The falling labor income share of the industry sector is observed rather evidently
in Indonesia and Singapore. Singapore experienced the most rapid decline in the
labor income share, from 32.7% in the early 1990s to 22.9% in the early 2000s
(Figure 14.8). In Indonesia, labor income accounted for 33.1% of total industrial
value added during the early 2000s, but the share plunged to 28.8% in the
mid-2000s. The labor income share in Malaysia was relatively stable at approximately
27% during the 1990s. In Southeast Asia, the falling labor income share
can be explained by the fact that themanufacturing sectors, particularly electronics
and automobiles, are capital- and technology-intensive; and increasing demand for
capital relative to labor led to less labor employment and, consequently, a decline
in the labor income share.