Category: Jobs Wages & Employment

Can Low Wage Workers Earn Higher Wages In Singapore?

The short answer is, yes. But how?

In this article, we will look at the workers’ wages vs the foreign worker levies.

In the chart below, you can see the wages of selected low-wage jobs in Singapore, based on the latest available data – low-wage earners earn below $1,500 in Singapore. Cleaners and construction workers earn about $800 to $850.

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Chart 1: Ministry of Manpower Report on Wages in Singapore 2011

If companies would like to hire foreigners for these job positions, they would need to pay an additional foreign worker levy for each worker.

If we add on the top-tier levy for each of these job positions, Chart 2 shows you how much an employer would have to pay for each foreign worker in 2013.

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Chart 2: Ministry of Manpower Report on Wages in Singapore 2011Overview of Foreign Worker Levy Changes Till Jul 2015

 

You can see that for a cleaner, the employer would have to pay a total of $1,415 for the worker and not the actual wage of $800. This means that of the total cost of the foreign worker, 42% of the cost actually goes to the government. Similarly, for a construction worker, the employer would actually pay 47% of the cost of the foreign worker to the government.

The other way to look at it is this – for a cleaner, the employer has to pay 74% of the wages to the government for the foreign worker levy. For the construction worker, the employer has to pay 88% of the wages to the government for the foreign worker levy.

So, the government might say that “employers are required to pay Foreign Worker Levy for their Work Permit holders”, as a “pricing mechanism to regulate the number of foreign manpower in Singapore”.

But the question is – is this a sound policy?

According to the Ministry of Manpower, the wages of low-wage Singaporean workers have remained stagnant over the past few years (Chart 3).

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Chart 3: Ministry of Manpower Report on Wages in Singapore 2007Ministry of Manpower Report on Wages in Singapore 2008Ministry of Manpower Report on Wages in Singapore 2009Ministry of Manpower Report on Wages in Singapore 2010Ministry of Manpower Report on Wages in Singapore 2011

Thus you can see that over the past few years, because it is cheaper to hire foreign workers, companies would hire foreign workers at low wages and wages have thus been kept at a depressed low level. As such, Singaporeans have to also accept low wages in order to have a job.

And if you look at the proportion of Singaporeans who earn below $1,500, there are 26% who are in low-wage jobs (Chart 4), which is a significant amount. Are the wages of these Singaporeans depressed because of the low-wage situation?

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Chart 4: CPF Annual Report 2011

What does the foreign worker levy have to do with the low wages of Singaporeans, you say?

You see – the foreign worker levy has been increasing over the past few years.

In fact, in 2015, the foreign worker levy would have increased to $1,050 for a construction worker.

Thus in Chart 5, you can see that in 2015, for a cleaner, the cost of a cleaner is actually $1,615 and not the $800 that would be paid to the worker. Of the cost, 50% would actually go to the government. For a construction worker, 55% of the cost would actually go to the government!

This means that the employer has to pay 98% of the wage of a cleaner and 124% of the wage of a construction worker to the government as the foreign worker levy. Why is it that the workers are doing the job but the government takes in the chunk of the workers’ wages for doing nothing?

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Chart 5: Ministry of Manpower Report on Wages in Singapore 2011Overview of Foreign Worker Levy Changes Till Jul 2015

So, why is this worrying? For each worker, instead of the worker benefitting from higher wages over the years for the work that he/she is actually doing, it is the government which is actually benefitting from increasing revenue from the levies by doing nothing and waiting for the money to come in.

Maybe the charts below will make things clearer for you.

If you look at the foreign levy for a cleaner, the levy has increased from $450 to $800 – or 78% (Chart 6).

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Chart 6: Schedule of Foreign Worker Levy Changes Until July 2013Overview of Foreign Worker Levy Changes Till Jul 2015

But when you look at the wages of a cleaner, wages have remained stagnant – or with an overall increase of 7% (Chart 7).

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Chart 7: Ministry of Manpower Report on Wages in Singapore 2007Ministry of Manpower Report on Wages in Singapore 2008Ministry of Manpower Report on Wages in Singapore 2009Ministry of Manpower Report on Wages in Singapore 2010Ministry of Manpower Report on Wages in Singapore 2011

And if you look at the foreign worker levy for a construction worker, it has increased from $310 to $1,050, or 239% (Chart 8).

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Chart 8: Schedule of Foreign Worker Levy Changes Until July 2013Overview of Foreign Worker Levy Changes Till Jul 2015

But for the wages of a construction worker, it has also remained stagnant – or with an overall increase of 6% (Chart 9).

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Chart 9: Ministry of Manpower Report on Wages in Singapore 2007Ministry of Manpower Report on Wages in Singapore 2008Ministry of Manpower Report on Wages in Singapore 2009Ministry of Manpower Report on Wages in Singapore 2010Ministry of Manpower Report on Wages in Singapore 2011

Do you see the discrepancy? The foreign worker levy for a cleaner went up by 78% but the wages of a cleaner only went up by 7%. For a construction worker, the foreign worker levy went up for 239% but wages only went up by 6%.

And do you know how much the government is collecting from the levies? According to the Ministry of Manpower, “the total foreign worker levies collected were S$2.5 billion for the Financial Year 2011 and S$1.9 billion for the Financial Year 2010“. So, the government is seeing higher and higher revenues from higher and higher foreign worker levies, while the workers see declining real wages.

So, the government might say that the foreign worker levies is “a pricing mechanism to regulate the number of foreign manpower in Singapore”. But, has the foreign worker levies really helped to “regulate the number of foreign workers in Singapore”?

Not really.

