How Much Should The Minimum Wage In Singapore Be?

The issue of minimum wage has been thrown up for discussion quite frequently in Singapore over these past few years. Should there be minimum wage in Singapore? If so, how much should the minimum wage be?

For this article, I will use a new format to write this article. Along the way, I will make this article more interactive and ask some questions. Hopefully, you will find this more interesting.

Let’s go! There are just a number of questions at the start. Try them, so that when you get to the actual statistics, the realisation might be more interesting.

So, first question:

Poll 1

And if you do think there should be minimum wage,

Poll 2

Before we discuss further on the minimum wage, perhaps let us think about the following:

Poll 3

*including for food, transport, healthcare, education, insurance etc

Let’s have a guess at what the proportion of Singaporeans who earn less than $1,000, $1,500 or $2,000 is.

Poll 4

Poll 5

Poll 6

Now, let me show you the actual numbers:

According to the CPF Board’s annual report in 2011, there were 17% of Singaporeans earning less than $1,000 (Chart 1).

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Chart 1

There were 26% of Singaporeans earning less than $1,500 (Chart 2).

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Chart 2

There were 37% of Singaporeans earning less than $2,000 (Chart 3).

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Chart 3

Note that I am not able to find the statistics for 2012, because in the CPF’s Board’s annual report in 2012, they have mysteriously decided to remove this information on the wage distribution from their report. Why this was done is anyone’s guess.

So, now that you know these statistics, for the estimate that you had made just now,

Poll 7

Did you think there were fewer or more poorer Singaporeans in Singapore? Were you surprised by the number?

Let’s look at the other aspects of how wage can be calculated. I hope you are finding this exercise useful so far!

Next question:

Poll 8

**You can get this by multiplying the number of hours you think a person should work everyday with the number of days you think he/she should work every week.

Now, let’s look at how many hours Singaporeans are really working every week:

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Chart 4: Ministry of Manpower

Let’s compare this to the number of hours people in other countries with the same level of national wealth work every week:

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Chart 5: OECD StatExtracts, Ministry of Manpower

You can see that Singaporeans work the longest hours among the high-income countries.

Let’s compare the number of hours worked with some other variables.

Do you also know that the countries which work shorter hours have higher productivity (Chart 6)? (Note that not all the countries are included for comparison because of a lack of available data.)

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Chart 6: Bureau of Labor Statistics (BLS)

And countries which work shorter hours have higher innovation skills as well (Chart 7).

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Chart 7: Global Innovation Index 2013

Finally, you can also see that the countries with shorter working hours also have higher fertility rates, with the exception of France and Iceland (Chart 8).

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Chart 8: The World Bank

So, from this, you can see that you don’t need to work long hours to more productivity. In fact, it seems like the evidence points the other way. The countries which work the shortest hours are also the most productive and innovative.

On top of that, because they have better work-life balance, these countries are also more likely to have more time to take care of the next generation, which also explains the higher fertility rate.

So, now that you know this,

Poll 9

If so, having looked at how many hours other countries are working and are still able to be productive and innovative,

Poll 10

So, the Singapore government has said many times that they will only increase wages if productivity increases. So, they refuse to increase wages and keep waiting.

But according to Seet Min Kok from the SIM Global Education, he had said that for productivity to be increased, workers should first be paid higher wages. He explained this with the following:

  • Workers paid higher wages incur higher costs of losing their jobs hence inducing them to work harder, that is, they are more productive so as to keep their jobs;
  • Higher wages can encourage more workers to queue up more eagerly for the higher-paying jobs thereby enabling the firm to select better, more productive workers from a larger pool; and
  • Workers who are paid higher wages are less likely to quit, thus reducing the firm’s turnover and cutting down the costs of hiring and training new workers.

Also, do you know that Singapore’s productivity has dropped over the past few decades (Chart 9)?

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Chart 9: The Heart Truths

Which means that it is quite unlikely that productivity will increase under the current model of working. Which also means that our wages will continue to remain stagnant, under the PAP government’s proposal. Why then did the PAP decide to tell us that they will increase wages when we increase productivity, knowing that this wouldn’t work? Clearly, for productivity to be increased, wages would need to be increased. Also, for wages to be increased, there needs to be firm political will to do so, which is severely lacking within the PAP.

Not only that, it is also clear that with shorter working hours, the fertility rate in Singapore can dramatically go up. So, why doesn’t the government want to do this?

Finally, let’s take a look at the minimum wages of some countries (Chart 10 and 11).

Minimum Wage in Selected Countries

Chart 10

Chart 11 Minimum Wages Around the World 2012

Chart 11

And as I had shown in a previous article, the countries with higher wages are also the ones with higher GDP per capita (Chart 12).

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Chart 12

They are also the ones with higher productivity (Chart 13).

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Chart 13

In sum, where countries pay their people higher wages, you can see that their productivity is higher and their national income is higher as well. Also, where people work shorter hours, their productivity is higher, they are also innovative, and because there’s better work-life balance, they also have higher fertility rates.

To put the nail in the coffin, do you also know that Singapore has the lowest wages among the high-income countries (Chart 14)?

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Chart 14

Now that you have all the facts and information presented above, what do you think about the fact that Singapore has no minimum wage?

It is clear that minimum wage in Singapore is long overdue.

Working backwards, what do you think Singaporeans should minimally earn every hour in order to have a basic standard of living in Singapore? Take a look at your answer in Poll 3 and Poll 10 again.

Based on how much you think Singaporeans should minimally earn every month and how many hours we should be working,

Poll 11

By now, the minimum wage that you think Singaporeans should be paid every hour should be higher than what you had initially thought of at the start of this article.

Comparing with Poll 2,

Poll 12

You can see that clearly, there is a need for a minimum wage, right? Or rather, Singaporeans should be paid higher wages in order to have even a basic standard of living in Singapore.

Already, you can see that 17% of Singaporeans earn less than $1,000 every month, a quarter earn less than $1,500 and nearly 40% of Singaporeans earn less than $2,000. Many Singaporeans are earning just enough to get by, and this is not including having children yet! Do you think what we are earning is enough?

In fact, Acting Manpower Minister Tan Chuan-Jin had also said that “entry-level salaries … have been stagnant over the past 5 years“.

In his article last week, Leong Sze Hian had also shown that real wages for the lower-income earners had dropped again last year.

Not only that, since 2000, the richest 10% in Singapore has seen their wages shot up the most dramatically, whereas for the poorest 10% in Singapore, they have seen their real wages actually drop (Chart 15)!

Uneven Real Income Growth

Chart 15: The Straits Times

Which thus means that the highest-income earners and executives in Singapore earn the one of the highest wages in the world (Chart 16).

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Chart 16: ECA Global Perspectives National Salary Comparison 2012

Whereas the junior managers earn one of the lowest wages among the high-income countries (Chart 17).

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Chart 17: ECA Global Perspectives National Salary Comparison 2012

Now, remember – the wages of the PAP ministers are pegged to the rich, which means that the ministers are also one of the highest income earners in Singapore. In fact, you can see that the ministers earn approximately 108.3 times more than the lowest-income earners in Singapore (Chart 18)!

photo 2

Chart 18: Singapore News Alternative, from Yahoo! News Singapore

Do you think that this is acceptable when there are nearly 40% of Singaporeans earning less than $2,000 in Singapore?

As a taxpayer, where the money you pay goes towards paying the wages of these ministers, do you think you want your money to be used like this? Do you want them to pay them lower wages, because what goes to them actually comes from your own pocket?

Not only that, do you know that the rich pay one of the lowest taxes in the world (Chart 19)? Singapore’s tax structure is one of the least progressive among the developed countries.

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Chart 19: KPMG’s Individual Income Tax and Social Security Rate Survey 2012

And, if you are the richest richest in Singapore, you pay even lower taxes, than the rich (Chart 20).

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Chart 20: KPMG’s Individual Income Tax and Social Security Rate Survey 2012

What this means is that the income inequality in Singapore has kept growing and growing over the past decade (Chart 21).

photo 2 (21)

Chart 21: Department of Statistics Singapore Key Household Income Trends, 2012

And Singapore is now the most unequal country among all the high-income countries (Chart 23).

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Chart 23: An Overview of Growing Income Inequalities in OECD Countries: Main Findings, Department of Statistics Singapore Key Household Income Trends, 2012

Looking at all these, do you think there should be minimum wage in Singapore? It’s not that Singapore doesn’t have enough money, you know. And it’s not that we cannot increase wages because it will be detrimental to the economy. It’s not, because look at the richest – they can afford to pay themselves the highest wages, which means there’s a lot of money to go around in Singapore. But why are the poor so lowly paid? And why is there no minimum wage? Why is it that the ministers, whose wages are pegged to the rich, have decided to pay themselves such high wages, without seemingly any cap, but which has refused to share the wealth with the poor, to ensure that the lower-income earners in Singapore also see their lot increase?

Perhaps you might think that this might be a temporary issue. Maybe the government will turn it around. Let’s take a look at the example of America. Since 1970, as wage growth stopped following productivity growth, the rich started earning increasingly more and more over the poor, such that the income gap has widened and has never been closed (Chart 22).

