(Please note that this is a five-page article.)
Dear Singaporeans, I have finally uncovered the sinister PAP plot to cut Singaporeans down. Please read this. This is the most single most important piece that I have ever written about Singapore. After you read this, all you need to know about Singapore and the PAP’s whole entrapment plan to cut Singaporeans down will all be revealed and make sense finally.
For a long time, Singaporeans have felt that we are not able to earn and save enough and life doesn’t seem to get better. Today, I have finally put together all the information and pieced together the whole picture of the PAP’s ploy.
If you feel that your life isn’t getting better, it’s not an accident at all. The PAP has planned for it all this while.
Last week, I had shared with you how the PAP has devised the deceptive CPF-HDB dirty scheme to siphon off your retirement funds so that you would never be able to save and retire.
Today, let me put everything together for you and let you see the complete picture. Today, let me show you when it all started and when they had planned to stab you in the back since 30 years ago.
Have you read the book 1984? Well, welcome to the real 1984.
(If you would like to jump straight into finding out what the Wage-CPF-HDB Trinity is, you can jump right into Page 3. However, you would most probably come back to Page 1 as in Page 1, it will be revealed to you the points at which the PAP concocted this trinity.)
The Old PAP Used To Care For Singaporeans
Before we start, do you know that things didn’t always used to be so bad under the PAP. Well, at least the original PAP wasn’t bad – the current ones are shady-artists under the guise of the PAP brand but who bear no resemblance to the old PAP guards whatsoever.
In fact, under the first generation PAP politicians, Goh Keng Swee, S. Rajartnam, Toh Chin Chye (and Ong Teng Cheong), things only got better and better.
Under them, Singaporeans’ wages grew under their wise leadership. The wage share of Singaporeans grew. The wage share is the proportion of GDP that goes into wages (instead of to profits). As Singapore grew more prosperous in the 1970s and 1980s, Singaporeans shared more in the wealth that we had helped to grow.
From 1972 to 1985, the wage share in Singapore increased from about 36% to about 48%, or by almost 1% every year. The wage share then fell after the 1985 recession to 42% but climbed back up 45.4% in 1992 (Chart 1). That was the last of the good times. By 1997, the wage share had dropped to 43%. Since then, according to the PAP, the wage share has dropped to around only 40%. This means that Singaporeans are now earning lower wages and companies are earning higher profits.
Not only that, under the then-PAP, the CPF contribution rates grew as well – from 10% in 1955 to 50% in 1985 before it was reduced to 36% in 1986, after the 1985 recession (Chart 2).
However, more importantly, even as the CPF contribution rates grew, the interest earned by the CPF also grew as well. Under the stewardship of the initial PAP politicians, the interest rates grew from 2.5% in 1955 to 6.5% in 1986 – the highest ever interest rates that Singaporean had even gotten (Chart 3). Today, we receive a miserly 2.5% to 4%. The interest rate of 2.5% today is at an all-time low – as low as what Singaporeans had received in 1955.
Under the old PAP, income inequality had also reduced. Inequality actually dropped to its lowest in Singapore in 1979. The Gini coefficient fell to an all-time low of 0.41 – still a high figure and a high level of inequality, not something you want to shout about but it is still the lowest ever on record since independence from the British and Singapore was a fairer place then compared to today.
Also, the share of income that went to the richest 10% in Singapore was maintained at around 30% until 1984. (Chart 5). Then, Singaporeans still had a relatively more equal livelihood. The wealth distribution in Singapore was a lot more equal and the poor and middle-income in Singapore were also better off. But since then, the rich has only gotten richer and richer and the poor, even poorer.
Under the wise stewardship of the first PAP leaders who guided Singapore into an era of unprecedented growth and prosperity, all the people of Singapore grew together with the country and shared in the success of our country.
Our people and Singaporeans were proud to be who we were and we were learning to be a (truly) kinder and more gracious people, who were on our way towards achieving a (truly) First World standard of living.
But everything changed right after.
The young guns who took over the PAP today are wild horses who first tore inequality through the roof, then fumbled along their way to create the mess that Singapore is now in today.
