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.

Gayle Goh, Mr Wang, and George Yeo

Lately, there has been a bit of a debate around whether those who blog over political issues should step forth into the mainstream media to exchange views with politicians in public.

The debate was sparked over a difference of opinion between Mr Wang and Gayle Goh about whether they should appear on BlogTV.sg's latest episode, "Big Boys Blogging." In particular, Gayle was rather critical of what Mr Wang said in his rejection of the invitation to appear on the show. Here's my take on the debate:

Gayle seems to have a soft spot for the mainstream media. She has participated multiple times on television shows and has written for local broadsheets. She also blogs with her real name, so, she really has little to lose by appearing on TV. In fact, it heightens her profile and helps her in her quest to promote 'engagement' between bloggers and the msm/incumbent politicians. She is also comparatively young, does not yet have a career and/or mouths to feed, and is waiting to enter college. Her life circumstances are very different from Mr Wang and other bloggers whom she critiques.

Mr Wang, in contrast, is a social commentator who prefers to preserve his anonymity. He has a career and a family to take care of. Being several years older than Gayle, he is conscious of the approach that the PAP has taken towards its critics and is cognisant of the risks he might be taking by stepping out into the open and revealing his identity. Given the approach that Lee Kuan Yew and family have taken towards outspoken critics of his regime, Mr Wang probably feels that it is more prudent for him to remain anonymous, rather than step out into the playing ground of the PAP.

As we can see, the two bloggers are in rather different stages in life and have rather different experiences with regards to politics. Gayle comes from a younger generation that is idealistic, optimistic, and has not felt the full force of the authoritarian rule of LKY, and probably does not fully understand the risks a salaried family man takes when becoming a government critic. Mr Wang, meanwhile, has observed the political scene in Singapore somewhat longer and is much more cynical that appearing on TV is worth his time.

Clearly, the two have vastly different experiences and points of view, which probably explains the great difference in opinion and response to the BlogTV invitation.

Interestingly, Gayle says that "[she] entirely disagree[s] with [Mr Wang's] take on this issue." Mr Wang himself has yet to respond to Gayle's post (as of this writing).

Gayle says,

"If we become blase and disinterested, distancing ourselves, then is it really the government's fault when we complain of an affective divide?"

However, she has not factored into her argument that CNA is a government owned media network that is heavily censored in favour of the PAP. While it may be all nice to engage in a conversation, that is only so if the exchange takes place on a fair playing field where both sides have the equal opportunity to make their points and where their statements are not skewed, censored, or misrepresented. The mainstream media in Singapore, however, has a reputation and track record of heavy censorship of anything that portrays the ruling party in a negative light. And because of this, Mr Wang probably has a very strong reason to turn down the invitation to appear on state-controlled television because of the ways he has been misrepresented and/or censored in the past.

Gayle also says,

"The right of reply is a wondrous thing."

And implies that by criticising the establishment from the comfort of his blog and refusing to engage them face to face, Mr Wang is denying them the right of reply. Yet in making her argument Gayle has failed to consider how the PAP have used their monopoly of the mainstream media in Singapore to shape public opinion and debate towards their agenda, without giving the opposition a genuine 'right of reply.' She has also failed to consider that George Yeo and PAP MPs have every opportunity to engage Mr Wang's posts on their own blogs or by leaving comments on Mr Wang's blog - on the internet they have a perfect opportunity to claim their 'right of reply,' an opportunity that they have yet to take advantage of. At the same time, the mainstream media is clearly a skewed playing field without the same opportunity for equal exchange that Gayle asks bloggers to give politicians. Time and again the local daily and its media cousins have not only censored but misrepresented opinions irrelevant to their agenda - critics are well justified if they decide that engaging on an uneven playing field is not worth their time.

Gayle does make several good points, though, one of which is:

"...the opportunity to quiz ministers directly on the issue helps the debate to evolve."

Indeed, few would deny that being able to converse directly with those in power is an exciting and valuable opportunity. Even Mr Wang acknowledged that he "was somewhat tempted." I doubt any would contest that genuine engagement with a minister would enhance political dialogue and citizen participation in politics.

But perhaps if she paused to consider why so many bloggers turned down the opportunity to converse with George Yeo (at least four or five did so, to my knowledge; even Bernard Leong nearly declined the invitation - which would have made Gayle the only participant), Gayle might find cause to temper her criticisms of these bloggers with as much criticism of the media machinery in Singapore.

However, this post may have too much Gayle bashing. Perhaps she is right, and the other "notoriously uncontactable bloggers" are all wrong. Perhaps her youthful idealism and optimism will pay dividends when she "ask[ed George] about opposition politicians and new media like podcasts and (tongue-in-cheek) sound amplification devices in public." If, and when, "these things... ..survive the cuts and edits," I will be more than pleased to have my arguments proven wrong, and for Gayle's efforts to herald a new era in political engagement between ordinary citizens and ministers in the mainstream media.

