13 Nov 2004

Winner Takes all in Singapore

The issue is one that is not merely located in Singapore and was recently discussed by a BBC show called Panorama, which airs on the BBC World in Singapore. However you can get links to it at the following site.

I have also provided a link to statistics published in June 2002, which shows that the gap between rich and poor is increasing as Singapore rapidly becomes a "Winner Takes All Society". The gap has continued to widen after the economic crisis.


published article below is from sg-review.
Streats
10 Nov 2004
Leong Sze Hian

Rich-poor divide is widening

I REFER to the report, "Poor getting poorer in Hong Kong" (Streats, Nov 4), and former permanent secretary Ngiam Tong Dow's recent remarks in the media about the greatest danger being elitism and complacency.

Lawmakers are said to be urging the Government to do more to close a widening wealth gap.

Meanwhile, the gap between the rich and poor in Singapore seems to be widening.

The number of people in Singapore considered affluent has jumped by a quarter from five years ago, despite recession and job losses, according to a study by London-based business intelligence and consultancy firm Datamonitor.

According to the latest Ministry of Manpower labour market report, the percentage of workers still looking for a job six months after being laid off was 66.7 per cent for those with secondary education and below, and only 10 per cent for those with post-secondary education.

According to a study by Mr Mukhopadhaya Pundarik at the National University of Singapore, income inequality increased in Singapore during the Asian economic crisis.

The average household income of the bottom decile decreased by 48.4 per cent, while the overall decrease was only 2.7 per cent.

The unemployment rate for this bottom 10 per cent increased from 28.2 per cent in 1998 to 44 per cent in 1999 - an increase of about 56 per cent compared to 42 per cent for the total labour force.

The latest inflation data for Singapore shows that the rise in consumer prices for the lowest 20 per cent income group was more than seven times that of the top 20 per cent income group.

Regarding tax incentives, I understand that more than a third of the working population does not earn enough to pay income tax. A tax policy that progressively gives more rewards to the richest and hits the poorest may lead to even greater income inequality.

Eighty-three countries are ranked above Singapore in the United Nations Human Development Index Report's Income Inequality measure.

According to the Singapore Census of Population 2000, the ratio of average income for the top 20 per cent to the lowest 20 per cent increased from 11.4 in 1990 to 20.9 in 2000.

Perhaps we need to give more emphasis to reducing the gap between the rich and the poor.

- Leong Sze Hian

3 comments:

Mellanie Hewlitt said...

http://groups.yahoo.com/group/Sg_Review/message/1373

Comments: Mellanie Hewlitt
13 Nov 2004
Singapore Review

We circulate below two recent articles which touch on the growing income disparity between the rich and the poor in Singapore. The latest article in the
10 Nov 2004 issue of Streats also reminds us of the very glaring income dispartity between Singapore Ministers and the average Singaporean

So glaring was the income disparity that it even provoked a response from foreigners who wrote in to sound out their thoughts. (See article by Julie
Rogers "Does Inequality Make You Sick? S'pore ministers salaries" which first appeared in the 27 Oct 2004 issue of Singapore Review)
http://groups.yahoo.com/group/Sg_Review/message/1360

The below table gives aproper perspective: (these are basic figures as of July 2000 and did not include last year's pay hikes or other benefits. Otherwise the
updated numbers may well be much larger)

1. Singapore Prime Minister's Basic Salary US$1,100,000 (SGD1,958,000) a year
Minister's Basic: US$655,530 to US$819,124 (SGD1,166,844 to SGD1,458,040) a year

2. United States of America President: US$200,000 Vice President: US$181,400
Cabinet Secretaries: US$157,000

3. United Kingdom Prime Minister: US$170,556 Ministers: US$146,299 Senior Civil
Servants: US$262,438

4. Australia Prime Minister: US$137,060 Deputy Prime Minister: US$111,439
Treasurer: US$102,682

5. Hong Kong Chief Executive : US$416,615 Top Civil Servant: US$278,538
Financial Sec: US$315,077

Source: Asian Wall Street Journal July 10 2000

In relative terms, less then 20% of Singaporeans here have take home salaries exceeding SGD100,000/- A YEAR.

In stark contrast, BASIC SALARY FOR A MINISTER STARTS AT SGD1,166,844 A YEAR,OR JUST UNDER SGD100,000 A MONTH.

What these ministers earns in just ONE MONTH exceeds the ANNUAL TAKE HOME salary of 80% of Singapore's income earning population. Lets not even begin to
compare annual packages which will exceed SGD1 million easily.

With the above numbers and figures now in perspective, it is easier to give substance to the words "leading by example". Several facts are noteworthy here;

a) That the ministerial salaries are grossly out of proportion, even when compared with their counterparts in much larger countries (US and UK) who have
far heavier responsibilities.

b) That these salary reductions were long overdue. In the past, such handsome remuneration were "justified" on the back of resounding performance. However,
Singapore's economy has been in the doldrums of a recession for several years now (with beginnings reaching as far back as the 1997 Asian economic crisis).
This economic barometer is a rough measure of performance and implies that ministerial salaries were due for review at least 3-4 years ago.

c) That adjustments should be made to bring them back within the industry benchmarks. Taking the salary of US vice president as a rule of thumb, the percentage for reductions should start at 50% of current pay. Even if a
Singapore minister takes a 50% pay-cut, he would still be earning much more then the US vice president.

d) The percentage reductions should greater then 50% if the intent is to bring the salaries within the perspective of Singapore's domestic scene.