So much so that Forbes had to pen an honest article to say that, “The first step for Singapore’s reinvention lies with recognizing the seriousness of its challenges. The policies of the past may have worked impressively, but may not be as appropriate in the future. As my old Japanese sensei Jiro Tokuyama once noted: the hardest thing to do is how to unlearn the secrets of your past success. The ingredients in the cocktail that is Singapore need to be tweaked for a new era.”
But of course, all these fell on deaf ears. Why? Because the new PAP’s agenda had been all along to grow at all costs and to grow Singapore to become a more and more unequal place, so that they can earn from Singaporeans and siphoned off our hard-earned money from us, into their own pockets.
Last week, I had shown you exactly how they have done that with your CPF and HDB.
Today, you will finally see how the PAP is undercutting you via the Wage-CPF-HDB Trinity. Today, you will finally see for yourself how the PAP had stabbed you in the back and when they had embarked on their corrupted plans.
To begin with the story, let’s take a look at your wages – the first trinity.
Singaporeans’ Wages Fell Over The Past 30 Years
Last year, the PAP took great pains to explain to Singaporeans that our wages have grown. They shared that the wage share of Singaporeans has grown over the past 3 decades.
However, when you compare Singapore’s wage share with that of the other high-income countries, you would see that a 40% wage share is not only pathetic, it’s seriously low. In the other high-income countries, the wage share averages at 55% and can be as high as 60% (Chart 7).
Singapore’s wage share of 40% means that Singaporeans are losing as much as one-third, or 33% of what we should actually be paid (Chart 8).
Last month, I had explained that low-income Singaporeans may be losing as much as 75% of our wages and the average Singaporeans might be losing half, or 50% of our wages! Instead of $800, a low-income earner should rightfully be earning more than $3,000 and for the median income earner, instead of earning $3,000, we should be earning at least $6,000 (Chart 9). But why is this not happening?
You see, this is all because the PAP has very conveniently chose not to mention something. The PAP had only chosen to mention that “in the 1980s, the wage share averaged at 41.8 per cent”.
But what they had very conveniently chosen not to state is that from Singapore’s independence from the British all the way until 1985, the wage share actually grew from 35% to 48%. As Singapore got richer, so did Singaporeans.
In fact, I do not even know where the PAP had gotten the 41.8% in the 1980s figure from! In the 1980s, the wage share grew from almost 40% in 1980 to 48% in 1984, then declined to about 42% in 1988 after the recession and then grew again to 45% in 1990. In fact, instead of 41.8%, the wage share in the 1980s should actually average closer to 43% (Chart 10)!
Is the PAP pulling a fast one on Singaporeans? Why does the PAP want to tell Singaporeans that the wage share is 41.8% when it was at 43% in the 1980s? Now, in real wage terms, this is very significant.
Even as the PAP had claimed that the wage share in the 1990s was only 41.9%, it actually grew to 45.4% in 1992 and even as it dropped, it was at 43% in 1997. So, where did the PAP get 41.9% from? Wage share in the 1990s might be as high as 43% (Chart 11)!
Is the PAP pulling the wool over our eyes? What this means is that the truth would have been that wage share had fell from 43% in the 1980s to 43% in the 1990s to 42% today! It has not actually grown, as what the PAP had claimed!
Actually, what’s worse is something happened in 1994. In 1994, the PAP drove the wage share of Singaporeans down to nearly 40%, or the lowest ever since the early 1980s (Chart 13).
If that’s not already bad enough, in 2004, the PAP drove the wage share down even further to its lowest ever since to 40% and then even below 40% in 2007 (Chart 14). Singapore had never seen such a low wage share since the early 1980s.
But why did the PAP drive down the wage share of Singaporeans? In both 1994 and 2004, there was no recession and no reason for the PAP to do so. So why did they? Take note of these two years – 1994 and 2004. You will see them frequently throughout this article.
As you read on today, you will know why this important. Why does the PAP want to pretend to Singaporeans that the wage share in Singapore has always been at around 40%? Why does the PAP not want Singaporeans to know the truth that at one point, the wages of Singaporeans were growing and higher?
If wage share had kept pace at the rate it did, the wage share in Singapore could be as high as 57% today (Chart 15).
In real terms, what this means is that a low-wage worker in Singapore should be earning $3,000 today instead of $800 and for a median wage earner, instead of $3,000, he/she should be earning $6,000 today (Chart 16).