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Bibliography:
Your Danse Macabre
Talk of the Town
Teaser to "Big Boys Blogging"

GGBL Fund Review

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SDU's role as Cupid comes to an end

In today's ST:

SDU's role as Cupid comes to an end

Govt matchmaker to hand reins to private agencies; it will accredit them

TWENTY two years, 42,400 successfully hitched singles - and a heap of scorn and bad jokes along the way.

Now, the Government's Cupid for graduate singles, the Social Development Unit (SDU), is hanging up its quiver and leaving matchmaking to the private sector.

It will not, however, quit the scene totally.

In an about-face from its early days - when the mere mention of it elicited a nudge and a wink, and when wags said its acronym stood for Single, Desperate and Ugly - the SDU brand now has cachet.

So its new focus will be on giving its stamp of approval to dating agencies and professional matchmakers, and on funding private-sector agencies and projects which promote dating.

The change in direction is perhaps a result of the national icon's acknowledgement that it has been unable to shake off its image as a state-controlled dating agency, and that private businesses will be better at helping the nation's singles pair up.

Yesterday, Mrs Yu-Foo Yee Shoon, Minister of State for Community Development, Youth and Sports, under which SDU falls, said: 'We believe that the private sector is more creative and innovative. We hope it will play a bigger role in organising social interaction activities and offering dating services for singles.'

While SDU and its sister Social Development Service (SDS) for non-graduates had done well, 'there will always be singles who prefer a private set-up', she added. For the SDS, specially selected grassroots leaders will be appointed to take over the organisation of matchmaking activities.

Hahaha! Guess what! This news confirms what we all knew all along: the government cannot make it when it comes to match make couples!!!

This is an explicit admission that the govt's social engineering policies and attempts at getting Singaporeans to make love have been a failure.

Well, I'm glad I threw away all those SDU packets that they've annoyingly sent into my mailbox for the past couple of years... I don't need you stupid govt to tell me to date and to find a mate.

Expect to see more failed government initiatives being outsourced to the private sector. Why? Because the government cannot make it when it comes to things like this! Social engineering is a deluded policy set up by LKY and that is bound to fail, because the forces of nature are more powerful than any state administrator.

Seriously, isn't this obvious?

'there will always be singles who prefer a private set-up'

Anybody who has ever had any date knows that they don't like to have Daddy and Mummy watching over their shoulder. Except perhaps Lee Hsien Loong who has had Daddy to tell him who to date and who not to date - he and his wife Ho Ching are the ultimate engineered couple. But they don't seem very lovey dovey do they?

Well, most Singaporeans are not like him and are able to make their own decisions when it comes to choosing a mate. And I think they're a lot more romantic in their approach to love than the Lee family 'marry a woman who's more capable than you' utilitarian-logic approach.

Singapore does not need the Lee philosophy to dating. And this move by SDU proves it!

Singapore vs Hong Kong vs Shanghai as Financial Hub

Singapore makes a lot of noise about being a competitive financial centre - particularly a private banking hub with Swiss standard of private banking. But it seems that all the money is going to Hong Kong.

With the rapid growth of China, and multiple Chinese mega corporations having their IPOs lately, and the stumbling of Shanghai with huge instances of corruption (the former Shanghai governor was fired earlier this year for corruption), Hong Kong is emerging as the true financial centre of China.

Singapore, in comparison, picks up all the small bits and pieces with IPOs of small industrial Chinese companies with poor competitive positions.

A latest Knowledge@Wharton article confirms this:

"Most of the listed companies are state-owned. If you are a state-owned company listed in Shanghai you can't give your executives or directors [stock] options," Meyer says. "The Shanghai stock market has been on a long downhill slope for some time ... it also almost looks as if China has outsourced its capital markets to Hong Kong." He notes that the amount of capital raised on the Hong Kong stock exchange in the first half of 2006 -- fueled by Chinese company listings -- was greater than the amount raised in New York.

Hong Kong is effectively establishing itself as the New York of China - and the Hong Kong Stock Exchange is becoming the New York Stock Exchange of the East.

Furthermore,

...Beijing also has learned in the last decade that "Hong Kong is a window to the rest of the world.... There is an advantage to keeping Hong Kong prosperous and not overshadowing it." Hong Kong has a deep talent pool of lawyers, accountants, traders, analysts and economists that can't be easily replicated in Shanghai, he adds.

And it also can't be easily replicated in Singapore. Despite Singapore's moves to be an private banking hub, the real bulk of the banking and financial services in Asia is going to be conducted in Hong Kong.

With massive IPOs, it only makes sense for fund managers and investment bankers to headquarter in Hong Kong where they can get access to the best companies. It doesn't make sense for fund managers to stay in Singapore, away from the action in Hong Kong.

And what about the argument that Singapore has a much cleaner environment and that Hong Kong is polluted and drives away talent? Well, Hong Kong is realising this and cleaning up its environment:

Environmental officials in Hong Kong have begun working more closely with mainland Chinese authorities and are posting pollution data on public access web sites. They have also sharply criticized Exxon Mobil for failing to install equipment to clean the smoke from dirty coal-burning electric units that supply Hong Kong with electricity.

