer (Romer-type) “endogenous” growth models. (2/n)
But by the same token, economists know remarkably little about what gives rise to innovation. Ideas, of course, but the field is largely silent about the generation of new ideas (other than assuming that they may arrive via some random process). (3/n)
A free rider, as defined in economics, is an individual (or group) that reaps the benefits of the actions of others, without paying the cost (or underpaying for it). It is a form of market failure, and characterizes nonexcludable goods (those whose use cannot be restricted).
In his opening address to the 14th Parliament, PM Lee spoke of a number of issues. Many points he made were thoughtful, and drew on his deep experience in government, and as Prime Minister. I appreciated his insight and candor.
PM Lee also suggested (and I paraphrase) that the argument that voting for the opposition because others will still return the PAP to power is what the economist will associate with being a free rider.
There has been some pushback against the claim, from our #workersparty manifesto, that min wages is sound policy. Let me begin by emphasizing a position I've held from the start: min wages is not unabashedly good policy. But it is a good start that is also evidence-based.
In social sciences, there is seldom unambiguous evidence. Studies can yield different results, which is why continued research is important & policies should be based on the overall literature. That's why I mentioned that many papers since Card-Krueger corroborate its findings.
The best way to aggregate and evalute the totality of results is to rely on meta-analyses, which are studies of studies. Meta-analyses take the existing results out there, and ask if there are systematic conclusions we can draw from the literature. So let's look at these.
One of the issues I have repeatedly raised in my campaign speeches this #GE2020SG has been the problem of stagnant productivity. I see poor productivity growth as the most critical economic challenge that the country will confront in the decades ahead. Why is this so important?
Because in the long run, the only way to ensure sustainable growth in our output and incomes per capita is through improvements in productivity. But because it is a technical subject, people tend to shy away from discussions about the matter. I think that this is a mistake.
It's useful to start with some definitions. The simplest definition of productivity is output per worker. So if I can make two hammers in an hour, and my colleague only makes one, I am twice as productive my coworker. All else equal, I should be paid twice as much in wages.
Economists define 3 main forms of unemployment: frictional (what happens when you move btw jobs); structural (when you lose your job because your industry is now defunct); and cyclical (when you’re fired because of a recession). In Singapore, the latter two are more relevant.
The latter 2 are the forms that are targeted by a redundancy insurance (RI) scheme, which seeks to cushion the effects of involuntary job loss. RI works via risk pooling: with job displacements (and RI payouts) occurring at different times, the common cash pool remains liquid.
In addition to income replacement (which is often partial, to retain the incentive for job seeking, and also for financial sustainability), RI can reduce the psychic sense of insecurity that results from losing one’s job (which can also promote entrepreneurial risk taking).
One of the main policy positions the #workersparty is advancing this #ge2020sg is an objection to a GST hike, of 7 to 9 percent. It’s worth understanding why such a move would be an error, both in the shorter and longer run.
In the near term, a GST increase amounts to contractionary fiscal policy. If we believe that this could be a prolonged recession, a premature tightening of macro policy would short-circuit a nascent rebound, and the shock may even send the economy back into recession.
This largely describes the case of Japan, which has remained in a low-growth regime, and often fell into recession each time it either attempted to (or actually did) increase its consumption tax, ever since 1997. Consumption tax hikes may have well prolonged its lost decade(s).
One of the policies that the #workersparty is advancing this #ge2020sg is the policy of a minimum wage. Many who are unfamiliar with this concept—or who only encounter this idea in intro econ texts—tend to reject it as an unnecessary gov intervention that would raise unemployment
I used to think that way. But since the work of Card-Krueger in the 1990s, economists’ understanding of the effects have evolved. Using modern econometrics, paper after paper has shown little to no employment losses from the intro of min wages & improvements in worker welfare
Of course, it would be absurd to argue that capacity to raise wages above prevailing levels is boundless. But real wage growth in Singapore over the past decade (1.9%) was outrun by real GDP growth over the same period (4.5%), meaning that there is slack for greater labor share