In fact, the number of workers on S Pass has kept increasing (Chart 10).

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Chart 10: Ministry of Manpower Foreign Workforce Numbers

The number of construction workers on work permits has also kept increasing (Chart 11).

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Chart 11: Ministry of Manpower Foreign Workforce Numbers

Not only that, the Singapore Population White Paper projects that the increase in the number of foreign workers will also go unabated (Chart 12).

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Chart 12: Ministry of Manpower Foreign Workforce Numbers, Population White Paper

As such, it is clear that the foreign worker levies do not actually “regulate the number of foreign workers in Singapore”. What is clear is that the foreign worker levies do bring in more and more revenue for the government – from $1.9 billion in 2010 to $2.5 billion in 2011 – and to more than $3 billion now?

What is also clear is that while the government is collecting more revenue from employers, the wages that employers pay to workers have remained stagnant – at around $800 for cleaners and $850 for construction workers.

The question you have to ask is this – why has the government been so resistant towards implementing a minimum wage but has not at all been hesitant to increase the foreign worker levies on companies? If the explanation given to not implementing a minimum wage is that this will add to the cost of companies, then why has the government increased levies by up to 240%? Doesn’t this still add to the cost of the companies anyway?

Now, imagine this – instead of the government asking companies to pay foreign worker levies, these foreign worker levies are given to the workers as wages.

Immediately, you will see that in 2015, instead of workers earning $815, they will earn $1,615. For construction workers, instead of $850, they will earn $1,900. For waiters, instead of $1,300, their wage will cross the $2,000 mark (Chart 13).

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Chart 13: Ministry of Manpower Report on Wages in Singapore 2011Overview of Foreign Worker Levy Changes Till Jul 2015

For the lowest wage workers, they will immediately see a doubling of their wages!

How will this benefit Singaporeans? When foreign workers are paid higher wages, Singaporeans will not be forced to accept lower wages as well. Singaporeans will be able to receive higher wages. So a Singaporean who works as a cleaner will be able to earn $1,615, a waiter will be able to earn $1,300 and a bus driver would be able to receive a basic salary of $2,300 – all the low wages workers would be able to receive a wage of above $1,500! And this is done without any additional cost – we are simply transferring what is paid to the government back to the worker, who should be rightfully receiving his/her wage. Will we be able to reduce the proportion of Singaporeans earning below $1,500 from the 26% now to less than 10%, or even less than 5%? It is quite likely.

This is definitely better than the “progressive wage model” propounded by Minister without portfolio Lim Swee Say. While as a cleaner under the progressive wage model, you would need to be promoted before you can earn a paltry increase of $100, but if the foreign worker levies are returned to workers as wages, they would immediately see an increase of $800, without the excuse of a promotion.

So, when the government “explains” that they cannot implement a minimum wage because it will suddenly increase costs, is this a logical reasoning or is it really an “excuse”? Certainly, if the government has no qualms increasing the foreign levies by up to 240%, cost isn’t a factor that they are concerned for the companies, is it? If the foreign worker levies have no intended effect of reducing foreign worker numbers, but has the very clear effect of increasing government revenue, then quite clearly, increasing government revenue seems to be the more overt intent of the foreign worker levies than to curb foreign worker numbers – which the government clearly has no want to do so anyway, as illustrated by the population white paper.

By artificially imposing the foreign worker levies as a “pricing mechanism”, hasn’t the PAP government intervened in the free market dynamics and upset demand-supply economics? If the government has allowed for demand and supply to determine wages, instead of artificially imposing a “pricing mechanism” in the form of foreign worker levies, would demand-supply have been better able to determine the equilibrium wage to be paid in each job sector, and push wages upwards to benefit workers?

In imposing the foreign worker levies and artificially depressing the wages of workers, while increasing the levies and the revenues collected by the government, has the government acted to “rob” the wages that should have rightfully gone to the workers? Is such direct government intervention a key reason why the wages of Singaporeans have remained stagnant, and why the real wages have in fact declined?

It would seem quite clear at this point that if the government doesn’t seem to be too concerned about the cost constraints of companies, that implementing a minimum wage isn’t something too difficult for them to do. The question then isn’t about whether there are practical difficulties to do so, but whether the PAP government has the political will to do so and to help Singaporeans, or whether the government is more keen to restructure the policies to increase revenue to their own coffers.

I think the fact that the PAP government has allowed wages to remain stagnant while increasing foreign worker levies (and government revenue) even to amounts over and above what would be paid to the worker is a very clear indicator as to where their priority lies. Perhaps the PAP government has forgotten this – they can continue to treat workers as singular digits to be used and discarded, but don’t forget who is doing the work for you. Don’t forget who is helping you build and clean the buildings and train lines you earn the money from. Without the workers, you will have no money to earn. It would bode well for the PAP to learn to respect those who have helped them, and not cast them aside once they are no longer of use to the PAP.

*****

Empowering Singaporeans had just organised our first workshop – Towards a Better Education System – last week. We will be holding the next workshop to discuss about the jobs, wages and employment situation in early 2014. 

Follow us on the Empowering Singaporeans Facebook page or email us at empoweringsingaporeans@gmail.com for more updates.

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Riots and Wages in Singapore: Part 3

By Roy Ngerng and Leong Sze Hian

In the last article, we wrote about the huge wage disparity in Singapore between the best paid politicians in the world among the PAP politicians and how Singaporeans and the workers in Singapore are paid the lowest wages among the high-income countries.

In this article, we will continue to illustrate to you how wide the wage gap in Singapore really is.

