Increased in Wheat Prices and Maid’s Pay (a Micro-Economics Perspective Report)

2038 Words Feb 20th, 2012 9 Pages

1. Micro-economics is the study of the choices that individuals and businesses make, the way these choices interact in market, and the influence of governments.1 This report analyses the micro-economics of 2 newspaper articles - “Bakeries Raise Prices As Cost Of Wheat Soars” and “Pay Hike As Supply Of Maids Dries Up”, based on perspectives of micro-economics theories, principles and concepts.


2. Summary of Article. This article highlighted the issue of bad weather (“Land” – a Factor of Production) and how it affected the basic commodities needs of the people (consumers). Bakeries raise prices due to the increase in cost of wheat and
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The sources of Indonesian maids are “drying up” given that these maids have other choices of employments with higher pay such as Hong Kong and Taiwan. This market force compelled local agencies to plan for increase in salaries for the Indonesian maids to stay competitive. 17 maid agencies are raising the maid’s salaries from S$380 to S$450. However, not all agencies are keen on this pay hike as they doubted the effectiveness in resolving long term problem. The effect of Government’s intervention (as a result of imposing stringent employment requirements and new Employment Agencies Act) may also be the causal factors for the pay hikes. The Association of Employment Agencies have suggested the need to explore non-traditional countries for maids to meet the increasing demands.

6. Factors of Production. The Factors of Production on “Labour” is illustrated as follows:

a. Labour. “Labours” are put in by maids to provide domestic services to families in Singapore and other countries. These maids traditionally come from under-developed or developing countries and typically with lower education. Stringent requirements from Singapore have not gone well with maids from Indonesia. As a result, many have turned to Taiwan and Hong Kong where the rules are less stringent and yet offer higher salaries than Singapore. Since “labour earns wages”, maids have the choice and prefer employers

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