"This is part of economic development," Rowse says. "Forty years ago, there were oxygen tanks on the streets in Tokyo. They cleaned it up." Hong Kong can't point its finger at China for air pollution "because much of it is coming from Hong Kong-owned factories. We're not innocent here." As for the threat of pollution to the city's growth, "Individual executives are very critical of the air, but the companies still know they have to be in Hong Kong to earn a profit."

The smog presents a temporary disadvantage to Hong Kong because employees don't want their families to have to breathe in polluted air. But with a strong resolve to clean up the air, Hong Kong should be able to fix this problem. Once it does it, its underlying structural advantages will establish Hong Kong as the financial centre of the East.

Some confusion over your philosophy, PAP?

"I believe at the end of the day, it is possible to create a society which is both competitive and compassionate"
-Vivian Balakrishnan

"...a well-educated university graduate who works for a multinational company should not be bemoaning about the Government and get on with the challenges in life. ... Some people cannot take the brutal truth"
-Wee Siew Kim

How ironic that just after Wee Siew Kim and his daughter establish that they are 'elite' and 'uncaring', Balakrishnan stands up in parliament to claim that the govt is building a 'compassionate' society.

Well they better start with their own MPs. Making such statements in parliament while your own party members make insensitive, uncaring and uncompassionate comments reeks of hypocrisy and is unacceptable for ministers and MPs who are amongst the highest paid in the world.

PAP, prove yourselves with actions, not empty words.

Building an Inclusive Society in Singapore

Indranee Rajah brought up several good points about groups of Singaporeans "not feeling included."

1. Those who drop of school at a young age and find it difficult to integrate into society because they cannot get into skills upgrading courses e.g. courses which require 'O'-levels are not accessible to those without the academic qualification - someone with relevant work skills and experience cannot attend a course which he/she is skilled or experienced in.

Her proposal was to remove this 'O'-level barrier for such courses, and to take into account relevant work experience.

2. Singaporeans (mostly males) with foreign spouses who cannot purchase a flat because the spouse is a foreigner - because policy makes it difficult for them to get a secure roof over their heads. So these Singaporeans find it difficult to settle down and have a family and... make babies.

Solution: Don't disallow them to rent the hdb flats altogether

3. Single unwed mothers who are not allowed to rent HDB flats - an outdated policy. MND does not want to encourage them to have babies out of wedlock.

Solution: Get the mother and child in a stable environment where the child can be educated and where the mother does not have to worry about extraneous circumstances

4. Can only rent if 2 singles above 35 - elderly's friends pass away and they cannot rent flat.

Solution: find rental housing for the elderly - integrate the elderly into the rest of society where there are young people etc.

All solutions proposed by Indranee are good ones, but there are deeper underlying structural problems with society and government that need to be addressed:

A. The first issue brought up about the O-level barrier is symptomatic of a society that has a myopic definition of talent and skills and only recognises academic performance, not practical life skills and other talents which are just as crucial to the functioning of a balanced society as are academic skills. In fact, given that the education system mostly focuses on dumb memorisation and rote learning, I would argue that those who have dropped out of school and have acquired real work experience and skills e.g. mechanics, cooks etc. have made better use of their time outside the education system than within it.

The focus on academic skills is simply too narrow minded and fails to take into take account multiple intelligences (musical, artistic, athletic, technical etc.) that make up a diverse humanity and that can contribute to the building of a richer society than a unidimensional one that is absurdly skewed towards 'scholars.'

It is this mindset that permeates the Singaporean psyche that needs to be purged and destroyed - and it is this mindset that is the real problem.

B. Issues 2,3, and 4 are HDB problems, and Indranee's proposed solutions are good, but they are only short term problems that, once again, attack the symptoms, not the underlying problems.

These problems arise because the government has this 'daddy knows best' attitude that is downright condescending, and often, completely wrong. It comes from misguided attitude that the government can socially engineer Singapore society into a utopia without single mothers and where the elderly find friends easily and where singaporeans only marry singaporeans.

What needs to be fixed is this arrogant attitude of the ministers who think they know everything, when in fact they only create more problems in the social fabric of singapore with their dysfunctional policies. Somebody needs to teach these people that the forces of nature are larger and more powerful than them and their arrogant 'philosopher king' attitude should be trashed. Lee Kuan Yew is one person in particular who harbours this attitude and the fastest way to see change in parliament is to kick the bugger out.

A longer term solution is to just abolish these stupid social engineering policies and just let nature take its course. The private sector and a free market can do fine to accomodate single mothers, foreign spouses, and the elderly. It does not need egotistical bureaucrats to mess things up - many of the problems Singapore faces could have been avoided if not for the meddling hand of the government.

All in all the government needs to be weakened and the private sector needs to get stronger. It is time for change to get under way.

And as can clearly be seen, the PAP's vision of a society where 'nobody is left behind' is so flawed, it's almost delusional. these groups of people are just a small number of the numerous groups are being left behind and Lee Hsien Loong had better get cracking on these problems in order to justify his cabinet's multi-million dollar salaries.