Straddling [the] Income Gap

Straddling [the] Income Gap – ST Editorial July 12, 2006: A response which will never be published in the MSM.

First and foremost an editorial like this chooses which statistic to use. Secondly it chooses how it wants to interpret and project the chosen statistic. Commonly known as propaganda … here I present another way to interpret the data presented and how to question such statistics in this editorial and in future publications of this nature:

Why is a dollar amount used to demonstrate the rise in income from “$4,940 in 2000 to $5,400 last year” while a percentage is used to demonstrate “the income of the top 10 per cent of families [which has] increased by 14.7 per cent between 2000 and 2005, the income of families in the 11th to the 20th percentile fell by 4.3 per cent? The income of the top 20 per cent of households is now 31 times that of the bottom 20 per cent.”

Is it because the top earners wages are so obscenely high that publishing the figures would foment a revolution? Or is it because of who are in the top wage earner category? Numerous ministers? Executive Officers of TLCs and GLCs? Both put together – which in recent years have seen a large number by appointment thinly disguised behind the veil of meritocracy?

This is quickly followed up by an explanation for the disparity in income: “One explanation for this growing gap is the increasing number of retiree households. In 1990, there were 164,400 people over the age of 65; in 2004, there were 296,900. Most in this age group do not earn wages - the only source of income the survey measured - but live off their savings. The Department of Statistics also noted that the higher unemployment rate in 2004, compared with 2000, might also explain the drop in wages for the bottom 20 per cent.”

What I do not get from this collection of statistics is that while it attempts to reflect the reality on the ground and is presented as such in mainstream media it does not take into account the full picture. For instance we now can legally have taxi drivers up to the age of 73. Whereas the ‘cut off’ age for this General Household Survey in terms of wage earning is 65? And the official retirement age according to the CPF Board is 62?

So which age should be used to estimate or aggregate number of people who could be employed but are not? Are the numbers real or ‘manipulated’ to paint a certain picture? Because by including all those to the age of 73 or dropping it down to 62 would change the difference in wage earning capacity dramatically increasing it and decreasing it respectively.

But before anyone can digest or make sense (or nonsense) of the statistics provided so far the editor/writer claims that: “The chief explanation for the phenomenon, however, is globalisation. The income gap is widening in Singapore for the same reason it is widening in other advanced economies: The entry of low-cost countries into the global marketplace has meant intense wage pressure at the low-skilled end of the job spectrum in countries like Singapore.”

There are a few issues in the statement above on globalisation. Let’s go back some 40 years to the modern ‘founding’ of Singapore. Did we not enter the global market as a ‘low cost country’ which provided ‘intense wage pressure at the low-skilled end of the job spectrum in countries’ like America (pick your favourite first world economy here)? Did Americans blame globalisation then for the ascent of low cost economic centers outside of its territories? Doesn’t this sound familiar? Like it was repeated over and over again by the PAP during the recent Elections? To which my response was: you have all the ‘scholarly’ material in your stables and you choose to hike your inability to deal with change on ‘globalisation?’ The problem is in the system here in Singapore being not nimble enough to adapt to change – as much as it is with this phenomenon called ‘globalisation.’

Globalisation has been with us since the heydays of the East India Trading Company and are not likely to go away in the near or distant future. The questions should be: are our leaders fit and nimble enough in thought and deed to embrace it and move on to more creative enterprises which will overcome the effects of globalisation and which will ensure the future political and economic independence of Singapore and Singaporeans? If others can find a way to exploit or appear to be exploiting globalisation as a formula why are we stuck in a rut and using the phenomenon as a lame excuse like this editor/writer has?

And in line with governmental ‘regulations’ on writing in criticism the editor/writer has duly noted the possible solutions of skills upgrading and restricting lower cost migrant labour. Sounds suspiciously like party line the first one does doesn’t it? While the second smacks of protectionism in the name of keeping wages up? Thus ensuring the further rise in cost of living for Singaporeans?

Credit given where it is due and both the editor/writer, who is anonymous to date, rightly argue and cite that welfarism is not a long term solution nor a panacea despite the handing out of the Progress Package just prior to the recent Elections. But then what is? Should not MICA apply the same standards it did to Mr. Brown by coming down hard on this article for bringing up the issues but not supplying any issues? Or should MICA come down even harder since the writer is essentially anonymous, save to the editorial staff of the Straits Times, and who has written on a national agenda without properly presenting the whole facts? (Does not presenting all the facts constitute not telling the ‘truth’?)

Perhaps it would behoof the editor/writer to utilize his/her brains to make real propositions for change to deal with globalisation instead of just parroting what PAP has been propagating.

Such as the true release of government funds to help local SMEs instead of subjecting these small companies to ridiculous red tape like: “in order for us to disburse the grant of $100k to you you must first prove that your board of directors have the same amount in reserve.” Grow our local firms and let them compete on the worldwide stage. Spare some of the billions of dollars used to buy up shares in overseas companies and banks, which may have untold political consequences, to help our local firms stand up tall in this small world. Growth of local SMEs will engender more employment of Singaporeans which would generate a symbiotic relationship ensuring the further rise of local enterprises.

Stop the ‘parenting’ attitude that is so pernicious of the Singapore government to the point where now as third or fourth generation overseas Chinese entrepreneurs we have been ‘cut down to size’ as simply obedient Singaporeans for your own political expediency. (Remember LKY’s speech on hammering down every nail that sticks out? Now there are no more nails that stick out and we are just plain flat with not an iota of independent intellectual geography to speak of. Yeeaahh, count on me Singapore.)

Finishing off, the editor calls for a reconsideration of policies which heretofore have been ‘open’ in terms of low cost labour. Protectionism, in any form, doesn’t bode well for a country which has to rely on the free flow of trade. Singapore, as often claimed, with no natural resources has to, unfortunately, rely on free trade in order to sustain her economic impetus. What better way then for home grown companies / industries to foray out into the world and bring back the currency to pay lower waged workers?

Re-designing or re-designating jobs that are of zero or low value add should be slowly stopped as it is a tremendous waste of public funds which should go to insuring the future of Singaporeans and Singapore as a value-added service sector provider. Singaporeans should be encouraged to think critically, to explore without fear in all aspects of life.

Anguish. My country can treat the [modern] founding members of her society in such a manner. What will it do to me?

Necessity is the mother of invention. This adage has been bandied around for a long time and will remain valid for a long time more. But it is more important to note that dreams and aspirations go a longer way in terms of inventions or you would not be reading this article on a blog which has some nebulous origins in a garage in Palo Alto, California some 40 odd years ago.

Can I as a Singaporean, if I toe the government line and all the propaganda fed to me as a tool of socialization all through school and through ‘afraid to die’ parents and grandparents who have lived through the ‘ISD will come for you at 3am’ era, succeed in today’s world? Tomorrow’s world? Be a sufficiently independent and daring thinker who goes beyond thinking?

Politics affects everything without exception. Just like bullets do not have eyes.

Your vote, while you still have one, and the votes of those around you, counts immeasurably for the future of Singapore. Vote wisely always.