US Productivity vs Wage Growth

Chart 22: Economic Policy Institute

This means that for more than 40 years now, the income inequality has kept growing in America and is seeing no signs of closing. This is the exact same thing that is happening in Singapore since 2000.

In Singapore, this turn where the rich-poor gap started growing began in 2000.

Since 2000, the gap between the rich and the poor has widened (Chart 23).

GAP BETWEEN TOP AND BOTTOM EARNERS GREW FROM 2000-page-001

Chart 23: The Straits Times

The “skilled” workers started earning more and more, over the “unskilled” workers (Chart 24).

WAGE GAP U-TURNED IN 2000-page-001

Chart 24: The Straits Times

All in, you can see that things have become very unequal in Singapore, and it is quite arguably the case that the PAP has its hand in this. So, the PAP might pay lip service as to how they believe Singapore should be more equal but you can see from the statistics, that clearly, they are not interested in seeing equality happen in Singapore.

The Singapore society is now being segmented to a group of very high-income Singaporeans and the rest of Singaporeans, who are made to earn stagnant wages, which are not catching up with increasing prices.

Progressive Wage Model vs Minimum Wage Law

Finally, the government had introduced a “Progressive Wage Model”. According to Minister without portfolio Lim Swee Say, he had said that the progressive wage model is better than minimum wage.

But do you know that the Progressive Wage Model is just a beautiful name for a promotion pay scale? Which means that this “model” already exists in every company in the world – when you get promoted, you get a pay rise. This is just it.

How is the “Progressive Wage Model” going to allow workers to earn higher wages? You need to be promoted to earn higher wages. If you don’t get promoted, you don’t earn higher wages. How many people actually get to be promoted?

To put it clearly for you, look at the Progressive Wage Model that the NTUC had shared (Chart 25).

Progressive Wage Structure

Chart 25: NTUC

Now, I compared the wages outlined in the “Progressive Wage Model” with the recommended salaries of workers in 2012 by Adecco and the actual salaries earned by workers in 2012 (Chart 26).

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Chart 26: 2012 Adecco Salary Guide Singapore, Ministry of Manpower, Report on Wages in Singapore 2011

Do you see that workers in these industries are already earning not only the wages as propounded by the “Progressive Wage Model”, they are already earning even higher wages!

What progressive wages is the PAP talking about? The workers are already earning more than what is set out in the Progressive Wage Model. In fact, the model is not “progressive”. It is regressive.

What is needed is not some fancy model that the government had created which is simply a promotion pay scale, where if you don’t get promoted, and most people won’t, you won’t get an increment.

It is conniving of the government to claim that by using a “Progressive Wage Model” or by increasing productivity to increase wages, that the wages of Singaporeans will be uplifted, when this will never happen under their proposals, and in all likelihood, they are not interested in increasing the wages of Singaporeans anyway.

Then, in the first place, why are you increasing prices beyond the increase of Singaporeans’ wages and beyond the reach of Singaporeans? Is what the government doing fair, when they allow prices to overshoot and allow the rich to be paid higher and higher incomes, while for the lower-income earners in Singapore and the majority of us, we are made to settle with wages which haven’t grown?

Do you think this is right?

Now, before we end off, let me ask some final questions:

Poll 13

I think the answer is quite clear, isn’t it.

Then, my next question is:

Poll 14

If so,

Poll 15

So, Singaporeans, the facts and statistics speak for themselves. What choice would you make for yourself, so that you would be able to live the life that you want, and so that your children and your children’s children will be able to grow up in a Singapore that is truly fair, just and equal?

The choice is in your hands. It’s up to you now. Make a choice that will respect yourself and your children. It’s time.

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83 comments

  1. student

    Your post only highlight the potential gain from a minimum wage law but completely ignored the potential drawback. What about the unemployment which might result due to the minimum wage? How do u guarantee the minimum wage benefit the targeted group of ppl? In the united states, only 19% of the increase in income due to minimum wage accrued to the poor. Does this justify the unemployment it creates?

    I am also curious how were the countries selected for comparison. For example, in the chart for average work hour per week, Singapore was being compared to the western countries. Other Asian countries with similar economic development such as HongKong, japan or south Korea is curiously left out.

    To me, this seems like a blog post which deliberately misled the readers who are not well-verse in economics to believe that Singapore only can gain from a minimum wage law.

    Note that im not for or against minimum wage. I just hope that if you intend to ask for public opinions, then please provide a balanced view instead of just showing one side of the coin.

    • Roy Ngerng

      Look out for the next few posts, which will follow from this.
      Also, for the countries compared, the ones selected were those with a similar level of GDP per capita, as stated in the article. Singapore is the third richest country in the world, by GDP per capita. The cost of living is also similar to these countries and should be compared accordingly.

      • Adam

        I stayed in Melbourne for 4 years, came back to Singapore for about 2 years and am now currently residing in Vancouver for the past year. The cost of living in both places is NOT similar to Singapore. I cannot and will not be able to have a decent meal out for less than $9 in either countries (fast food do not count, and by decent it means your regular lunch you order at food court, nothing too fancy). Transportation start from $2+ dollars in 2 hour blocks and obviously if you travel further, the cost will increase (and just for the record, a lot of Melbournians and Vancouverites use public transport to get around). GST/PST is 12% in Vancouver, 10% in Melbourne compared to 7% in Singapore.

        It is all these little things that add up so you cannot be using the awesome GDP per capital of Singapore to justify the comparison. I can go on and on about the differences in cost of living but if you travelled to other western countries that are on the chart comparing working hours, etc, you will quickly realize the higher cost of living on almost everything (which is partly caused by having a minimal wage). Sure, a minimal wage WILL increase overall wages but everything else will increase to compensate for that cost increase.. which will be a zero sum game in the end.

        So it’s a double edge sword for any political party.. have minimal wage and have a higher cost of living or have no minimal wage, lower cost of living and a more attractive work force? As much as many of you detest the policies of PAP, you must understand that there are many factors beyond their control. I would say that many of us are like frogs in a well even. Just be glad that Singapore is not heading down the path of China whereby they have an increasing cost of living while their wages are not increasing quick enough to compensate.

      • Roy Ngerng

        Hi Adam,

        Please compare the housing prices, cars, education, healthcare etc. If all you need to do in life is to eat and sleep, that’s fine, welcome to Singapore.

        If you need a roof over the head, if you need to move around with children in toll, if you need to see the doctor when you are old, and if you want to be educated – things are thoroughly expensive here. Please compare these. In the Western countries, there are massive subsidies for healthcare and education, among other things. In Singapore, we pay the highest for healthcare out of pocket.

        And before anyone says that they have higher taxes – people working there also know to ask for salaries which take into account the taxes, so that they still get paid high salaries as well.

        Have you been to Hong Kong recently? They implemented minimum wage in 2011. Did you see an exodus of people and businesses out from Hong Kong?

        And in case you have forgotten or have chosen to ignore, in Singapore, from 2000, and I quote what you say about China – Singapore has an “increasing cost of living while their wages are not increasing quick enough to compensate”.

        Dude, whatever you want us to fear about China has already been happening here for the past 13 years, and doesn’t seem to stop anytime soon, so perhaps before you chastise another, you can also sweep up your own backyard.

        Roy

      • Adam

        Eh.. you do spend a huge chunk of our money on food and day to day costs.. so you should not be discounting these.

        But hey, I will play along. I am paying $66.50/mth for my compulsory “free” healthcare that I have not used at all since I arrived in Canada. Sure, maybe if I fall sick in my twilight years, all these payments over the years will come to fruition.. but I do plan to come back to Singapore. “Free” healthcare has it’s downsides too, it is about a year plus wait to see a specialist from what I understand from a friend’s dad that has cancer. Want to deal with your life threatening illness faster? Go to the States where there is private healthcare that cost a lot more.

        Education is not free in Melbourne or Vancouver for their citizens, they pay about the same rate as what you would’ve paid if you entered NUS or the likes. Granted, I do know that scandinavian countries have free education for their universities but not having lived there, I cannot comment much.

        It’s roughly 300k to 400k for a 2 BR apartment here in Vancouver (and that is in the further out areas, think Boon Lay or Jurong). There is no govt grants, low mortgage rates or subsidized housing to help with your payment, good luck on your first home. And how many times do you buy a car in your life?

        And I am not going to touch on income tax cause the rates here is just plain silly (I mean, just google and you will be glad you are paying what you are paying in Singapore). Here is an article about Hong Kong: http://www.scmp.com/news/hong-kong/article/1227048/minimum-wage-rise-wont-help-citys-poorest-figures-show. Just google and there will be many similar articles that can show you the negative issues (and of course, positive) of minimal wage.. but we aren’t playing the google contest are we? But Hong Kong isn’t in a nice situation either.. but hey, Singapore is always worst off right?

        Ultimately, we can debate back and forth about the pros and cons about implementing a minimal wage in Singapore. What I am saying is, you have to consider a lot of other factors instead of just putting up charts and numbers to shock and awe your blog visitors. All I am doing is showing that it is not always prettier on the this side of the grass.. and that is having experience from having lived in 2 “livable” cities.