  • Singapore has the largest wage disparity among workers of different educational levels among all the high-income countries.
  • The wages of workers with polytechnic diploma or lower would remain stagnant or drop over time, as they age.
  • The poorest 20% in Singapore have only 5% of the share of all income while the richest 20% have 49% of the share of all income (in 1998) – the largest disparity among the high-income countries.

(A) Singapore has the largest wage disparity among workers of different educational levels among all the high-income countries

Do you know that when compared to the other high-income countries, the wage difference between a university degree graduate and someone who has a below upper secondary education is the highest in Singapore (Chart 1). Whereas a university degree graduate in Singapore would earn 3.7 times higher than some with a below upper secondary school education, this would be only 1.3 times in Italy.

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Chart 1: OECD Indicators Education at a Glance 2013

Thus there is huge pay disparity between Singaporeans of different educational qualifications, which is concerning because such an indefinite policy measure would only result in entrenched divisions among the people in Singapore and create artificial social divisions.

(B) The wages of workers with polytechnic diploma or lower would remain stagnant or drop over time, as they age

However, the policy discrimination isn’t only reflected in educational discrimination, but in age discrimination as well.

Over the lifetime of a Singaporean who has a polytechnic diploma, they can expect their pay to remain unchanged or even decrease (Chart 2).

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Chart 2: Report on Wages in Singapore, 2011

The scenario for someone without a polytechnic diploma is even bleaker – their pay will indefinitely decline as they grow older (Chart 3).

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Chart 3: Report on Wages in Singapore, 2011

Thus, if only 30% of Singaporeans are able to enter local public universities, for the rest of the 70% of Singaporeans who earn $2,000 or less, they would only be able to earn barely the minimum needed to scrape by in Singapore, and might never be able to retire.

And because only the pay of university degree graduates are likely to increase over time, the wage disparity over time thus widens further (Chart 4). A university degree graduate in Singapore would earn 6.2 times higher than someone with a below upper secondary school education, whereas this is only 1.6 times in Denmark.

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 Chart 4: OECD Indicators Education at a Glance 2013

(C) The poorest 20% in Singapore have only 5% of the share of all income while the richest 20% have 49% of the share of all income (in 1998)

The next set of statistics will shock you. 

Thus because there is such huge wage differences in Singapore, for the poorest 20% of Singaporeans, they are only able to have 5% of the share of all income (Chart 5), which is the lowest among the high-income countries – the poor in Singapore are worst off.

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Chart 5: The World Bank World Development Indicators: Distribution of income or consumption

In contrast, the richest 20% would take in a 49% share of all wealth in Singapore – nearly half of all the income, and this is the highest when compared with the other high-income countries (Chart 6).

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Chart 6: The World Bank World Development Indicators: Distribution of income or consumption

Not only that, the second 20% poorest have only a 9% share of all income – the lowest among all the high-income countries as well, and the third 20% in the middle-income group have only a 15% share of all income – also the lowest!

In short, the poorest 60% in Singapore have only 29% of the wealth – the lowest of all the high-income countries (Chart 7)! Can you imagine that – 60% of the population in Singapore and they don’t even have one-third of the total income in Singapore!

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Chart 7: The World Bank World Development Indicators: Distribution of income or consumption

The comparison from Charts 5 to 7 for Singapore’s statistic is from 1998, the last year where this data is publicly available.

However, since then, the income inequality in Singapore has risen dramatically – we are now the country among the high-income countries with the highest income inequality (Chart 8), and one of the highest in the world.

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Chart 8: OECD StatExtract Income Distribution and PovertyKey Household Income Trends, 2012

As such, in all likelihood, the poorest 20% would most likely have less than 5% of income while the richest 20% would most likely accumulate more than half of all the wealth by now.

Not surprising since we have the largest wage disparity among the high-income countries.

So, what does the Singapore prime minister actually mean when he said that, “if you are poor in Singapore, there’s no fun. But I think you are less badly off than if you were poor nearly anywhere else in the world,” or that, “poor people are not poor by any international standard“.

Quite contrary to what the Singapore prime minister had said, the poor in Singapore are much worse off than the poor in other high-income countries, and are poor by any international standards! The statistics fly in the face of what the prime minister had said! Is this complete bullocks?

But really, how did Singapore come to a stage where there is such a massive wage gap, and how did our people become the poorest among the high-income countries, even as much as Singapore is one of the richest countries in the world, by GDP per capita. Why does Singapore now have the 4th highest concentration of billionaires in the world, but also have the highest poverty rate among all the high-income countries, and even countries in the region?

How does the PAP government intend for Singaporeans to live adequately if they continue to pursue policies which depress the wages of Singaporeans and the workers in Singapore, whilst contributing the lowest returns to Singaporeans’ CPF, while forking out the least for the health spending for Singaporeans? How can the government continue to expect Singaporeans to pay for the second most expensive public universities in the world, while Singaporeans receive the lowest proportion of scholarships, while also accumulating debt at a very young age even before we start work, and where whence we start, are faced with one of the world’s highest cost of living and highest prices in the world, on marginal wages?

The PAP’s Policies Will Lead to the Downfall of Singapore

What’s more, where policies have created such distinct educational pathways where Singaporeans seemingly end up in fixed career paths in life, the wage divide that follows us for the rest of our lives, serves only to entrench the unevenness and inequality further. Coupled with stagnant and declining wages as one grows older and an estimated 28% of Singaporeans living in poverty, the plight of Singaporeans is in indeed in danger.

Minister for Law and Foreign Affairs K Shanmugam might ask, “what evidence is there … (to suggest) that these workers were deeply disaffected and that is why the riot took place.” He had also said that, “I’m not saying you can’t say it, but I would like to see some evidence to back up a fairly substantive statement like that. All I can see is assertions and the fact that you repeat the assertions doesn’t make it a fact.”

