Tipping Singapore into a recession to ease labour market tightness would be a very bad idea
Add BT as a preferred source
SINGAPORE’S labour market tightness – and accompanying wage pressures – has been so persistent that some wonder if it can only be cured by the economy entering a recession.
But wishing for a recession is too drastic a response – it is, after all, possible to ease labour demand without going to that extreme.
In a tight labour market, employers typically offer higher wages to attract or retain workers. They may then pass these higher labour costs along to consumers by raising prices. This is known as wage push inflation. Higher wages might then be needed to compensate for the hike in the prices of goods, running the risk of a so-called wage-price spiral.
TRENDING NOW
When every phone becomes a satellite phone, what happens to Asia’s telcos?
Koh Brothers Eco Engineering faces up to S$57.6 million in potential liabilities from legal disputes
Too little, too late? Manila’s billion-dollar bid to ignite its sputtering EV industry
DayOne secures S$530 million green loan from DBS, OCBC and UOB for Singapore data centre