      • Roy Ngerng

        OK,

        I did a search too by the way:

        http://www.economist.com/blogs/freeexchange/2013/02/labour-markets

        http://www.uvm.edu/~vlrs/doc/min_wage.htm

        http://expecon.gsu.edu/jccox/research/political.pdf

        And sure, we do spend a “huge” – no, let me rephrase, some – chunk of our money on food and day to day costs. Maybe you would also like to look at how much housing and the other costs actually contribute:

        http://www.singstat.gov.sg/news/press_releases/cpi-jan-jun2013.pdf

        And, while we are at that, do look at how much more burden the poor have to shoulder.

        Meanwhile, instead of stay in Canada, I would like to welcome you to Singapore and perhaps come and live the life we live, since you find the current state of Singapore quite endearing.

        Roy

      • JSX

        Dear Adam…
        If the cost in Australia is so “high”, why is that the working holiday scheme is closed from Singaporeans but available to the “lowly paid” Taiwanese or Malaysians for that matter? The bottom 40% Singaporeans are too highly trained to be reaping this sort of pay in Singapore imho . Even Most of the Taiwanese who are working in Australia thinks its much better paying than Taiwan. And how is the Ministerial pay for the leaders in Singapore justified with this sort of result slip? Its insulting for any Singaporean with a brain imho.

        Zero sum game? wait till you see the prowess of the Australian economy .

      • Adam

        Just for the record, because I can sense some animosity here.. I am a Singaporean, born, bred and raised: did my education in SG, fulfilled my NS obligation, ICTs and now currently working for an MNC that allows me to be travel and be stationed overseas as work. I do plan to return to Singapore as mentioned in an earlier comment. Do I wish the PAP to be out? Yes. Do I think there is a more competent party to replace them? No.

        Roy,

        Now, I applaud you for your time and effort in your rebuttals, but I did not once state my concern about unemployment which your links seem to serve.. I merely share my concern about the use of your charts and numbers and the countries you compare Singapore with. You claim that it is fair to use them as comparison because of a similar cost of living which I came in to debunk with hard facts having lived in 2 countries you are using to compare against. Furthermore, you do agree in an earlier comment that higher salaries do account for higher taxes, which is a common factor that many of these countries that you compare Singapore against have. So you want higher taxes too eh? What I am saying is, numbers are merely numbers and without context, you can twist them to your rhetoric. Again, I do agree that something needs to be done with regards to the depressed wages in Singapore but I just take issue with the fact that you conveniently compare Singapore’s wages and working hours with countries that have various reasons for their higher wages and lower working hours (of many which are in no better state than us). I might even dare say that your numbers serve no purpose to your argument other than to mislead or prove a point to your argument. It is like saying that the poor workers in Pegatron or Foxconn factories making iPhones earn so much less than the selling price of an iPhone.. we should raise their wages to fairly compensate them.. without first understanding that they are happily earning the highest wage of comparable factory workers in the same region.

        Secondly, Based on your Singstat link, you do prove that day to day expenses is quite a significant cost, close to 50% when totalled. Housing is not just rent or mortgage, + internets to you if you can find the breakdown (hint: housing include costs that makes a house a house). Since the google-fu is strong with you, you can also google the correlation between minimal wage and the rise of cost of living each time it is bumped. Yes, I do agree again that a minimal wage WILL increase wages overall but it will also increase the cost of living which is detrimental or no assistance to the lower income groups that you are looking to help (again, you can google this..).

        JSX,

        Pardon me but I do not understand the point you are trying to make. Are you saying that Singaporeans are too highly paid to be included in their working holiday visa scheme? I do not know the policies and reasons for such but if you think that having temporary workers getting paid minimal wage to do the jobs that Australians do not want to do is a great idea and contributor to their “economy prowess”, I would like you to rethink your stand of Singapore inviting immigrants to do the the jobs that we do not want to do at a lower wage. Also, with regards to this “economy prowess” you speak of, I highly doubt it has got to do with Australia’s minimal wage but more of their natural resources and exports going to China. They were able to weather the GFC simply because of this. Now that China’s growth has slowed, Australia’s growth has also slowed considerably too. And here is a tidbit, many Australians do share similar sentiments like Singaporeans about having immigrants coming in to do low paying jobs or any of their jobs of that matter. They are sort of facing the same issue too (just ask any of your friends that came back or are currently studying/working in Aussie).

        Yes, I agree that the payscale of our “ministars” are out of whack.. but I do sometimes wonder how much of a percentage the budget or GDP (since everyone loves to throw this around) do their total salary account for though. Again, do I want to see the PAP out? Yes, but I do not think any party is competent enough to take over them at the moment.

        Anyhow, I think I am done here. Roy, I do sincerely thank the time you take to answer the questions and trying to make a change. I also agree a lot with you say in the later parts of this post. If we have more Singaporeans like you, we might make Singapore a better place.. but please just use numbers in context :p

      • Anthony Sim

        Hi Roy,
        Well done on this article. I am responding to Adam.

        In response to Adam, who have lived in Melbourne for 4 years. Adam, I am not sure if you were studying or working in Melbourne, and of course you will be classified a Foreign Visitor. The tax structure is different from citizen, as your tax contribution will be slightly higher, You will have to pay Medicare levi but you will never get to enjoy medical care privileges. Is this the reason you are pissed off with the system? Were you also paid in SDG if you were working here which make sense why you find the cost of $9.00 meal and the $2.00 bus ticket is expensive in your context. For your information, education is free for Australian citizens until yr 12. Fees in tertiary colleges are structured differently from Overseas students. You should have spent some time asking the appropriate institution then giving sweeping assumptions based on your lack of initiative. I can tell you a little, citizens pay a fraction of the Uni Fees and they can get a student loan, payable when they are economically active.
        Comparing the cost of an apartment in Vancouver which is still much cheaper or close to it in Singapore context to a 2 or 3 room HDB is like comparing apple to oranges. You can out rightly purchase this apartments without the constraints as dictated by HBD, HDB is public housing anyway. Try comparing this with a private apartment, which may be 5-9 times dearer than the apartments you mentioned.

        Even with the Australian minimum wage scheme, certain things maybe be more expensive comparing to other cities, no one is complaining and no one is starving. If you have the misconception that Australians are overpaid, for the little they do, then we should not even think of debating this any further.

      • Adam

        Anthony,

        I never complained or “pissed off” about anything.. not sure where you get the impression from. I accepted the structure for both the Medicare levy in Aussie and MSP in Canada, in fact I was paying more in Australia because of my company’s private health insurance policy thingy. I was just illustrating that “free” universal healthcare is not “free” as most people assume.. it’s basically an insurance policy you get automatically enrolled in.

        Eh, primary and secondary education in Singapore is also heavily subsidized or close to free with edusave.. I also know that primary and secondary schools in Australia is also heavily subsidized so I never brought that comparison in. I merely said citizens of both countries pay about the same cost for Uni (or tertiary if you wanna call it that).. which is about 5-10k/annum depending on the course. I never said anything about overseas or intl students.. not sure where you got that /shrug.

        I was paid higher wages which reflected the higher cost of living, which in part is caused by the minimal wage system (and obviously being an expat). With regards to tax, please google the tax that Australian and Canadian citizens pay compared to the tax Singaporeans pay.. and I say again, you will be glad that you paid what you pay for tax. I never once compared the tax rate I paid because I knew I was being taxed a lot higher in Australia, again, not sure where you inferred that from..

        Housing is affordable in Singapore compared to Vancouver regardless of whether it is public or private. A home is a home.. if your aim to get a freehold private house in Singapore, good for you, a HDB is good enough for me when I return. Yes, if you wish to compare with Melbourne, it is also almost on par with Singapore prices actually. However, the key point is that Singaporeans can get a roof over their heads and enjoy a whole lot of grants with a nice cheap mortgage rate (I mean.. the money is already gonna go into your CPF, why not use it to build your asset..? Unlike the Canadians who cannot use their CPP (CPF equal) to pay for their mortgage). People argue that you never truly own your own house in Singapore due to 99 year lease.. but c’mon.. you will outlive the lease and your kids will sell your house long after you are gone or HDB will demolish your house and rebuild a new one or something with another 99 year lease. Some private homes come with 99 year lease too, tough luck? I have Canadian coworkers that worry that their kids may never own a house.. and rightfully so because it is just so hard to get their first mortgage going without aid from their parents. Some might just be content to rent for the rest of their lives. Different country, different strokes.

        No one is starving because they have a very solid social safety net in place.. which the PAP refuse to do so. And I never once said Australians are getting paid too much for the work they do.. I have no idea where you are inferring this. Again, as I mentioned.. I wish that the PAP steps down for a more competent party and I do think many policies that the PAP make is silly.. but arguing for minimal wage because other countries have them is not one of them.. especially not with the numbers and charts Roy is using to support his argument.