As it stands, Singaporeans and workers in Singapore are paid the lowest wages in the world and the poverty rate is the highest among the high-income countries and possibly the highest among countries even in the region. Thus it also does not help when we have ministers such as Minister for Social and Family Development Chan Chun Sing, who had said that it is not helpful to define a poverty line in Singapore because, “if we use a single poverty line to assess the family, we also risk a ‘cliff effect’, where those below the poverty line receive all forms of assistance, while other genuinely needy citizens outside the poverty line are excluded.

And on top of all of the above, the lives of lower-income Singaporeans may be further compromised by the Government, from a cashflow perspective – not spending a single cent on healthcare, CPF and HDB.

If it is not already apparent to the PAP government, the episodes and revelations over the past one year – the strike and riot, and calls to implement a minimum wage and to define a poverty line – are signs of the burgeoning needs of a populace who are already on the brink of social meltdown and if the PAP continues to ignore the screaming needs of the populace, such ignorance and strident denial will only serve to mark the end of the PAP’s demise in no uncertain terms.

Perhaps such is the evolution of power and societal change where time and again, history has shown, that if power is allowed to consume the will of individuals, that the only path to be ridden is one of downfall and then renewal, and Singapore does not seem to be immuned to the fate that has befallen all other political regimes and societies. A much needed breath of fresh air for the people of Singapore, it would seem, but only when the rot of power corrupted is overcome.

*****

Empowering Singaporeans had just organised our first workshop – Towards a Better Education System – last week. We will be holding the next workshop to discuss about the jobs, wages and employment situation in early 2014. 

Follow us on the Empowering Singaporeans Facebook page or email us at empoweringsingaporeans@gmail.com for more updates.

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Riots and Wages in Singapore: Part 2

By Roy Ngerng and Leong Sze Hian

Last Thursday, we wrote about the low wages that low-wage workers in Singapore receive and how this might be a main contributing factor which had triggered the strike and riot in Singapore’s recent history.

But this is only half the story. Today, we will reveal to you more about the wages and how massive the disparity is.

Do you know that not only do low-wage workers in Singapore earn the lowest wages among the Nordic countries, the median wage of Singaporean is also the lowest among the Nordic countries (Chart 1)?

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Chart 1: International Labour Organisation Data collection on wages and income

As discussed, Singapore’s per capita national income is similar to the Nordic countries. Singapore is also more expensive to live in than Denmark, Finland and Sweden. As such, the relatively low wages in Singapore would be an immense burden to Singaporeans.

But, what is more shocking is that even though Singaporeans earn the lowest wages among the Nordic countries (and the other high-income countries), the Singapore politicians actually earn the highest salaries in the world!

Already, you see that when compared to the Nordic countries, cleaners in Singapore earn 62% to 85% lower than the cleaners in the Nordic countries. Also, Singaporeans’ median wage is also 37% to 66% lower than that in the Nordic countries.

But when you compare the pay of Singapore’s prime minister to the other prime ministers in the Nordic countries, the Singapore prime minister earns the highest salary and not only that, but earns 527% to 749% more than them (Chart 2)!

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Chart 2: newinenglish.noWorld Economic JournalEthical Salaries for a Public Service Centred GovernmentSwedish Language Blog, White Paper on Ministerial Salaries

What’s more, if you look at the salary per capita paid to the prime ministers, Singaporeans pay between 1035% and 1435% more to the Singapore’s prime minister, than the citizens in the Nordic countries do (Chart 3).

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Chart 3: newinenglish.noWorld Economic JournalEthical Salaries for a Public Service Centred GovernmentSwedish Language BlogWhite Paper on Ministerial Salaries

Next, when you look at how much the Members of Parliament (MP) in each country are paid, the Singapore MPs are paid the highest salaries again (Chart 4).

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Chart 4: Business InsiderEcPoFi – Economics, Politics, FinanceWhite Paper on Ministerial Salaries

This thus explains why the government ministers earn 108 times more than the bottom earners in Singapore (Chart 5).

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Chart 5: Singapore News Alternative OPINION: Income Inequality in Singapore: Our Annual Peek (2013) – Ryan Ong

The Singapore prime minister had said that “ministerial pay … has to remain competitive” because, “Singapore has to maintain a high quality of government, otherwise we are going to go back down and we are going to be a mediocre country.

But what exactly might the Singapore prime minister mean about not becoming a “mediocre country”?

Singaporeans have been told repeatedly over the years that we need to pay our politicians high salaries to prevent corruption.

Since Singapore and the Nordic countries are and historically been ranked very highly in Transparency International’s index on corruption, Singapore has often been compared with them, and study trips have been made to study their economic and social system, we will now attempt to do a comparative analysis between Singapore and the Nordic countries.

In addition to salaries and corruption, the other dimension of comparison may arguably be the performance of Singapore vis-a-vis the Nordic countries.

Since so much has so often been trumpeted in the media about our world clase rankings in so many things, we will in the interest of brevity, just list some of Singapore’s poor rankings below:

Indeed, when we look at some international rankings, Singapore does perform admirably – Singapore is ranked 5th as least corrupt, 2nd most competitive and 8th most innovative. Does this suggest that exorbitant salaries are indeed necessary to not become a “mediocre country”?

But yet, when you look at the rankings of the Nordic countries, the Nordic countries perform just as admirably! The Nordic countries are among the 15 most competitive countries in the world, Sweden and Finland rank higher than Singapore in terms of innovation, and Denmark and Norway rank at 9th and 15th respectively. In fact, the Nordic countries are ranked the least corrupt in the world, and better than Singapore!

