Mish congratulates Singapore for being the first nation to do something in this economic crisis that actually makes some sense, and that is cutting government salaries.
Singapore’s government said it will cut the salaries of its top public workers and ministers as a “sharp” recession threatens to increase job losses and hurt lending this year.
The top government salaries will fall 12 percent to 20 percent in 2009 and “may be subject to further adjustments given the volatility of the economy,” Teo Chee Hean, the defense minister who’s also in charge of the civil service, said in parliament today. The reductions are deeper than the pay cuts the government said it was planning in November.
Singapore is scheduled to unveil more measures this week to help companies cope with the deepening global slump, which caused exports to contract in 2008 by the most in seven years. The National Wages Council last week advised employers to freeze or cut pay rather than fire workers.
Little can be done to mitigate the current slowdown, which has spread to all parts of the economy, Trade Minister Lim Hng Kiang said in parliament today. The nation is facing unprecedented conditions in this “sharp” recession, he said.
I agree with Mish. Though a pay cut for top staff is largely symbolic, I think this type of symbolism is the right way to go. Private and public companies in the U.S. have are cutting the salaries of its top staff, so why not the government?
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