    • Roy Ngerng

      To also add on:

      “Most studies have found that the entire net effect of an increase in minimum wage results in a slight decrease in employment. A 10 percent increase would most likely lead to only a 1 percent reduction in employment. The more pressing issue is the matter of a livable wage. Even the state with the highest minimum wage does not meet the criteria for a livable wage. Over 24 cities throughout the United States have enacted a livable wage requirement, in order that people are able to meet their basic needs, such as food, shelter, heat, and clothing. This requirement has resulted in a minor cost increase for employers and a 2.2 percent decrease in employment. For a single person to meet his/her essential needs while living in Vermont, the person would need to make at least $7.98 an hour, and for a family of four it would need to make at least $19.82 an hour.”

      http://www.uvm.edu/~vlrs/doc/min_wage.htm

      • student

        You have to look at these studies critically roy, do the conclusions from these studies apply to singapore? do they have similar economic environments? and most importantly is a 1% increase in unemployment significant or not? it is….

      • Roy Ngerng

        My question to you is – the rich is getting richer and richer, while the poor have seen their real wages decline. Profits have also shot up while wages have remained stagnant. These are all in the statistics.

        So, I ask you – is the country growing, and where is the wealth going to? Do you believe that the rich should keep the wealth, that profits should keep going and should not be passed back?

        We are not even talking about the stage where Singapore already has drastic unemployment and any changes would cause our economy to collapse. The Singapore economy is doing very well and the rich are taking everything into their pockets.

        So, the question is – you have to be critical, student. Do you look at the statistics before you conclude?

    • Elaine

      I have one point to highlight. The most suffering income group is low to mid income group because they dont get grants from government after its exceeding the lowest tier.
      House rental for household income less than SGD$1000 get a good rent subsidy but once they exceeded, the next tier is x1000%.
      The subsidy tiering need to be taken into consideration as well.

    • alvin

      This is extremely flawed analysis. beside from an economical standpoint the low wages stems from oversupply , the price floor will lead to inefficiency

  2. Zen

    It is important though, that while it seems that there is a correlation between productivity and minimum wage through the charts, we must bear in mind that it does not neccessarily mean that minimum wage will lead to productivity. There might be some other variables that are correlated with productivity in this case, for example the working culture of the Westerners and the Singaporeans. This is also true for the case of the seeming correlation between working hours and productivity.

    So while I agree that implementing a minimum wage might protect the less fortunate in the society, I am not sure if it will indeed increase the productivity.

    Nevertheless, thank you for your post which shed some insights to the (disgusting) widening social gap in Singapore. If I were to do a thesis, I would definitely want to investigate on the correlation causation problem that I mentioned! 🙂

    • Roy Ngerng

      Hi Zen, I agree with you – there would also be several other variables, such as the autonomy of the worker to manage his/her own time and the autonomy on the job. There have been studies on autonomy which would also help explain why workers would be more productive.

      Singapore would also present as a very interesting case – I do think if you would want to do a thesis, it would be so interesting if we could map the changes of the Singaporean worker, and how the implementation of minimum wage and shorter working hours, coupled with more autonomy and a restructured education system, would result in dramatic changes to productivity and worker commitment.

    • Roy Ngerng

      Hi,

      As I’ve written before, the S Pass and E Pass were fixed at $1,800 and $2,500 respectively from 2004 to 2011.

      Because they weren’t adjusted, Singaporeans’ wages were depressed to that level, and didn’t increase with increasing costs.

      Also, S Pass is clearly pegged to diploma and E Pass to degree. Does that mean that only degree holders should have a right to the most basic standard of living, seeing that most people believe that $2,500 is necessary for a basic standard of living in Singapore?

      Also, what if you are not a diploma or degree holder? It essentially means that you don’t deserve to have a basic standard of living in Singapore, as your wages will be much lower. And one third of Singaporeans fall into this category.

      As such, the S Pass and E Pass are wage dampeners and have resulted in wage disparity.

      As such, because of these wage dampeners, the low wage earners and new entrants have thus seen their wages depressed, while the rich have gotten several richer and faster.

      So, based on this – Singaporeans can start thinking about what would be better policies to replace these passes and levies.

      Roy

  3. sally

    Hi, I think instead of minimum wage, we should have a cap on employment of foreigners on all levels. 10% cap. Then wages would automatically increase without intervention. The reason why wages and productivity is low is mainly due to cheap foreign labour. One bangala dig a trench, four others watch. Very common.. By restricting foreign import, businesses would be forced to improve productivity. This should be the way instead. Thanks.

  4. jowanzm

    Having a min. wage which is high will only mean that the cost for companies will increase in general. And for the increase in cost, the prices of goods will increase. Who bears the consequences of having a high min. wage? Us, consumers.

    • Roy Ngerng

      Hi,

      I will deal with this in the upcoming article. There are many cost components and many ways of implementing minimum wage and increasing wages.

      It’s a fallacy to think that minimum wage will crash businesses and countries.

      Look at the countries with the highest wages – they happen to be the richest countries. Why didn’t they crash, if so we were led to believe they should have? What made them the richest then?

      This is not time for baseless rhetoric of fear. This is time for real-time data, statistics and facts which clearly justify that minimum wage and higher wages will improve the economy and everyone’s lives as a whole.

      For more reading:

      http://www.aljazeera.com/indepth/opinion/2013/08/20138288333530714.html

      Roy

      • chew

        please wake up your bloody idea. you are truly delusional. I presume you are a young Singaporean that isn’t achieving as much as your peers and decided that the system is flawed. all the charts are misleading. your so called comparing to similar wealth. I happened to notice you have conveniently left out several Asian economic performing countries. please learn to change yourself to adapt to situations before attempting to change the system.

      • Roy Ngerng

        Read the article properly. I had compared Singapore to other COUNTRIES with a similar GDP per capita.

        Singapore’s GDP per capita is way ahead of Japan, South Korea and Taiwan. And because Hong Kong isn’t a country, many comparisons don’t provide statistics on Hong Kong.

        If you want me to compare Singapore with Japan, South Korea and Taiwan – sure, I have done so before. All these countries, including Hong Kong, spend a lot more government spending than Singapore, and they also spend a much higher proportion than the government here for healthcare. So, their citizens pay much lesser out-of-pocket for healthcare, where in Singapore, we pay the highest among all the developed countries.

        Mind you, and we are the richest of them all. But we have the highest income inequality and the people have the lowest purchasing power.

        FYI, all of these countries have minimum wage for their workers as well.

        Roy

      • chew

        are you hoping for the country to provide for you? are you trying to change the system to squeeze money out of the rich to benefit the likes of you? if that’s what you are thinking you might be in the wrong place, young man. do you understand the idea of meritocracy? I do not disagree that given our decades of prosperity we should not put in some help to help the low income. but beyond that, everyone is on their own. if you are not wealthy ,work your ass off for it. may I know are you even working? from your constant reply to the comments throughout the day, you seem to be really free. work for what you want. if you are not willing to work for it, then do not complain

      • student2

        LOL you claimed that you’ve compared SG with Japan, SK and Taiwan but i think you have chosen to omit the facts that do not agree with your claims.

        First, Taiwan. Like you’ve said, you didn’t do much comparison with HK due to how HK is not a country, oh, then TAIWAN MUST BE A COUNTRY RIGHT LOLOLOL. Check out what its official name is – “Republic of China”.

        Secondly, maybe you should take a step back and consider why Japan and SK aren’t performing as well as Singapore. SK had spent a lot of money on the Korean War, and Japan has had its economic decline in the 1990s. Well, the Japanese work very hard and i’m absolutely certain that they spend more time working than Singaporeans. It’s funny how you want a minimum wage, Japan had it too – look how it devastated their economy.

        Thirdly, Singapore is not a welfare state. Why should the government pay for your medical bills? Are you incapable of working and earning for your own healthcare? Since you’re so full of complaints, why don’t you go to the aforementioned countries and enjoy “better living standards” then? Oh right, because you cannot! WHY MIGHT THAT BE SO? Because they don’t want you! It’s really so sad for you to be publicizing your resentment towards this system of meritocracy just because you’ve failed in it.

  5. Roy Ngerng

    Hello readers,

    Additional reading:

    “In Germany, where the unemployment rate is just 5.4 percent, the average hourly wage, adjusted for inflation, has risen by more than 4 percent since 2010. By contrast, in the US real wages have barely moved for more than a decade. The main difference is that workers have no bargaining power in the US because of high unemployment.

    Many people look to Germany’s low unemployment and attribute it to a booming economy. In fact, Germany’s economy has grown no more rapidly than the US economy since the start of the downturn. Yet remarkably, Germany’s unemployment rate fell by two percentage points since 2007, while the unemployment rate rose by almost three percentage points in the US.

    The reason for this difference is that Germany has an institutional structure that encourages employers to keep workers on the job but working fewer hours, rather than laying them off. This is a good short-term policy to deal with a temporary shortfall in demand. It is also a good long-term policy, since workers take part in the benefits of productivity growth in the form of more leisure time.

    The average worker in Germany today puts in fewer than 1,400 hours a year, according to the Organisation for Economic Cooperation and Development. By comparison, an average worker in the US works 1,790 hours a year.