If the Nordic countries are able to achieve all these at only a small fraction of the cost of the Singapore politicians – at only 11% to 16% of what we pay to the PAP politicians, to be exact – then what does it say about the PAP politicians? Are they so inefficient? Are they that unproductive? Are they not able to achieve similar outcomes as the Nordic countries with low costs?

The Neglected Welfare of Singaporeans

But that’s where the similarities between Singapore and the Nordic countries end. As discussed, Singapore is more expensive to live in than Denmark, Finland and Sweden. Not only that, what’s worse, according to the Mercer’s 2012 Cost of Living Survey, Singapore is the 6th most expensive city out of 143 cities in the world, whereas the other cities in the Nordic countries are much cheaper to live in, at 18th for Oslo, Norway; 21st for Copenhagen, Denmark; 46th for Stockholm, Sweden and 65th for Helsinki, Finland – yet Singaporeans earn much lower wages while having to live in a much more costly city. Not only do Singaporeans earn the lowest wages among the high-income countries, we also work the longest hours in world. It is no wonder why Singapore is ranked as having the 2nd highest work stress in Asia, which has also resulted in Singapore having the lowest fertility in the world – out of 224 countries. Interestingly, we also have the 2nd lowest libido, as compared to over 40 countries.

Thus when surveys such as the Gallup rank Singaporeans as having the least positive emotions, most emotionless and least optimistic, where the Happy Planet Index ranks Singapore at 90th – most unhappy, and the World Happiness Report 2013 ranks singapore as the 126th (most unhappy) and 144th (most emotionless), it is clear why Singaporeans have become so repressed in our emotions. Indeed, the amount of trust among Singaporeans has so far diminished that Singaporeans are second least likely to help a stranger, out of 135 countries.

It is thus not a coincidence that Singaporeans feel so restrained – we are rated only partly free at 4 out of 7 for political rights and civil liberties (where 1 is most free) by Freedom House Freedom in the World 2013 Index, and 81st on The Economist Democracy Index 2012, and it does not help that our media is not free – we are ranked 149th out of 175 countries by the 2013 Reporters Without Borders Worldwide Press Freedom Index 2013, and 153rd by the Freedom House Freedom of the Press 2013 Index.

In comparison, the Nordic countries score much better in all these indicators, and not only that, but top of the class in most as well – they work one of the shortest hours in the world and have one of the highest fertility rates among the high-income countries. They are also one of the happiest and freest countries in the world. Yet, they continue to be one of the richest countries in the world, and with one of the most vibrant economies.

Indeed, why are Singaporeans forced to pay the PAP politicians such immensely-inflated wages for such lopsided and disastrous performance? For a nation where our people’s psychological well-being are so heavily compromised and where the social environment is increasingly being unsettled, can Singaporeans still put their trust in a government which knows how only to pay itself such high wages, but perform so poorly in so many indicators which are the true measure of the people’s welfare, and which have been so sorely neglected by the PAP government?

Does Singapore Need Cheaper, Better, Faster Politicians? 

Lim Swee Say had been a strident advocate for Cheaper, Better, Faster workers. Perhaps PAP should take a leave out of their own minister without portfolio, and also advocate to become Cheaper, Better, Faster politicians.

Indeed, the Singapore prime minister had said that, “what elected ministers are earning – representatives of the people, serving the people … (are) being paid out of the taxes of the people.” He had also said that, “others may be unhappy that the ministers decide their own salaries”. And the fact of the matter is this – if the PAP politicians are able to function based on the effectiveness and cost savings that the politicians in the Nordic countries are able to do so, we would be able to save about $10 million annually – tax payers’ monies which can go to more useful causes, such as to increase the wages of of low-wage Singaporeans, which are the lowest among the high-income countries.

The Singapore prime minister had also said that, “there are the concerns that highly paid political leaders would lose the ethos of caring for Singaporeans first as their main motivation and priority, and may lose touch with the problems of average families”. But when you look at the low wages of low-wage workers in Singapore, and of the average Singaporean, do you think the politicians are indeed out of touch? Has the excessively-high salaries got into their heads?

Indeed, when the Singapore prime minister had said, “if you have the wrong system of pay, you will have the wrong team,” Singaporeans are now asking the exact same question – has the “system of pay” created a “wrong team” in Singapore?

Have The PAP Politicians Met Their Performance Indicators? 

Under the white paper to review the ministerial salaries, it was proposed that “four socio-economic indicators” be used to determine the “National Bonus” to be paid out. Of the indicators, two of them pertain to the real median income growth rate and the real growth rate of the 20th percentile income.

And if you look at a report by the Lien Centre for Social Innovation and SMU School of Social Sciences, it found that from 1998 to 2010, “the real median incomes of employed residents in (the bottom 20 per cent of employed residents fell) by approximately 8 per cent.” Also, “workers’ real median wage growth was negative over the last 5 years or so“.

Indeed, this cannot be even more apparent when you look at the chart below – from 1998, you can see that the real median monthly income for the bottom 20% income earners has actually dropped from $809 to $749 in 2009.

Real median monthly income of resident employed, 1996 to 2009

Chart 6: The Straits Times

And if indeed the PAP politicians are supposed to ensure the growth of the real median income growth rate and the real growth rate of the 20th percentile income, then why are we paying them such overly-inflated wages for such unsatisfactory performance?