With such inflated figures, it is understandable why the local government controlled media (Singapore Press Holdings) have taken pains to exclude mention
of actual numbers for the world to see. The numbers would be too glaring and no amount of window dressing or creative writing could have reconciled these
numbers with a sane figure and restored credibility.

It is unlikely that Singapore's Ruling Elite will accept such huge salary cuts. Exactly How much and when the ministerial pay-cuts takes effect is not revealed.
Ask any man on the street and 9 out of 10 responses indicate many agree the current ministerial salaries are grossly inflated, especially in these lean and
difficult times.

Said a long time forumer from an internet political chat group:
"First of all the Ministers are NOT leading on pay cut. Workers' salaries have been drastically reduced since the beginning of the recession while thousands
have been unemployed. so the Ministers are NOT LEADING. they are only CATCHING UP. And they have several decades to catch up on."

"Secondly, how much of a pay cut will Ministers take? 10%? 20%? unless its a cut that will affect their lifestyles, it is merely symbolic and they would still
not know what it feels like to be a normal worker. as such, this is not Leading by Example. Its just another bogus political propaganda stunt"

A 29 yr old executive who requested to remain anonymous admitted sheepishly ;
"The numbers (ministerial salaries) are a national embarrassment really, because it reflects the underlying materialistic value systems of Singapore Ministers. No matter how you look at it, the fact remains that our ministers are money faced, and these are supposed to be Singapore's leaders, with value systems that Singaporeans should follow." "It (the ministerial salaries) puts Singapore in a
bad light in the eyes of the world. The rest of Singaporeans really put in an honest days work for every penny they earn. And the process for review and
approval of the ministerial salaries is also a joke. Imagine sitting on the board and approving (on White Paper)your own salary increments! Its all a wayang
show".

This also raises the question as to the authenticity of the actual process for review and approval of cabinet minister's salaries. Who decides on these numbers? Is there independence and transparency?

Veteran opposition figure J.B. Jeyaretnam on Wednesday, Nov 20, 2002 challenged Singapore government ministers to take a pay cut to show they understand the economic hardships faced by the public. And the over-riding concern is that Singapore's Ruling Elite are unable to appreciate the economic hardship that the masses face in these tough times.

The growing public resentment comes afew months after PM Goh's careless comments that "lay-offs were not all bad", drew a backlash from the public with a flood
of e-mails being sent to the foreign press to register public indignation.

Source Sg_Review group

-------------------------------------------------------------

From: Julie Rogers
To: Singapore Review
27 October 2004

Does Inequality Make You Sick? S'pore ministers salaries

Hi, I pondered over Catherine Lim's article "PAP and the people: A return of disaffection?"
(see: http://www.singapore21.org.sg/art_disaffection.html#debate1)

Until recently I knew next to nothing about Singapore so it is a
revelation that my first introduction to this little speck is through various
discussions on the internet about Ministerial Salaries.

Quite frankly I am rather appalled by the fact that ministers in your
country can earn upwards of USD 1 million. Any officer of the state is a
public servant and this was a once noble and honourable calling. In
the civilised world, persons assume this office because they want
personally to contribute to the well being of the country. Self sacrifice and
altruism are essential hallmarks for a public office holder and the minister
must be ready and willing to make these personal sacrifices.

If the heart is not in this noble service, then it will be wasted
effort. Money should not be an issue at all and if it is, then your "elected
leaders" have very ill-placed priorities and are obviously in it for the wrong
reasons.

Even if we were to overlook the misplaced financial motives of your
ministers, the sheer gulf in income disparity between ministerial salaries and
those of the working class will create a huge irreconcilable dichord and
disenchantment with any normal voting public. (A valid point in Catherine Lim's
article)

But I am told that Singapore is a democracy with elected leaders! So
I have to assume that Singapore must have a very unique "voting public" which
is able to silently and willingly take all this in their stride. Singaporeans
should take note here that Who they vote for and who they elect is a reflection
of their own core value systems and the undeniable fact remains that
Singaporeans have elected a group of Leaders who are eminently pre-occupied with
escalating their on salaries.

I for one will never be able to accept this unequal state of affairs
if ever it was my lot. And thank goodness it isn't for I will never be able to
sleep soundly at nights knowing that the fate, future and well being of my
country are in the hands of a bunch of financially motivated hired
mercenaries.

Below is a further write-up of some of the social ills that a huge
income disparity can create. There is an old saying that the most efficient
form of governance is a Monarchy, but this assumes the Monarch has the same
priorities and agenda as the people he rules. Is this the case with Singapore's
Monarchy?

I repeat that who you elect is a mirror image of your own core values
and Singaporeans have to ask themselves whether their current leaders who
require million dollar salaries to be in office, have the same value systems
as the voters who elected them.

Lastly, I have also copied in Guniess World of Records to see if this
unique feature of your country will earn it a place in the world record
books.

Julie Rogers

http://www.sallysatelmd.com/html/a-ws1.html

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