The Singapore General Election will be held on 11 September 2015.
Has the current ruling party, the People’s Action Party (PAP), done its job or has it hurt Singaporeans instead?
Over the next two weeks, I will be compiling the past articles that I have written into the different thematic areas, so that you can see for yourselves if the PAP has helped Singaporeans or if it has actually make lives more difficult for Singaporeans.
In today’s article, the focus is on INEQUALITY.
You can click on the red headers below to read more of each of the articles.
Last month, the National University of Singapore’s (NUS) Social Work Department had released “a new study has shown that the working poor in Singapore are not getting enough pay to make ends meet“. The ““working poor” is defined as someone earning less than half of the average monthly income of a Singaporean, which now stands at S$3,000.” As such, the “working poor” would be someone who earns less than S$1,500 every month.
According to the CPF Annual Report in 2011, where the distribution of the monthly wages of Singaporeans were last available, 458,257 Singaporeans were earning less than S$1,500 every month. This represents 26% of the Singaporean and PR population.
Does this mean that our poverty line now stands at 26%? This echoes what Jacqueline Loh had previously determined as the poverty line.
If you compare the poverty rate of 26% with other high-income developed countries, the disparity will be even more shocking.
In fact, Singapore’s poverty rate of 26% is as bad other poor countries, and would be even comparable to Cambodia, and worse than Philippines and Pakistan, some of the poorest countries in the world.
And if you look at the total poverty rate of the high-income countries of 11%, Singapore’s 26% becomes completely out of proportion. We have a poverty rate that is more than 2 times higher than the average of the high-income countries!
I looked at the statistics from 2002 (the earliest that comparable data can be found). In 2002, the median income is S$2,083, which means that the poverty line was $1,000 in 2002.
In 2002, there was 16% of Singaporeans who earned below $1,000. As such, you can see that the poverty has grown from 16% in 2002 to 26% in 2011.
From 2002 to 2011, the poverty rate increased by 1 percentage point, on average every year. Fast forward to 2013, does it mean that 28% of Singaporeans are living in poverty today?
So, all this time, the PAP government refuses to implement minimum wage. It refuses to define a poverty line. And the PAP government refuses to reduce income inequality.
And so, the PAP government spends the lowest government spending, as compared to the other developed countries. The PAP government simply refuses to help the poor.
All this time, the PAP government refuses to increase wages. They refuse to increase the government’s expenditure on health. And it refuses to increase its public spending on the poor.
Yet, the PAP government can see it fit to pay themselves the highest salaries in the world. How the PAP government can lead itself to believe that by already spending the lowest public spending among the developed countries that the country can actually fall into debt is beyond any logical comprehension. If Singapore will fall into debt, it would be because we are paying too much to sustain the livelihoods of the PAP politicians. By some estimates, Singapore is paying $40 million to sustain the salaries of the PAP politicians every year. Will this money be spent more wisely helping the poor? I think it’s an indefinite yes.
Plainly put, the poor in Singapore are not poor not because they are not willing to do better. The poor are poor because the PAP government makes them poor. It is the PAP government that pays them low wages, that makes them pay the largest proportion of their wages into CPF – larger than the higher-income earners – and it is the PAP government that gives them low returns into their CPF. Yet, it is the PAP government that increases prices so that Singaporeans have to pay higher and higher prices out-of-pocket. If Singaporeans are poor, it is because the PAP makes us poor.
Yet, the PAP won’t do what is right.
What is worse is that the income inequality situation is driven by how the richest in Singapore pay themselves the highest salaries among the developed countries and one of the highest in the world. It is also exacerbated by how the PAP also pegs their own salaries to the richest in Singapore.
Essentially, the PAP wanted to increase their own salaries but did not want to increase the social benefits for Singaporeans.
But not only that, when PAP increased their own salaries, income inequality also shot up in the same year.
The government has been driving down the Gini coefficient from 2008 to 2010 to 2013! In which country do you see the income inequality suddenly become lower and lower in each new report that the government puts out?
In the 2013 Gini coefficient, the line is a lot flatter than the lines in 2008 and 2010. Suddenly, it looks like income inequality has never grown in Singapore before!
It is thus highly worrying that the government deems fit to adjust the statistics as and when they deem fit, without the relevant or corresponding explanation as to how this is done.
It is worrying because then – would we be able to have a good gauge as to how people are truly feeling in Singapore? For example, if indeed, the high inequality in Singapore has resulted in a low intergenerational social mobility, a responsible government would step in to mitigate this.
However, for the Singapore government, instead of stepping in to mitigate, has their solution been to simply tweak the statistics? Make the statistics look good, and people will naturally feel better as well.
Do you feel better?
So, how can the government be so frivolous in its definition of income inequality and how can the computation change year after year, and suddenly become lower and lower?
Today, Singapore has the highest income inequality among the developed countries. The PAP also spends the least on social protection, healthcare, education and pension for Singaporeans among the developed countries, and one of the lowest in the world.
In fact, because the PAP spends so little but makes low- and middle-income Singaporeans earn the lowest wages among the highest-income countries, Singapore also has the highest rich-poor gap.
On top of that, every time the PAP increased its own salaries in 1984, 1994, 2000 and 2007, income inequality increased as well. So did the income share that went to the rich. The share of income that went to the richest 10% in Singapore increased from 30% in 1995 to 42% in 2011.
The PAP keeps increasing its own salaries that today, it earns the highest salaries in the world. Meanwhile, Singaporeans earn one of the lowest wages among the highest-income countries and have the lowest purchasing power.
And because Singapore has become the most expensive country in the world, where Singaporeans have to pay the most out of our pockets for healthcare and education, have to pay for the most expensive public housing in the world and have one of the least adequate pension funds in the world, 30% of Singaporeans today live in poverty.
The income inequality and social problems in Singapore are all created by the PAP. The PAP no longer cares about Singaporeans and have allowed Singaporeans to languish in our own country.
The solutions are out there. The poor do not need to be poor – the poor are made poor because of the uneven wage distribution pattern, largely attributed to the executives wanting to pay themselves high salaries.
Also, bringing more billionaires or millionaires will not help create jobs. Increasing the purchasing power of the masses is what will.
To correct the deeper causes of poverty and inequality, a very clear solution is to pay executives on the top much lower salaries and the poor much higher ones. Reich had also called for (higher) minimum wage.
The current wage imbalance has also been shown to be detrimental to the economy in the long term. Only by decisive action and wage correction towards wage parity will we be able to move Singapore’s economy in the right direction.