If the real wages of Singaporeans aren’t growing, should the wages of the PAP politicians be severely cut back down for their poor performance? Indeed, was it not the Singapore prime minister who had said that, “if a Minister is negligent or dishonest, then of course, he has to be sacked.” In not meeting two of the four performance indicators, has the PAP politicians been “negligent”?

Finally, could the problem be that ministerial pay is pegged to the “60% of the median income of top 1,000 Singapore Citizens income earners”? A look at Chart 6 would show that the real median monthly income of the top 20% earners have grown. The Lien Centre for Social Innovation and SMU School of Social Sciences had also reported that “incomes of those in the top 20 per cent (had) increased by 27 per cent” from 1998 to 2010.

Indeed, does it make any sense when there are 23% of Singaporeans who are earning below $1,500 and who have seen their real wages drop, when the PAP ministers and MPs belong to the top 5% of the earners in Singapore, and where the ministers would most probably belong to the top 1%? When commenters suggest that the ministerial pay should be instead pegged to the median income of the bottom 1,000 Singapore citizens income earners instead, do they have a logic that is more sensible?

The Cracks Are Finally Beginning To Show

The chronic problem of the low-wage situation in Singapore has drastic effects, as they are beginning to show in the strike, riot and protests held across the whole of this year. Such sentiments of discontent have been simmering among Singaporeans and workers in Singapore for some time now, and as many observers have rightfully pointed out, the lid might finally begin to blow off.

The Singapore prime minister has shown poor judgment when he had said that, “if you are poor in Singapore, there’s no fun. But I think you are less badly off than if you were poor nearly anywhere else in the world.” Such disconnection from the reality on the ground has been constantly portrayed by him, as when he had also said that, “poor people are not poor by any international standard“.

Such a belief cannot possibly be sensibly uttered by the head of Singapore’s government when the statistics show that Singapore would most probably have the highest poverty rate among the high-income countries and even among countries in the region.

The detachment that the PAP politicians have shown has only further alienated Singaporeans from them. Low wages, compounded by the colossal wage disparity between the rich and the poor have only further isolated the poor from believing in the government that they had voted in to protect them for.

For disenfranchised low-wage foreign workers who have no rights to representation or union protection, the effects of such underlying tensions are the first to blow. It would be wise to not take the issue lightly by attributing the problem to the over-consumption of alcohol or ghettoisation. Failure to understand the deeper reasons as to the strike and riot would be failure on the part of the government to understand the needs of the populace and anticipate the problems early on, so as to be able to responsibly and amicably resolve them.

*****

Empowering Singaporeans had just organised our first workshop – Towards a Better Education System – last week. We will be holding the next workshop to discuss about the jobs, wages and employment situation in early 2014. 

Follow us on the Empowering Singaporeans Facebook page or email us at empoweringsingaporeans@gmail.com for more updates.

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Foreign Workers Paid Only $2.25 an Hour!

By Han Hui Hui, Leong Sze Hian and Roy Ngerng

Yesterday, Minister for Foreign Affairs and Minister for Law K Shanmugam had visited a foreign workers’ dormitory in Yishun and had said that the foreign workers “have no complaints about working conditions, about salaries, about their employers”.

It was also reported that, “he also urged the foreign workers to voice out any other concerns with regards to their wages and living conditions”.

It was also reported that he had said that, “if the workers have any grievances or unhappiness, they have many avenues through which to seek help — for example, through their unions, the Manpower Ministry or the Migrant Workers Centre.”

Actually, it is perplexing why Shanmugam would form the conclusion that foreign workers “have no complaints about working conditions, about salaries, about their employers”. It is indeed curious because the non-governmental organisation, Transient Workers Count Too (TWC2) had actually been compiling stories of the ill-treatment and discrimination of foreign workers by their employers.

In a survey that was conducted by the Singapore Management University (SMU), it was found that, “65% of injured and salary-claim workers reported that they had been threatened by their employers with premature repatriation. Of working workers, 12% have been so threatened”. In another study conducted by TWC2, it was found that, “only 28 percent of injured workers have been offered accommodation by their employer (sometimes, MOM) post-injury”. In fact, in a study conducted by the Ministry of Manpower, it was found that, “slightly more than half of total costs (to recover from workplace injuries and ill-health actually) fall on workers themselves, when quantified into dollar terms”.

Which is why it is thoroughly perplexing why Shanmugam would not have known of these. Shamugam had also said that, “If there’s contrary evidence, we are happy to listen, because our task is not to deny evidence. In fact, we are happy to receive the evidence and deal with it … we are looking, searching (for evidence).” It is not known how many foreign workers Shanmugam had spoken to at the dormitories to come out with the conclusion that foreign workers “have no complaints about working conditions, about salaries, about their employers”, but the surveys that had been conducted to hundreds of foreign workers, which is undoubtedly more representative, says contrary. Thus we look forward to Shamugam “deal(ing) with” the evidence ” since their task is “not to deny evidence”.

Yesterday, we received a pay slip of a foreign worker. The job of the foreign worker is to be a welder and he is paid only $2.25 an hour. His monthly overall wage is only $500.13.

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In fact, all the other foreign workers also receive similar monthly wages, an average of $436.75 in a month.

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On top of the miserly wages, the workers would also have to pay a penalty fee of $200 if they lose or damage their work permit – which is almost half their monthly wage!

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According to the survey by the SMU, it was found that, “the threat of premature repatriation creates a lot of stress”. Also, “having uncleared debts incurred in agents fees also hung heavily over them”. From our understanding, the foreign workers who were being paid only $2.25 an hour had continued to work because of similar fears and had thus kept silent, in spite of the severely low wages and ill-treatment.

