I've always thought of Tommy Koh as a staunch supporter of the PAP govt.
'The growing disparity and the hardship faced by the lowest 20 per cent of our workers is a threat to our social cohesion and inconsistent with our policy of inclusive growth,' - Tommy Koh.
GDP growth does not benefit ordinary Singaporeans unless the wealth created is shared more equally. We know the standard argument against minimum wage that it is not good for economic growth and job creation. This standard argument does not make sense if your goal is something else, say, enhances social equity, prevent the spread of poverty or raise the quality of life for the people at the bottom. You can create tons of jobs and attract billions in FDI if you keep your worker's wages low. Why do you think money FDI goes to China & Vietnam? Armies of peasant workers in these communist states willing to fill the factories work long hours for low wages. However, trying to compete against them using the "cheaper, better, faster" low wage strategy is a race to the bottom. You win only by impoverishing your own people. The PAP govt has brought in cheap labor from 3rd world countries to keep our GDP growth high. This depressed the wages of the bottom 20% and caused Singapore to have the highest income gap among developed countries. It is often said that Singapore is a developed country with a 3rd world wage structure.
Minimum wage, progressive taxation, social safety nets, universal healthcare and public housing are the ways to narrow or mitigate the effects of the income gap. The PAP govt has fouled up every single one of these - they implemented GST to cut corporate taxes & taxes of the highest income earners. Singapore has the most expensive public housing in the world - short in supply, high in prices and causes ordinary Singaporeans to be deep in debt for decades. They aspire to make Singapore a medical hub for the rich causing capacity to shift private hospitals and medical costs to escalate much faster than wages - they continuously shift the burden of these higher costs to ordinary Singaporeans to keep govt expenditure low. The hospital capacity has not expanded as 1 million people were added to the population causing the hospitals to be overcrowded. The minister in charge then pushed for medisave to be used for hospitals in Malaysia causing many of the sick to seek cheaper treatment in Malaysia (Malaysian hospitals now take care our sick !) Means testing which removes much of the subsidy for middle income families moving the heavy burden to those who get sick and their family was implemented this year. Adding to all these is the huge foreign influx which caused housing prices to escalate, public transport to be overcrowded and the income of Singaporeans to be depressed.
This govt now claims that "Singaporeans come 1st". Do you believe them when they say that? The PAP govt with the large network of companies to which it is linked has diversified its interests beyond that of ordinary Singaporeans. Its policies are lopsided and ordinary Singaporeans pay the price.
Sep 14, 2010
Tommy Koh weighs in
By Zakir Hussain
SENIOR diplomat Tommy Koh on Tuesday waded into a debate on minimum wage and argued in favour of such a wage as it will improve the lot of Singaporeans in low-paying jobs.
'The growing disparity and the hardship faced by the lowest 20 per cent of our workers is a threat to our social cohesion and inconsistent with our policy of inclusive growth,'he said at a book launch.
'As a Straits Times correspondent has recently commented, Singapore is a First World country with a Third World wage structure.'
Prof Koh, special adviser to the Institute of Policy Studies, was referring to an Insight feature in May on how wages of low-income workers in Singapore had not advanced.
He made his case in a speech at the launch of a book of essays on Singapore's success story and its challenges, Management of Success: Singapore Revisited.
His remarks come in the wake of a debate between two National University of Singapore economists.