    *****

    Such a reduction in hours will not only have direct benefits for workers enjoying more time off, it will also help to reduce unemployment and increase workers’ bargaining power. This will make it more likely that they will be able to share in the benefits of productivity growth in the future. That’s certainly a much better picture than high and rising unemployment.”

    http://www.aljazeera.com/indepth/opinion/2013/08/20138288333530714.html

  6. Yi Ling Liew

    Indeed your arguments are sound, from an individual’s point of view. Who doesn’t want to be highly paid the moment he or she graduates – even better, be highly paid WITHOUT graduating. I definitely want to. But we all do know that graduates and non-graduates earn different incomes – the starting pay of a graduate is definitely higher than that of a non-graduate – this is the case for EVERY nation (unless you’re an incompetent person), no arguments.

    While Roy, i do applaud you for your effort in trying to make this post more interactive, why then, are your questions so vague? How can you ask about minimum wages as though it’s the same across the board?

    Further, i’d like to point out that you have made very presumptuous and even fallacious arguments in your post. Indeed, your English is rather commendable, but an important question here – where in the world did you get chart 14, which indicates that poor Singaporeans earn really little? What’s the source? Yourself? You and i do know that you’ve made some computer editing to the chart, am i wrong?

    Yes yes, you may argue that you’ve merely just inserted Singapore into the chart, what gives? First, what form of measurement have you used to derive the statistics for Singapore? Secondly, which website did you even obtain the original graph from? The nations listed in that particular graph are OECD member states – not what Singapore is. These states all do not run under free-market policies like Singapore does. How can you compare our wages?

    The reason why Singapore has not put a minimum wage level, is because we have a free economic system, my dear. You do know what that means right? Implementing a minimum wage level would mean distorting market forces. Maybe you should wonder why Hong Kong is not in this list too? Because like Singapore, Hong Kong (or China for that matter) is not an OECD state because of our free market systems.

    Furthermore, it’s funny how you’ve listed the ratios of some nations’ working hours in juxtaposition to Singapore’s. Makes me wonder why no South-east Asian nation is listed in it.

    The next question i’d like to ask is if you own a smartphone, a car, a computer, or a television set. I assume you do, most Singaporeans do. How is it then, that living costs are beyond our reach if you own these non-essentials? It’d be beyond most Singaporeans’ reach if the people earning less than $2000 cannot afford a roof over their heads, or even three square meals a day. Unlikely, right, Roy?

    Further, i quote you – “grow up in a Singapore that is truly fair, just and equal”. What is equality to you then, Roy? For every Singaporean to earn the same? Then why would anyone bother with education, what difference would it make?

    Also, i don’t understand what the problem is with income disparity. I find it highly disconcerting that you, in Chart 23 (which you’ve edited again), are comparing Singapore’s income disparity levels to these nations. What about China, and perhaps, Saudi Arabia? Back to the supposed problem with income inequality – indeed the ministers are earning a lot, but maybe we could consider how much they’ve invested into their education and how well they’ve done in school in the past. What about comparing these ministers to the people with similar achievements (academic wise)? Obviously someone who has no university degree wouldn’t earn as much (or even half as much) as a minister would, right? In Chart 12, you are trying to show the various GDP/capita rates in the nations, but where is Singapore? In fact, where did you get that graph from? Singapore’s paying so much to the ministers, and i concur, perhaps too much for my liking too, because we can afford it. Singapore’s GDP/capita ranks (at any point in time from 2009-2012, according to WB, CIA, IMF) top 5. Sucks that the poor are paying taxes to fund the ministers’ wealth right? Except that they don’t pay taxes.

    I mean i haven’t read everything you’ve written, i confess. But i find many points rather fallacious and i also can’t help but to question where you get your charts and graphs and pictures from. I don’t think that the charts that you’ve made edits to would be as credible as the statistics obtained from established organisations like IMF or the World Bank (their success is another matter in itself), right?

    I do agree that some points you’ve raised is disconcerting, as are the polls you’ve created. But have we all stepped back to ask why? Meritocracy. Perhaps it isn’t the best form of democracy or governance yet, but this is what Singapore has been built on. It’s sad that neither you nor i belong to the upper echelons of this economy, but does it matter if we are living comfortably? Obviously i’d want a smartphone, a car, a big house, but these are non-essentials. The resentment in your post is unmistakable, and to have resentment fuel your arguments inevitably engenders one-sided and biased POVs.

    I think we’re all entitled to our own views, but the government is trying to please everyone. It does not make sense that they do not, because they need our support. This post, that’s recently posted by you, does not include any reform policies from the government (which could have messed up previously), and it makes me wonder why.

    Maybe if you and i study/studied a lot harder and obtain(ed) good grades as good as the ministers, we wouldn’t have to bathe in resentment anymore. Same goes to all the other people earning less than $2000. Too bad, life isn’t fair.

    • Roy Ngerng

      Hi, please read my other posts. Thank you for your comment but these are answered in the other posts before.

      I will say this – I used to think like you. I wanted to appreciate the government, but what we need to learn to understand is not to hear what is being said by the PAP, but to see beyond to look at the statistics and understand the principles with which the PAP uses to make their policies.

      Don’t take my word for it, but go speak to some of the most entrenched “volunteers” with the PAP, and find out why they do it.

      FYI, more than 80% of the countries in the world has minimum wage and the last I heard, they function in a free market economy as well – Hong Kong has minimum wage since 2011, and I believe that we both agree that Hong Kong is possibly as “free” as Singapore. In fact, the countries with the highest wages in the world do not have minimum wages, but they have something better – strong unions who collective bargain and uplift the workers’ wages and businesses which have the ethics to appreciate this.

      I don’t agree with what you have said but I accept that you would like to express your views, as I would mine.

      What really matters is what Singaporeans believe, and how we would vote to effect what we want for ourselves at the next election.

      Thank you.

      Roy

      • student

        Hi Roy, firstly, looking at the statistics is the right way to go, but not with such superficial analysis. To really see what the statistics are saying, each of the statistical charts you have displayed above requires more than one or two paragraphs of cursory analysis (wage levels, GDP per capita, gini coefficient, productivity, even fertility rate, EACH of these topics are so complex and intricate that researchers have spent decades studying their effects, to simply cover these topics in one paragraph is way to inadequate).

        For example, GDP per capita (curiously singapore is missing in your graph). You said that countries with higher wages have higher GDP per capita, but it is obvious you only looked at luxembourg and mexico (and the few countries around it), what about turkey? new zealand? portugal? japan? isreal? the countries in the middle? they do not exhibit this effect. and even if they do, cant it be applied to singapore?
        What about the countries that were in your GDP per capita graph but not in the minimum wage graph or do not have a minimum wage?
        Next, did you consider the country size when using GDP capita as a statistic? GDP per capita is skewed towards small countries like Luxembourg.
        Lastly, you did not mention any statistics on the CORRELATION (what is the variance coefficient?) between gdp per capita and minimum wages. THIS would be the true and precise measure whether countries with higher minimum wages have higher GDP per capita.As such, there is no compelling statistic to substantiate your argument for this point AND this is just for ONE of your above-mentioned statistics.

        As you start to consider each of these statistics in greater detail, you may even find that minimum wages are not as effective or even counter productive in the Singaporean context. We do not know and/or cant tell from your article as such no policy change should even be considered based on this.

        I really hope there are enough Singaporeans who really think through the issues carefully before voting in the next election. They must understand, especially us youths, that WE will be bearing the consequences should we vote in a government that is incapable and does not consider such issues carefully. Believe it or not, it is not hard to destroy singapore’s economy, even within a few years.

    • Roy Ngerng

      You know, this might sound sinister, but I have a hope that you will only earn $800 for the rest of your life. I do want to see how you will manage when that happens, and then we can come back here and say, “too bad, life isn’t fair”.

      Because, life can be fair – if we have the heart to make it happen. As many other countries which believe in fairness and equality, truly, have done so.

      • cheryltaro

        Hi Roy!
        I’m not saying I disagree entirely with your view, but I, too, think that providing a more balanced analysis would be more accurate 🙂 Most of the stats are deduced prima facie, but I’m sure there could be more in-depth understanding into the numbers before conclusion is drawn. That being said, I like how informative your post is, thanks!

    • sally

      NTUC has already implemented min wage of 1000 per month. They try implementing it on the security industry without success. This is manipulation. By.the way who decides what the min pay should be? Very contentious issue. Since Yi Ling is vehemently against the idea, has she wrote in to ST to complain NTUC? Why write so much here but yet never opppose NTUC doing it? For me, I am more practical. Today wanbao say 65% foreign PME hired in construction and 50% PME hired in service sector. We Singaporeans are educated and can do these jobs. Why hire foreign PME with dubious certs? I will continue to vote against PAP until they can bring down foreign PME to 10% so that our pay will rise.

      • Joe

        Hi Yi ling,

        Sorry to make it straight. I would simply assume that you do not truly understand the hardship that the lower income people are having. Throughout this recent years, the grown of Foreign talents in singapore is rising. Which leads to taking up most of our singaporeans job. On top of that, low wages is being paid to people who do not have a proper certificates in singapore. Perharps you come from a wealthy family, you can receive a proper and good education. But let me remind you, not everyone is same as you. Have you ever put yourself into the shoes of others? Think for the less fortunate people? Let me just do a quick summarise of how much you exactly need to survive in singapore.