Shanmugam might have visited the dormitories to speak to the foreign workers but it is questionable if the foreign workers would have been willing to “voice out any … concerns” about these problems to him, especially under the careful watch of their employers. Indeed, according to the survey, up to 65% of workers have been threatened with repatriation and “such intimidatory behaviour by employers (apparently) seems very common”.

In fact, according to Jolovan Wham, “companies that blatantly flout our labour laws are often allowed to get away with it because (the Ministry of Manpower (MOM)’s) approach to labour disputes, especially those involving salary matters is to conciliate between the employer and the worker, and let the matter rest after it has concluded. Numerous workers have complained about how (the MOM) officers often conciliate against the standards established in our labour laws, and how some of (the) officers are either rude or indifferent to their plight.” Also, “the salaries of migrant workers are often withheld by their employers as a form of collateral for ‘good behaviour’ and to penalise them should they terminate their contracts prematurely.”

In fact, in 2009, the MOM had “received approximately 3,770 complaints about salary related issues from foreign workers”. However, “only 4 employers were prosecuted for failure to pay salaries in that year”.

Recently, the vice-principal of JurongWestSecondary School, Pushparani Nadarajah had asked, “How many of our leaders and top officers who say that every school is a good school put their children in ordinary schools near their home? (Only) until they actually do so are parents going to buy (it).” Similarly, for the policymakers, how many of them would be willing to earn $2.25 an hour in Singapore? And if not, should they subject the foreign workers to such low pay, or to even deny the problem of low wages? Should they step up their enforcement of wayward employers, instead of prosecute only 0.001% of the employers whom foreign workers have complained about being ill-treated?

Indeed, the fundamental question we have to ask is this – is it humane to pay workers such low wages? Whereas the cost of living in Singapore is the 5th most expensive in the world, does it make sense to pay any worker a paltry wage of $2.25 an hour an expect them to make ends meet in Singapore? Perhaps our policymakers might consider them as labour to be contracted, used and sent back – which might explain the knee-jerk reaction to suspend “25 private bus services which ferry workers to the area”, to take away the only leisure activity that they can have, and to even consider “housing some foreign workers at nearby offshore islands”, as National Development Minister Khaw Boon Wan had suggested.

In case our policymakers have forgotten, these foreign workers are human as well, and any human being should be treated with the basic respect and dignity that we would want to confer onto ourselves as well.

Indeed, Mahatma Gandhi had also said that, “The measure of a civilization is how it treats its weakest members.”

It would be highly questionable if our policymakers deem it fit to pay themselves the highest political salaries in the world, but pay Singaporeans and foreign workers the lowest wages among the high-income countries. Such exploitation of the workers say a lot about a government, who would rather believe in “growth at all cost”, while allowing the “weakest” to be left behind.

Indeed, Singaporeans have to ask ourselves – if we have a government which would treat the “weakest members” in our society with such disdain that would they treat the citizens with such unkind actions as well, and I think for many Singaporeans, we already have the answer.

Shanmugam had “urged the foreign workers to voice out any other concerns with regards to their wages and living conditions”. Such “evidence” is tons a plenty. Shamugam wouldn’t have needed to visit a few dormitories just to prove the point that foreign workers “have no complaints about working conditions, about salaries, about their employers”. If he had only spoken to the non-governmental organizations such as TWC2 or the Humanitarian Organisation for Migration Economics (HOME), he would have at least heard of some of the 3,770 greivances that the foreign workers in 2009 have.

Perhaps if our politicians would show some measure of civility, we look forward to them taking firmer actions towards errant employers and to improve the wage and living conditions of these foreign workers. The fair treatment of foreign workers in Singapore have larger implications for Singaporeans – it is precisely because the pay of foreign workers have been so heavily depressed that the wages of Singaporeans are depressed and have remained stagnant for the past few years. Singaporeans are forced to accept lower pay, in order to be employed. In order for Singaporeans to receive fairer and more equitable pay, the MOM needs to be firmer in their responsibility to take action against irresponsible employers, and ensure that downstream, workers receive fair compensation for work performed.

Riots and Wages in Singapore: Part 1

By Roy Ngerng and Leong Sze Hian

Last Sunday night, a riot took place in Singapore for the first time in 44 years.

According to Charan Bal, a university lecturer who recently completed a PhD on migrant labour politics in Singapore,

Tensions have been brewing for quite a while, and I believe these were sparked off by this bus accident. There have been tensions between migrant workers and bus drivers who ferry them from the industrial areas in the north and west to Little India every Sunday, where they do their shopping and hang out on their day off. I have taken these buses on a few occasions during my research and discovered the drivers tend to be very rude to the migrant workers.

The drivers – some are Singaporeans while others are Malaysian or Chinese – tend to be overworked and underpaid.

This comes one year after more than 170 SMRT bus drivers went on a two-day strike last year. So, are low wages a key reason that have sparked the strike and riot?

This reminds us of an article written by Professor Tommy Koh last year when he compared the wages of Singapore with the Nordic countries.

Prof Koh had highlighted that bus drivers in Singapore had earned only $1,800, whereas they would earn between $3,910 to $6,260 in the Nordic countries – at least more than 2 times what the bus drivers in Singapore earn (Chart 1).

Slide1

Chart 1

He had also compared the wages of cleaners – a cleaner in Singapore would earn only $800, whereas they would earn between $2,085 to $5,502 in the Nordic countries, again at least more than 2 times what the cleaners in Singapore earn. Furthermore, cleaners in Norway earn more than 6 times what cleaners in Singapore earn (Chart 2).

