Singapore: Middle Class Wage Stagnation

This was in the press not too long ago:

Middle class wage stagnation could lead to social instability
By Pearl Forss, Channel NewsAsia | Posted: 11 January 2007 1856 hrs

SINGAPORE: Middle class wages have been stagnant in the past 5 years, according to economists, and this could lead to social instability.

These concerns were shared by economists at the annual Institute of Policy Studies Singapore Perspectives conference, who also added that the government is taking steps to address the problem.

Economists believe a US economic slowdown in business and consumer spending may cause problems for Singapore, but as Singapore is tops in the ASEAN resilience index, it should be able to weather external shocks, thanks to a diversified economy and strong Asian demand.

They predict that growth going forward will be above 3 to 5 percent.

The long-term growth limits for a mature economy was previously in the 3 to 5 percent range.

However, economists are asking who this growth is for. The income of the bottom 30 percent of the population has fallen. What is more worrying is the fact that the majority of Singaporeans in the middle class has only seen about a one percent increase in their nominal income in the last 5 years.

The answer to this question is clear: the vast majority of economic growth has benefited the upper class and the rich; the middle and lower classes have hardly benefited from the reported economic growth that the government has put up of late. One can see this in the growth in property prices that has centred around high end luxury properties built mainly for rich foreigners, and in the focus on developing industries designed to attract the foreign rich to our shores: Casino gambling and Private Banking.

But considering the vast concentration of political power in the hands of a few, Singaporeans should not be surprised that their interests have been, at best, secondary to those of the ruling and upper class. Singaporeans have repeatedly chosen small monetary handouts over substantive political change, and the economic impact can be said to be a direct result of their political choices.

This is not just a Singapore problem say economists who point out that stagnant wages is a global problem.

The chief reason for this is globalisation, especially with India and China introducing a large pool of skilled and unskilled labour to compete with the labour forces of industrialised countries.

Singapore is susceptible to this because of its open economy.

This part of the report fails to consider one very important fact: Singapore is largely a country of wage earning employees, in contrast to free economies like Hong Kong or the United States where there is a substantial proportion of small businesses. These countries, unlike Singapore, value free enterprise and entrepreneurship; people take risks to start their own businesses and do not necessarily value the lawyer/doctor/accountant/banker route with anywhere near the kind of respect that Singaporeans do. Take a visit to Hong Kong and you will see multiple small businesses along Nathan Road running their operations long into the night, with their neon lights flashing for your attention. Singapore, in comparison, is a dead city. And why? because most people are too busy going home after their 9-9 job and plunking down on their bed, getting ready for the next day of work.

No, the thing that most makes Singapore susceptible is not the fact that it has an open economy, it is not the fact that China and India are exporting more and more cheap labour, it is because Singaporeans themselves have grown too accustomed to depending on the government to tell them what to do, what job to work for, and have been psychologically conditioned to be employee-smart, but entrepreneurially dumb.

Manpower Ministry data shows that 124,000 jobs were created last year and 45 percent of these jobs went to foreigners.

It is thus no surprise that multiple jobs should go to foreigners. In fact, citizens only took 30% of the jobs, the other 25% going to PRs. It is clear that Singapore is not a country for Singaporeans, it is a country where Singaporeans screw themselves to serve foreigners.

Why? Perhaps it is because Singaporeans as a whole have some kind of deep-seated inferiority complex where they do not believe that they are as good as foreigners. They treat their own scholars poorly by paying them less than foreign imports. They treat their own men poorly by not making special arrangement for the fact they have served national service. And they have a weird obsession with bringing in 'foreign talent' to fill each job where they believe there is no local to fill.

And the great paradox is that Singaporeans repeatedly vote in a government that embodies and emphasises this phenomenon. Can we really put all the blame on the PAP for being an abusive husband when Singaporeans willingly play the subservient wife? Can we really put all the blame on foreigners for wanting to take our jobs when we do not stand up to fight for our own ricebowls?

I personally think that Singaporeans are in no way inferior to foreigners. In fact, I have come across many caucasians whom I think are dumber than most. But then, the government and other Singaporeans seem to disagree.

It will be interesting to see how Singaporeans respond to this latest piece of news, and how this sado-masochistic relationship between ordinary Singaporeans and the government/foreigners develops.