        Expenses on food – avg min. of $5.50 per proper meal including drinks.
        $5.50 x 3 meals per days = $16.50 per day
        $16.50 x 30 days ( 1 month) = $495

        Transportation to and fro office commute
        Per trip avg of $1.80 (bus and mrt)
        Per day you travel 2 times. To work and back from work. Which cost $3.60 per day
        Lets just say your working 6 days a week and 24 days a month.
        $3.60 x 24 = $86.40
        Weekend cost of going out for a getaway – $5.50 per day
        $5.50 x 6 = $33
        Sum up per month $86.40+$33 = $119.40 ($120 round up)

        Home electrical bills – lets just say $150 per month ( 4rm with 4 person staying ) including usage of air con.

        Home line + HP bill + internet bill = Avg of $80 per month

        Healthcare – settling aside at least a $50 per month.

        Giving monthly allowances to parents AT LEAST $250. (my personal point of view)

        Overall $495+$120+$150+$80+$50+$250= $1145

        So in conclusion lets just say your earning a $1500 ( avg mid earning wages for singaporean)
        Gross $1500
        Nett after deduction of CPF = $1200

        $11200 – $1145 = $55<—— This is what your left with for saving up PER MONTH.

        Can you accept the above facts? Or do you have better calculation?
        All the above mention is the most basic needs required for a person.
        So what can you do with the additional $55 per month?
        Fair enough, think about those earning less than $1500 per month. How do they survive? You ever know the feeling?

        Or rather lets just say your still single. Take home a total of $1200 nett. After deducting $495 for food, $120 for transports, $30 for hp bills, $250 for parents. Your left with $305 per month to save.
        $305 x 12 = $3660 this is what you can only save per year.
        If your thinking of getting a HDB, it costs at least a $250k for a basic 3 rm flat.
        A 10% cash down payment is needed, even if you think of getting a housing loan. Simply, 10% cash cost you a $25k.

        So if you only can save $3660 per year, you need to save at least a 6 years+++ before you can afford for the down payment. Subsequently you gonna end yourself in debts again, repaying the loan.

        Is there anybody out there, that enjoys this type of life?
        Sorry to be that straight Yi ling, but if you have not truly experience the feeling of being poor, earning low income, i guess you do not have the right to criticise that much on this posts.

        Sincerely,
        Joe

    • readliaodl

      When I read the tone of your reply, Yi Ling, I thought you were damn pro at this topic. Turns out you were merely being a detective questioning sources but not mentioning even a few quality thoughts on minimum wage. To disappoint my expectations of you further, you ended your argument with “but the government is trying to please everyone. It does not make sense that they do not, because they need our support.” & “Maybe if you and i study/studied a lot harder and obtain(ed) good grades as good as the ministers, we wouldn’t have to bathe in resentment anymore…….”. Wah lau eh! the GOV DOESN’T have to please EVERYONE just because the GOV needs our support AND neither does the GOV need all our support (GE 60%, PE 34%)! All it needs to do is to cover all the main policies, perhaps those affecting our living costs & implemented against our wishes, with a few of your favourite reform policies, GST Voucher etc, that for some reasons actually worked to retain it’s legitimacy in the people’s heart! yes yes, all of these supporting policies are effective in helping but to judge if the gov really cares for any class of Singaporeans, we have to look at all the main policies implemented right?

      As to “Maybe if you and i study/studied a lot harder and obtain(ed) good grades as good as the ministers, we wouldn’t have to bathe in resentment anymore. Same goes to all the other people earning less than $2000. Too bad, life isn’t fair” and all of your attempt to defend the ministers’ salaries saying its justified and people with same grades will earn the same amount. please leh, pls ask someone you know with grades better than our ministers in SG if they are earning the same amount or better? they are not called the highest paid ministers for nothing. Don’t forget that their salary WILL GROW with SG’s economic performance. Also, just because “too bad, life isn’t fair”, it doesn’t mean that it does not matter if we are living comfortably and it doesn’t mean that we just take whatever as it is! So can I snatch your $100 away because too bad, life isn’t fair, I’m more evil so I can take away your stuff? And then you just say too bad lor, life is like that. If a change is needed and justified, please at least start thinking deeper and stop merely appreciating the gov.

      • Yi Ling Liew

        Hello readliaodl, thank you for taking the time to analyse my comment, i’m honoured that you’ve decided to devote time to disagreeing with me. I do thank you for complimenting on my tone! Perhaps what you’ve said has some validity. It’s funny how you commented on me just questioning the sources – because that’s the basis of roy’s argument! I mean, if all his sources are fallacious and conjured up from fraudulence, then his arguments don’t make sense, no?

        And to the point about earning as much as a minister… i can only shake my head. Indeed, someone who has had the same qualifications may not earn as much as a minister. Why? Because he is not a minister! Oh ya, i’m sure it’s easy to be a minister to deal with all our disgruntlement and to run a country ^^

        Thank you for making my day with your best and most classic statement – “So can I snatch your $100 away because too bad, life isn’t fair, I’m more evil so I can take away your stuff?” This doesn’t even demonstrate how life is not fair fundamentally. What i was referring to, about life being unfair, is what we’re all born into. It’s not fair because perhaps you earn less than other Singaporeans, it’s also not fair, because you are not a woman who lives in the Middle East or India (: It’s funny how you’ve just conveniently misconstrued what i’ve said LOL.

        LOL and ya maybe a change is justified, but have you justified it? Yes indeed i’m sure you’ve been thinking deeply with your funny analogy.

    • Joe

      SEPTEMBER 19, 2013 – 3:10 AM
      Joe
      Hi Yi ling,

      Sorry to make it straight. I would simply assume that you do not truly understand the hardship that the lower income people are having. Throughout this recent years, the grown of Foreign talents in singapore is rising. Which leads to taking up most of our singaporeans job. On top of that, low wages is being paid to people who do not have a proper certificates in singapore. Perharps you come from a wealthy family, you can receive a proper and good education. But let me remind you, not everyone is same as you. Have you ever put yourself into the shoes of others? Think for the less fortunate people? Let me just do a quick summarise of how much you exactly need to survive in singapore.

      Expenses on food – avg min. of $5.50 per proper meal including drinks.
      $5.50 x 3 meals per days = $16.50 per day
      $16.50 x 30 days ( 1 month) = $495

      Transportation to and fro office commute
      Per trip avg of $1.80 (bus and mrt)
      Per day you travel 2 times. To work and back from work. Which cost $3.60 per day
      Lets just say your working 6 days a week and 24 days a month.
      $3.60 x 24 = $86.40
      Weekend cost of going out for a getaway – $5.50 per day
      $5.50 x 6 = $33
      Sum up per month $86.40+$33 = $119.40 ($120 round up)

      Home electrical bills – lets just say $150 per month ( 4rm with 4 person staying ) including usage of air con.

      Home line + HP bill + internet bill = Avg of $80 per month

      Healthcare – settling aside at least a $50 per month.

      Giving monthly allowances to parents AT LEAST $250. (my personal point of view)

      Overall $495+$120+$150+$80+$50+$250= $1145

      So in conclusion lets just say your earning a $1500 ( avg mid earning wages for singaporean)
      Gross $1500
      Nett after deduction of CPF = $1200

      $11200 – $1145 = $55<—— This is what your left with for saving up PER MONTH.

      Can you accept the above facts? Or do you have better calculation?
      All the above mention is the most basic needs required for a person.
      So what can you do with the additional $55 per month?
      Fair enough, think about those earning less than $1500 per month. How do they survive? You ever know the feeling?

      Or rather lets just say your still single. Take home a total of $1200 nett. After deducting $495 for food, $120 for transports, $30 for hp bills, $250 for parents. Your left with $305 per month to save.
      $305 x 12 = $3660 this is what you can only save per year.
      If your thinking of getting a HDB, it costs at least a $250k for a basic 3 rm flat.
      A 10% cash down payment is needed, even if you think of getting a housing loan. Simply, 10% cash cost you a $25k.

      So if you only can save $3660 per year, you need to save at least a 6 years+++ before you can afford for the down payment. Subsequently you gonna end yourself in debts again, repaying the loan.

      Is there anybody out there, that enjoys this type of life?
      Sorry to be that straight Yi ling, but if you have not truly experience the feeling of being poor, earning low income, i guess you do not have the right to criticise that much on this posts.

      Sincerely,
      Joe

      • student

        Hi Joe, if you are poor and earning low income you would not say how much i need to spend on food per day, how much i spend on transportation per day.You would be doing it the other way around, it would be like this: i have $X per day, how much can i AFFORD to spend on food, transport etc…. if that amount is not sufficient to live on then he deserves help from the government.
        In addition, if you are earning $1500 a month i do not think you would use air con, nor is air can a basic necessity in singapore….
        Secondly, you say $16.50 per day for food? a 5kg bag of rice costs $14 from NTUC… or 8 loaves of bread at $2 each …. who eats 5kg of rice a day?…
        If you are single, why would you buy a 3 room hdb flat??
        If you are married, you have to include your wife’s income, and subsidiaries from the government…..

