Raising productivity is more important than ever in Singapore's maturing economy as it faces land and manpower limits, said Prime Minister Lee Hsien Loong on Monday.
In his May Day message, PM Lee said the government has been moderating the inflow of foreign workers. By having a tighter grip on foreign workers, wages will be pushed up in the short term. However, this may hold back many companies that are eager to expand but cannot find enough workers.
He warned that it is "dangerous to assume complacently that wages can continue to rise indefinitely, just by our squeezing on foreign workers."
"Higher wages push up business costs, affect our competitiveness, and may cause higher inflation," he said.
Instead, Singaporeans can raise their productivity to sustain better wages and higher real living standards said PM Lee.
"Raising our productivity will benefit workers, firms, and our economy as a whole. Workers can earn more in higher-quality jobs. Firms can prosper and
expand their businesses here," he said.
For that to happen, the tripartite partners -- Government, employers, workers -- must work together to support the transformation.
Every worker, he said, can take advantage of the Continuous Education and Training (CET) by the government. Companies should look beyond short-term profits to build successful businesses for the long-term, together with their employees and the broader community.
"Workers should also be encouraged to support sound national policies that benefit them in the long run, so that we can work together as a nation to serve
the best interests of Singaporeans," he said.
Unions must also work hard to organise workers and the growing number of Professionals, Managers, Executives and Technicians (PMETs) to help prepare for uncertain environment in the future. By raising productivity, he said, the Singapore economy can continue to thrive despite more intense global competition.
"Looking ahead, we must prepare for a more challenging economic environment. Globalisation has shortened economic cycles. Ups and downs happen much faster, and with less warning. Outlooks are less predictable. Every country is more exposed to global competition, and Singapore more than most," he said.