Then the question is, is the PAP keeping the wage share in Singapore today artificially low? And if so, why does the PAP want to keep it low?
The answer can actually be found in this – the income share that goes to the richest in Singapore.
The Richest In Singapore Grew Richer And Richer Over The Past 20 Years
As I had written before, the share of income that went to the richest 10% in Singapore reached an all-time low of 30.18% in 1995 before exploding like never before. The share of income that went to the rich exploded from 30% in 1995 to 42% in 2011 (and possibly higher today) (Chart 17).
And for the richest 5%, they got rich even faster – the share of income exploded from 22% from 1995 to 31% 2011 (Chart 18).
Never before has Singapore been so unequal and never before has the rich in Singapore been so rich and the rest of Singaporeans so poor.
And as I had also written before, when inequality increases, the share of income that goes to the rich would then increases in the following year (Chart 19).
What this means is that if the rich started getting richer and richer from 1995 onwards, this means that the inequality in Singapore actually has its roots in 1994. It was in 1994 that the rich started siphoning off money for themselves.
But do you know what else happened in 1984? Something even more sinister. They didn’t even bother to hide their greed.
In 1994, the PAP decided to increase the salaries of its ministers. It was in 1994 that the PAP decided to peg the salaries of the ministers to “two-thirds of the average of the top 24 people in 6 professions”. It was in 1994 that they decided to pay themselves the highest salaries in the world, and million-dollar salaries (Chart 20).
It was in 1994 that everything changed, that they made the wage share that went to Singaporeans drop and they started taking more and more money away from themselves to pay themselves.
Remember this year – 1994.
But we are only halfway through the story.
The PAP Forced Singaporeans To Earn Low CPF Interest Rates
Now, let’s take a look at the second trinity – the CPF.
As I had mentioned, from 1955 to 1985, the CPF contribution rate increased from a low of 10% in 1955 to the highest ever at 50%. However, this was all fine since the interest earned by the CPF also increased from a low of 2.5% to the highest ever at 6.5%. Singaporeans had to sacrifice a larger and larger proportion of our wages but we were also earning higher and higher returns on our CPF, so our retirement funds were growing (Chart 21).
Even after 1985, things were still not as bad. The CPF contribution rate fell to 35% in 1986 after the recession. But in 1994 (1994 again), the PAP then pushed the CPF contribution rate all the way up to its next peak of 40% (Chart 22).
In 1994, the PAP pushed the CPF contribution rates to a new high and forced us to sacrifice a massive chunk of our wages.
But more importantly, look at the interest rates. In the 1970s and early 1980s, the interest rates grew in tandem with the increase in the CPF contribution rates. Singaporeans were paying more and more, but we were also earning more and more interest returns.
But from 1986, it was a completely different story. The CPF interest rates fell to 3.1% in 1989 and then increased. But it then fell to its lowest at 2.5%, but in which year? You guessed it – 1994 (Chart 23).
In 1994, the PAP pushed the CPF contribution rates up to a new high at 40% and pushed the interest rates to a new low in 1984 (Chart 24). What this means is that the PAP was already forcing Singaporeans to give up the highest proportion of our wages into the CPF in the world and was giving us possibly the lowest returns in the world as well.
1994 – are you seeing the trend?
The interest rates did go up a bit to between 4.41% and 5.91% in 1999 but that was because they had to decrease the CPF contribution rates to 30% after the recession. In 2000, they pushed up the CPF contribution rates again to 32%, but as they did that, they also pushed interest rates down to the lowest ever – between 2.5% and 4%, and it has stayed at this harshly low level ever since.
The 2.5% is the lowest ever interest rates that Singaporeans are forced to accept since 1963.
Not only that, this year, they pushed the CPF contribution rate to an all-time high since 1999 – at 37% (Chart 25).
So, today, Singaporeans are forced to sacrifice the largest chunk of our wages into CPF (Chart 26).
The PAP also pays us the lowest interest rates on the CPF (Chart 27).
But then, the question is – why is the PAP forcing Singaporeans to pay so much out of our wages and yet give us such pathetic returns?
To recap, in 1994, the PAP started to push down the wages of Singaporeans, started to siphon our wages away for their own wealth as they started getting richer and richer, forced us to pay more out of our wages into CPF and gave us the lowest returns ever, thus depleting the value of our retirement funds.