      • Yi Ling Liew

        Hello Joe, with all due respect, thank you for taking the time to consider my comment, and thank you also for helping us calculate the expenses. But, I don’t know why you actually consider yourself poor, and saying that only if I’m poor, I can criticize.
        First, are you poor? I think the careless use of the terms ‘poor’ and ‘less fortunate’ make me cringe a bit. I think I wouldn’t accept it if I were to belong to the lowest tier of the economy in Singapore, but even then, assuming you do belong to this tier, you are pretty damn lucky. Because in your calculations, you’ve included telephone and internet expenses, and air-condition use no less!
        Nobody likes being the poorest in the economy, but I guess rather than to condemn what I’ve said, maybe you could write to the government? I mean, I can’t stop you from voting for the people you think can represent you, but maybe I’d like to ask you this question first – “do you actually know what their ideology is?” For all you know, they could be trying to reform Singapore to be a communist state (whether communism is good or bad is another issue altogether), and are you willing to let that happen?
        I can safely say that $1500 is not an average income of the middle class – even as an employee who sells drinks at a food court, you’ll earn at least $2000 (not inclusive of OT). And I also don’t know how the foreign talents in Singapore actually affect you in your job search – people are employing everywhere! It only depends on whether you want to accept that job.
        I must say that you’re more privileged than me, and that your assumption about me being ignorant about the “hardships that lower income people are having”, because I’m less privileged than you – I don’t even use the air-conditioner!

      • Joe

        Hi yi ling, honestly speaking. Im still in doubts of whether you under what im trying to say.
        Firstly, are you even out in the working society?
        Secondly, you said you can safely assure $1500 is not the avg? So meaning to say $2000 is the avg? Do you even know how much can a fresh diploma holder earn? They starting out wages would be ranging from $1700-$2000 only. So if you were to say a drink store employee simply can earn $2000 without a need to have any cert. I guess everyone would not be thinking of going to the poly. Since easily you can get a $2000. What a joke from you.
        Btw, do you even know how much a private diploma holder gets for working in a admin office job? FYI, they are only geting $1300-$1500. So if thats the case, i guess everyone shall just go work at drinks store right?
        Adding on, the household electrical bills im stating is just an avg and rough guide line. Using air condition is just an additional thing to consider into. Doesnt mean im using it often as well. Do you even pay for your house electrical bill? Do you even know how pain is it to support a whole house?
        Im just voicing out my own point of view because i have seen alot of changes going on for years. All the hardship i had went through in the past. I dont come from a wealthy family like you do. I did not receive any proper education like how fortunate you are. I started out from the lowest form till now where im really on high.
        You may think our government is the best. Changing the best for us. Its all up to you to think. Slowly see for yourself little girl. Its not that simple and easy for you to see through.
        All the best and take care.
        🙂

      • Jasmine

        Please lah, Joe. You are arguing with a little girl born in 1996. This Yi Ling is barely 18 & the maximum work experience she has would probably be internships or holiday work. She doesn’t even know what is the real market rate for salaries. She is just looking at statistics on avg rates given by “official” sources like The Straits Times, MOM etc painting the most ideal picture. She doesn’t even know what is going on on the ground. Plus these avg rates do not account for CPF & is not actual take-home pay which is 32% less.

  7. student

    Hi Roy, firstly, looking at the statistics is the right way to go, but not with such superficial analysis. To really see what the statistics are saying, each of the statistical charts you have displayed above requires more than one or two paragraphs of cursory analysis (wage levels, GDP per capita, gini coefficient, productivity, even fertility rate, EACH of these topics are so complex and intricate that researchers have spent decades studying their effects, to simply cover these topics in one paragraph is way to inadequate).

    For example, GDP per capita (curiously singapore is missing in your graph). You said that countries with higher wages have higher GDP per capita, but it is obvious you only looked at luxembourg and mexico (and the few countries around it), what about turkey? new zealand? portugal? japan? isreal? the countries in the middle? they do not exhibit this effect. and even if they do, cant it be applied to singapore?
    What about the countries that were in your GDP per capita graph but not in the minimum wage graph or do not have a minimum wage?
    Next, did you consider the country size when using GDP capita as a statistic? GDP per capita is skewed towards small countries like Luxembourg.
    Lastly, you did not mention any statistics on the CORRELATION (what is the variance coefficient?) between gdp per capita and minimum wages. THIS would be the true and precise measure whether countries with higher minimum wages have higher GDP per capita.As such, there is no compelling statistic to substantiate your argument for this point AND this is just for ONE of your above-mentioned statistics.

    As you start to consider each of these statistics in greater detail, you may even find that minimum wages are not as effective or even counter productive in the Singaporean context. We do not know and/or cant tell from your article as such no policy change should even be considered based on this.

    I really hope there are enough Singaporeans who really think through the issues carefully before voting in the next election. They must understand, especially us youths, that WE will be bearing the consequences should we vote in a government that is incapable and does not consider such issues carefully. Believe it or not, it is not hard to destroy singapore’s economy, even within a few years.

      • Joe

        Hi student,

        So are you trying to implement that everyone should just buy a pack of 5kg rice and eat at home? Eating just pure white rice?
        What if your working from morning till night?
        Rush home to cook white rice to work during lunch and diner time?
        Even if im married, i would be using my own money to buy for the flat. Maybe for you, you would be using your wife money to buy flat and also to pay for your own expenses? What a MAN you are. But as for me, i would not do this. Sorry dude.
        From the way you speaks, i suppose that your still young and have not gone out into the real working society. Still taking pocket money from your parents? Wait till your really out in the working society, being independence. Then you would truly know the feeling.

        P.S: No offence, but i sincerely hope that you would earn even less than a 1.5k per month next time. Lets just see how you can survive out there.
        Opps. Sorry, i just forgotten that you got your parents and girlfriend to pay for your expenses as well dude. Good life.

      • chew

        hi roy
        are you delusional? if you are poor, of course you should not accept it but should instead change it. how? by working yourself out the poverty cycle, and instead of attempting to change the system so that you can enjoy your minimum wage. I have this feeling that you are hoping ignorantly that Singapore will provide for you. I.sincerely hope that is not your mindset.. otherwise you are just a pathetic guy

      • Anthony Sim

        Hi Student,
        for someone who is still studying, you have warped disbelief on a system that should be fair. A minimum wage policy will not ruin or destroy a country. Who are you surrounded with? Those elites whose parents provide everything for you? Just be pragmatic and come down to level of average Singaporean and then you may under a little bit more.

      • student2

        LOL roy you just shot yourself in the foot by saying that Singapore can be compared with “other high-income countries”. So it must be a fair comparison since singapore is a high income country? Then the point of your post is…?

  8. KC

    hi roy, just wanted to thank you on a well written page, and interactive at that too! it is good to have someone compile all these information into one article. it nonetheless seems to have attracted a huge crowd of comments, along with some accusations that the statistics which you have used are flawed. while i don’t profess to be an expert in this matter i for one, do appreciate the concise and simplicity of presentation. 🙂 keep it up!

  9. Steve

    The first commentor, Adam was talking about how impossible it is to spend <$9 per meal in Melb / YVR. Since we're on the topic of Standard of Living / Wage vs. Affordability, does it help looking at the Big Mac Index to see the true purchasing power of Singaporeans?

  10. Silk

    If you can’t pay taxes and eat out daily and take public transport and save more than 2k a month in Canada / Australia, yeah you should seriously reconsider what you’re doing.

    • Random Joe

      Hahahaha…. please pass me what you are smoking cause I can barely save $200/mth in Canada as a decent junior software engineer. I also think I am pretty frugal without eating out daily and his $9/meal sounds a bit extreme man…. food court prices is roughly $7 to $8 or $10 with drinks….. but I can get a sandwich with drink near my workplace for $7. But I agree with him on the house thing…. I cannot imagine buying a house even if i get a raise man

  11. ton

    yep purchasing power yesss i was reading through the topics so complex… how about the ratio of how much singaporeans generally earn – how much they spend (necessity items); disposable income vs other countries??

  12. Guy

    Well, in all honesty I think the post should be objective and not be about resentments.
    If we are willing to work (able person), we will survive.
    If you have a lower income, you have to learn to manage your cost of living. e.g. $2-$3 for simple breakfast, with coffee (20 cents if you make it at home yourself?). You get the drift.
    If you work hard, even if you are a simple hawker helper, etc, you will survive.
    Of course I am against $2/hour kind of salary for example a cashier, receptionist or a security guard.
    But if you have a min wage like $10/hr kind of system, I cannot imagine what Singapore will become.
    Point to ponder…

    • student2

      The reason behind the high wages of the ministers isn’t to increase productivity, but to reduce corruption. And their wages have been decreasing LOL.

  13. Kenneth Lee

    Hello, I would like to point out that the theory proposed by seet min kong from sim is called the efficient wage theory. It is used out of context. According to the theory, productivity of the workers will rise only if they are paid relatively higher than their counter parts in the market that they work in. I.e if all the wages in sg rise by 1000 dollars, productivity will remain constant.