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Chart 2

Alex Au had pointed out that, “it is well known that low-wage foreign workers don’t have an easy time in Singapore. There’s an undercurrent of grievances stemming from an experience of exploitative behaviour by high-handed bosses and supervisors. Many have reason to feel that they have been chronically cheated of part of their wages.” Indeed, Charan Bal had also said that the bus drivers “tend to be overworked and underpaid”.

Two of Singapore’s largest and most significant industrial action and civil resistance in recent years – the SMRT bus driver strikes and riot – had come in a fury, one after another, and both were a result of low wages or underlying low wage sentiments. Are low wages a cause for concern in Singapore? It shouldn’t take a rocket scientist, lest a PAP politician to understand this. Thus was it helpful for Law and Foreign Affairs Minister K Shanmugam to have said that, “there is no evidence to suggest that the foreign workers involved in the Little India riot were unhappy with their employers or the government“, as the Today newspaper had quoted? Or does it even make sense for Transport Minister Lui Tuck Yew to claim that, “in my mind it was quite evident that alcohol could have been a contributory factor“?

No doubt, low wages and oppressive working conditions are indefinitely a major contributing factor to the largest industrial action and civil resistance in Singapore over the past two years. Thus it would be insightful as to what the Committee of Inquiry that has been set up to investigate the riot would report, or not.

When we compare the wages of low-wage workers with the per capita national incomes, the wage inequality becomes even more apparent. Indeed, it is the case that the richer a country is, the higher the wage a worker can receive in the country. Yet, why does Singapore buck the trend and pay our cleaners such low wages even though we have such a high per capita national income which is on par with the Nordic countries (Chart 3)?

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Chart 3

Why do we also pay our bus drivers such low wages, even though based on our per capita national income, Singapore should be paying our low-wage workers much higher wages (Chart 4)?

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Chart 4

Perhaps what would put the nail in the coffin once and for all to the argument is when we look at the cost of living, as compared to the Nordic countries.

When compared to the Nordic countries, Singapore is actually more expensive to live in than 3 of their capital cities. Oslo, Norway is 15% more expensive than Singapore. But Singapore is 5% more expensive than Copenhagen, Denmark, 12% more expensive than Stockholm, Sweden and 19% more expensive than Helsinki, Finland (Chart 5).

Slide5

Chart 5

Yet, low-wage workers in Singapore are paid much lower wages than their counterparts in the Nordic countries. Cleaners in Finland earn 161% more than cleaners in Singapore. In Sweden, this is 358% more, 584% more in Norway and 588% in Denmark (Chart 6).

Slide6

Chart 6

In other words, even though Singapore is more expensive than Finland, Sweden and Denmark, our cleaners earn a massive 62% lower than cleaners in Finland, 78% lower than Sweden and 85% lower than Denmark (Chart 7)! Yet, are cleaners expected to have a standard of living that is on par with the Nordic countries or even respectable by any standards? This is not forgetting that in the Nordic countries, the people are able to receive free healthcare and education – something which can be even considered a luxury for the low-wage workers in Singapore!

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Chart 7

Wages and cost of living aside, we may also need to address the issues of very long working hour and poor working and living conditions, particularly of low-wage foreign workers in Singapore. For example, a company which won a top entrepreneur award was also one of two companies that were fined after the Ministry of Manpower (MOM) and Urban Redevelopment Authority (URA) found workers living in unacceptable conditions.

According to AsiaOne, “investigations revealed that the company had provided the accommodations to its subsidiary companies and sub-contractors while being aware that it had broken several rules, including overcrowding. The site was also operating illegally as a commercial dormitory and was using space that was not approved for accommodation purposes. (The company) has become the first company to be issued a $10,000 composition fine for abetting other companies in failing to provide acceptable accommodation.

The chronic problem of low wages in Singapore is real. Very clearly, the significantly lower wages and higher prices in Singapore means that when compared to the Nordic countries, the purchasing power of Singaporeans is much diminished. The very simple question to ask is this – if prices are so sky-high in Singapore, and wages are rock-bottom, then what does it mean to the livelihoods of Singaporeans, whom many would have to scrape by to make ends meet?

The strikes and riots are only the beginnings of what is to come of the effects of the larger undercurrent of income inequality and unfair wages that are being paid to workers in Singapore, and if we choose to ignore the real causes – of low wages and oppressive work conditions – and attribute them to lesser factors, such as the overuse of alcohol, the denial of the root causes to the most massive industrial action and civil resistance in Singapore’s recent history will only result in further social unrest, as workers fight back against inequality, and oppressive and unfair treatment.

It is of no use to show statistics that may give the perception that wages are rising immensely, when they are actually not. And as long as the government does not take concrete actions to allow labour unions to be independent and allow them to engage in collective wage bargaining, and/or to implement a minimum wage, to increase the wages of workers in Singapore, Singaporeans can tell for themselves whether their pay has actually increased.

The strikes and riots are only symptomatic as to the larger social effects that will come, if the government doesn’t respond appropriately to the needs of Singaporeans and workers here. Further denial will indefinitely result in much larger social movements, which would undoubtedly overshadow the strike and riot, and the four major protests that have already been held in opposition to the Population White Paper and the Licensing Rule this year. Together, more than 10,000 Singaporeans have joined the protests this year. It wouldn’t be far-fetched to imagine that this figure would be easily overcome at next year’s protests or protests held closer to the next general election, at the rate that things are going.

*****

Empowering Singaporeans had just organised our first workshop – Towards a Better Education System – last week. We will be holding the next workshop to discuss about the jobs, wages and employment situation in early 2014. 

Follow us on the Empowering Singaporeans Facebook page or email us at empoweringsingaporeans@gmail.com for more updates.

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