Sharing what my civil servant friend shared with me about the Cost of Living issue Singaporeans face ...
Chowing down your food with friends—$3
plate of Hokkien mee, $4.50 plate of orh luak (oyster omelette), $8 plate of
BBQ chicken wings and $12 plate of BBQ stingray—at a hot and crowded hawker
centre, watching as super zhng-ed out luxury sports cars worth over $1 million whiz
past? Yes, it pisses me off too.
But refusing to buy $0.30 tissue from an
old aunty as you work your way through your food? Yep, I’m sure that pisses the
Aunty off as well, especially when she can’t afford your $27.50 meal.
Simply put, we can see an income gap in
Singapore everywhere we look. It is one of the highest amongst developed
countries. How high? There is a number called the Gini coefficient.
Essentially, the closer the number is to 1, the greater the income inequality.
Singapore’s was 0.464
in 2014. Compared to places like the USA’s 0.401 and UK’s
0.35, we aren’t doing so well.
How should Singapore overcome this income
gap? Solutions have been much debated abroad and locally.
Some say minimum
wage for those in lower-skilled jobs—like fast food chains—is the answer.
In fact, they think minimum wage would help
these employees better cope with the rising cost of living. But is this
really a viable solution? Other countries have tried, but their unemployment
rate is much higher than Singapore’s. In Europe, high minimum wages have been
accompanied by severe unemployment. Typically, those with the lowest skills are
most badly affected. This makes sense, if you think about it. Companies would
find it simpler to come up with automated ways of carrying out these jobs, so
they don’t have to pay minimum wage to hire workers.
And why would companies choose to do
business in Singapore, when there are many other neighbouring countries that do
not have minimum wage? I am no expert, but surely this solution could
negatively impact Singaporeans’ jobs.
Perhaps this is why the government has not
implemented minimum wage. Instead they supplement the wages of lower-income
Singaporeans. For example, Workfare has
become a longstanding feature of our system. For Singaporeans 35 and above, and
earning $1,900 or less, get up to $3,500 more a year in cash and CPF
contributions.
Even those near the middle are getting
help. More recently, the government has been co-funding 40% of wage increases for
Singaporeans earning $4,000 per month and below through the Wage
Credit Scheme.
What else can they do in the long-run? In a
2014 report, the Organisation for Economic Co-operation and Development (OECD)
lists a few other solutions,
one of them being to better match jobs with skills, and yet another to promote
equity in education. Singapore may already be heading down this path. Last
year, PM noted
that some of the ways to deal with the gap between rich and poor in Singapore was
to ensure that Singaporeans who chose a technical route could succeed too, and all
had access to housing, education and healthcare.
For example, SkillsFuture will give
polytechnic and ITE graduates good career progression and allow them to earn
more when they start in the workforce, by ensuring these students get a chance
at hands-on learning in the industry.
As for quality housing, education and
healthcare… well, the government provides housing grants (which go up to
$60,000) for those looking to buy HDB flats, helps lower-income families afford
kindergarten fees with KiFAS (lower-income families possibly pay as little as
$1 per month), and the new MediShield Life will provide universal insurance for
hospitalisation.
A lot of these schemes will benefit both the
Aunty selling tissue paper packets, and you having your hawker feast. So, while
we complain about the unfairness of it all, we should also admit this: income
inequality is real, but the government hasn’t been sitting on its white horses.
With some luck and hard work, we may be able to keep the gap from widening
beyond what’s healthy.
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