    There’s a lot of effort put into writing the article and I do applaud you for that but it’s a one sided article with heavy bias for minimum wage. There are a lot of draw backs to minimum wage and while there are cases where minimum wages has been successfully integrated into economies, there are also many other cases where minimum wage worsens the economic condition.

    The article is written more like a propaganda for minimum wage rather than to discuss if singapore truly needs minimum wages. I do agree with you that wages in singapore for the lower income groups need to rise but minimum wage is not the best option to do it. A more feasible solution would be through transfer payments for the lower income group but then again, higher taxes for the rich would lead to other complications.

    • Roy Ngerng

      Hi leon,

      Sorry, I was busy over the weekend and haven’t checked in as often.

      Sorry, I wasn’t able to locate your previous comment, if its awaiting moderation. Do you still have the comment? Would you be able to repost it?

      Or did you post it under the same name? I will try to check again.

      Sorry for this.

      Thanks!

      Roy

  14. leon

    No problem Roy, probably lost in the sea of comments within this article. It shows that you have stirred interests from both sides of the fence, which is what this website is about. Good job! I hav re-edited my comments slightly:

    I think there’s no doubt that the right direction for Singapore, and for any other country is to reduce income inequality. The problem, as we know it, is the rich always get richer, and the poor get poorer, Maybe it would be interesting to see how much more equal other nations are compared to Singapore.

    What do you think the proportion of US people earning less than US$1000 monthly is? what about the proportion less than US$1500, and US$2000?

    Well, according to wikipedia: http://en.wikipedia.org/wiki/Personal_income_in_the_United_States…

    In 2010, approximately 20% of Americans earn less than US$850 per month, 35% earn less than US$1500 per month and 45% earn less than US$1900 per month.

    I tried Finland, famed for a more equal society. In 2011, the bottom 10% of Finnish earn on average less than Eur850 per month, the bottom 20% earn on average less than Eur1200 per month and the bottom 50% earn on average less than Eur1800 per month.

    http://193.166.171.75/Dialog/varval.asp?ma=260_tjt_tau_116&ti=4a+Income+shares+%28%25%29%2C+means%2C+medians+and+maximum+values+of+decile+groups+in+1966+-+2011&path=../Database/StatFin/tul/tjt/&lang=1&multilang=en

    Granted the data is outdated by a few years, and there are obvious currency differences, difference in standards of living etc. My research may not be extensive, but I believe that our numbers: 37% of our people earn less than $2k a month aren’t dismal compared to our developed friends in the West with a minimum wage policy. For those wondering why Finland’s gini coefficient is much lower, you may be surprised to find that their top 10% earn on average <Eur4600. Finland incidentally, does not have a minimum wage policy.

    My conclusion from these 2 specific examples show that a minimum policy is not necessary to have greater equality in wages. I'm also slightly perturbed that Finland has such a low upper end salary, maybe friends who have lived/worked in Finland can share the context.

    I think it’s easy to find material online to support or oppose this policy as it’s a never-ending debate among academic scholars and govts. Maybe I can suggest an additional question in your poll: Are you prepared to pay $10 for a plate of chicken rice at your local food court/hawker centre? I believe that any increase in costs associated with minimum wage policies would be passed to consumers, either in part or totality.

    • Roy Ngerng

      Hi, I will discuss the following in a separate article:

      (1) What is the low wage level, in comparison to other countries.
      (2) Also, Finland, and in fact, the Nordic countries, have the highest wages in the world. They don’t need minimum wage. Because they have very strong unions which collectively bargain for the worker’s wages to be the highest in the world.

      Also – they have one of the largest transfers back to the people which pushed down the inequality. This is what keeps the society equal.

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  17. rainbow coloured warrior

    this whole debacle only concludes 1 thing! there are decent manjans with a heart(sic) and “brainwashed nationalistic i study deep deep in my local uni contantly spewing old adage” manjans(sic)

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  19. Lance

    Srry i cant help but post i dont normally do. But i hav a friend that works in singapore thats why my curiosity has lead me here.

    If you guys talk about bad minimum wages and havn no minimum wages at all der are other countries who are going pretty badly.
    My background is filipino i recently just came to the philippines and theyre minumum wage here is 350-400pesos a days work in general labour.

    Seeing how they drive here, i woulda been in an accident 10x the way they drive here compared to canada.
    So here there lives is practically grinding wenever they can.

    Comparing singapore dollar monthly wage of $1000 = 35,000 pesos

    Philippine workers get about 8,000-12,000 pesos = $228 sgd
    and thats if the the warehouse is acutally going with the minim wage law.

    Seeing i only visited here, i do agree with that one guy “claiming” free health care in canada. Is not free at all. Its an investment wen you do get sick.

    They take so many deductibles off
    E.i, cpp, union, health, dental, and extended health care. Besides that insurance companies will bite you off, i once paid $500 CAD for a 2008 hyundai tiburon in, currently may of 2013. And a $300 CAD on year of 2010 for a crappy 1998 saturn coupe.

    Minimum wage der is 10.25 now. Reality, in canada is they take almost half of wat u earn for taxes and insurance and wat soever. You cant drive without insurance.

    Havn controlled to wat you do with your own money completely is wat is. actually prefer. But ppl have der own different views and every country runs differently. But here in phill, you go to the mall and buy nike shoes, it would cost me the exact same amount of money converted from CAD to PHP.

    And seeing how ppl work here and get paid, i feel alot more srry for them. Some ppl work by juss cooking everyday, on side streets and bbq and dats there main income. Not exactly known wat they.ll earn. Juss enough to live for that day.

    Especially getn hit by disaster one after another, i dont think theyd be able to recover wothon a decade. Jus. Sayn before you guys get one sided.

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  23. Aiya relax la

    Guys, guys, guys. Pardon me for interrupting your very educated and google certified debates. I don’t think the main problem in sg is the wage. The poor could be earning low income due to many possible reasons. I’m sure some of these people could do better if they set their heart on it. The rich are getting richer because they have the capital to invest. I think the real issue here is the amount of money the government makes off the population as if sg is a company. Want to control the citizens? Use money. Fine this fine that and they will obey. Control amount of cars on the road? Make them pay $90k to use a car for only 10 years. Put “money trees” along the highway to control amount of traffic during peak hour.

    All these issues can be solved without making people pay. Fines only tells people “you can’t defy the law, unless you’re rich”. COE only means having an EZ link card with $90k value that entitles you to premium private transport for only the next 10 years. I mean, isn’t there any other way to regulate vehicles than a hefty price tag?
    Government monopolize the essentials of living in singapore I.E telecomms, media, and now even mrt is going to be under the govt. what are they going to do with all these money? There’s nowhere else to spend all these fines, taxes, investment returns and turnovers why not pump more money into aiding those who are really in need? There are people earning a measly amount, some of them are just plain lazy to work but what about those who can’t work due to permanent disability? These are the people who really need help. Not the middle income who constantly tries to live like high income earners and complain when they can’t afford non essentials. Of course there are still those middle income earners who can’t cope with paying for essentials and a house, but after all; besides the fact that we have extremely wealthy governors, don’t you agree that we are kinda well-off considering that you are able to read this article online right now on your phone or computer?

  24. MingCheng LaughhOnly

    i think rather then saying “i can’t possibly afford it/My children generation can’t possibly afford it”
    We should work on “how can i afford it/How can my children generation afford it”.

    Don’t worry roy it doesn’t mean i’m against you, i’m with you. your guts at speaking up for our cpf money is really heartwarming. but we all are born champions. and i believe if you really want at least a moderate life maybe you should workout something else.

    You are saying about wages. but from what i learn from econs
    Income earns you wages
    land earns you rent (can take away this, too damn expensive also and it’s not urs also)
    capital earns you interest
    entrepreneurship earns you profit

    saving money is just stupid, we never know when will a inflation strike and nowadays currency is not being backed by gold anymore. so i think instead of targeting “wages” maybe it’s our education that’s stopping us from earning alot.

    “higher wages earns you higher taxes” in the end it will still be the government earning. (i know this is out of topic just saying)

    *to all haters that hates my comment, i’m sorry if i offended anyone, but in case you all think im a rich kid, nope i’m not i’m born poor and right now i’m still studying.i realize that it’s easier for me to change myself then changing people.

    “You cannot bring about prosperity by discouraging thrift
    You cannot strengthen the weak by weakening the strong
    You cannot help little men by tearing down big men
    You cannot lift the wage earner by pulling down the wage payer
    You cannot help the poor by destroying the rich
    You cannot establish sound security on borrowed money
    You cannot further the brotherhood of man by inciting class hatred
    You cannot keep out of trouble by spending more than you earn
    You cannot build character and courage by destroying men’s initiative and independence
    And you cannot help men permanently by doing for them what they can and should do for themselves”

    “Everyone wants to live at the expense of the state.
    They forget that the state lives at the expense of everyone”

    -baisitat-

    “Governments traditionally do make a financial mess. They always run out of other people’s money. it’s quite a characteristic of them.”

    -British Prime Minister Margaret Thatcher-

    Chill alright. and roy jiayou!

    Ming Cheng

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