Tuesday, December 07, 2010

PM Lee on Income Inequality....

"Over the past decade, stresses and strains both internationally and from within our society have impinged upon us. We have seen globalisation go further than ever before. ...Overall it's a great plus for Singapore but at the same time it is putting pressure on our low-wage workers and widening the income gap" - PM Lee [Link]

In a recent speech, PM Lee blamed globalisation for the widening income gap in Singapore. While it is true that globalisation has an impact on income gap and many countries have seen the income gap widening in the past 2 decades, it does not explain why Singapore has the largest income gap among developed nations. No other developed countriy has imported cheap foreign labor on the same scale as Singapore, no other developed country has tilted their policies as far as Singapore to favor big businesses and allowing the income gap to widen so much. In recent years, the govt cut corporate taxes even as corporate profits as a % of GDP reached record levels. Regressive taxes such as GST that impacted the poor the most were increased. The govt pursued policies that increased the financial burden for those who are sick (means testing), poor (most expensive public housing in the world) and old (limited public assistance). The income gap and rising cost of living resulted in a large segment of the poorer working population living in financial strain due various compulsory "self-reliance" schemes when they have to set aside their own money for retirement (CPF, CPF Life) and medical care (Medisave). These schemes were only workabe when the income gap was narrower and the cost of living was lower relative to income. The govt's policy to expand the population by importing foreigners has been great for the bottomline many of the businesses linked to the govt such as the telcos, supermarkets, transport companies and banks but has been disadvantageous to ordinary Singaporeans as the cost of living (in particular housing) rose and quality of life fell due to overcrowding (esp. public transport).

"But last year Singapore's government revealed that while average wages were rising with the economy, incomes among the bottom 30 percent of households had actually fallen since 2000. " - IHT Report [Link]

The PAP govt solution for income inequality is retraining. This mantra of retraining has been uttered for more than a decade, yet we see income inequality rising. The fact is many low wage workers are retrained from one low payng job to another low (sometimes lower) paying job just to stay employed as the govt opens the floodgates to foreign imported labor to keep wages competitively low for businesses. Productivity has fallen over the years and the govt continues to resist moves such as implementing a minimum wage that give businesses an incentive to automate and increase productivity.

The PM now tries to blame the income gap on globalisation. Our income gap is the biggest among developed countries and much of this the result of PAP policies. By saying this problem is the result of globalisation, PM Lee is also implicitly saying that there will be no major policy changes/initiatives to address this issue i.e. much needed change is not going to come unless you make it necessary for this govt to implement change. The PAP will preserve the current system and maintain the status quo because tnis is the best setup to serve their own interests.


Anonymous said...

The reality is that the majority of Singapporeans were not unhappy enough with PAP to vote them out.

Sure people whine about PAP the same way they complain about their wives or husbands. But it doesn't mean they are going to file for divorce.

The problem is not about electory boundaries either, because GRC or single seat ward, PAP has won most of them. Even in wards won by opposition, their majority is slim.

Perhaps this election would be different. With large scale importation of foreigners who have taken away Singaporean jobs, we might for the first time, get enough Singaporeans who are disgruntled enough to vote against PAP.

Anonymous said...

Lee Hsien Loong is a spoil braid. His wickedness has incurred divine wrath, as evidence by his begetting of albino son, tragedic 1st marriage, getting cancer in middle age.

Put it directly, Singapore is actually Malay's land. Nowadays, I really saw so many Malays terribly affected by FT policy.

If Chinese think that their life are tough, please watch beside and have some compassion about our Malay brothers.

The Malay welcome our poor and hungry ancestors from China. Look at what we have given to the Malay today?

Do the Chinese really aware that many Malay has problem in getting decent job in private sector?

If PAP is to disclose poverty figure base on ethnic, I believe it would be a great scandal.

The FT policy is all about enslavement of us by hiking HDB price and to create unemployment artificially so that people will be syncophantic worker.

Anonymous said...

Income inequality is but a global problem.

Globalisation means just that wages in the West have stopped rising whilst wages in the stars are not rising fast enough.

On the supply side, there’s too much supply, because credit has been expanded without limit using paper money

China’s problem is that it cannot consume as much as it produces. And what they are doing by expanding their bank loans is to create a lot more production capacity, which they still can’t consume.

they have such a large population and the wage rates of 80% of the people at the bottom of the pyramid is US$4 a day. They don’t earn enough money to buy the things they produce in their factories

PAP has thrived on this unsustainable economic model for much too long.It is still singing the same tune given the current clear indication of where the global economy is moving rapidly.

If PM LHL is as brilliant as he is made out to be,let's see him be the first to tackle the problem,reduce the income inequality first in Singapore,then ASEAN

If he is of any good at all!

Anonymous said...

pride goes before destruction... i think a global war is on the way within two years time ...

Anonymous said...

Didn't LHL say 1 year ago that having income-gap is normal and no big deal, and that the GINI co-efficient is unimportant and even meaningless, as long as people have jobs can already? Now he acknowledges the income-gap without being dismissive, but then blames globalisation for it.

PAPies *know* but they don't want to admit it, that relentless mass importing foreigners of all sorts has already created a structural social & financial problem for citizens. As long as GDP is being pushed up and corporate profits are showing big gains, the PAPies and their elites all keep quiet and go along for the ride, enjoying the gravy train and their huge financial rewards. Cash is indeed above country and the people.

Citizens at the 50th percentile are having wage recession for the past 10 years. Those at the 30th percentile and below are having wage depression for 10 years liao.

Anonymous said...

Those who can already work until 60 got help to work until any age they like. Those who are already "rich" got "more help" to work till very old age.
But those who lose their jobs at
40s got no or little help.
While there are few jobs around, the HDB prices kept going up, while the cost of livings kept going up. So how?
No wonder inc inq is widening.

Taishan said...

The peasants will obey LKY once they are reduced to begging for food as the Japanese collaborator has articulated many a times.

Anonymous said...

Re Annon 8/12/10 08:25
On the supply side, there’s too much supply, because credit has been expanded without limit using paper money

The depression of wages leads to over capacity. The implosion is only postpone by ponzi public debt.

As long as banking cabal and their proxy politicians are in charge, we will see civilization moving towards stone age.

Anonymous said...

Fuck the bankers, landlord, real estate speculator and their proxy corrupt politicians.

Kwa Geok Choo comes from banker family. PAP is now a parasite corrupt party who did nothing but transfering our wealth to bankers, and landlord.

Anonymous said...

Today's 154th
" spore allows foreign grads to stay one year looking for job "

PAP has opened the job market wide open to 7 billions people on this earth

I call on newly converted coitizens to quickly renounce their papers,before they become the true suckers.

Anonymous said...

Taishan is absolutely right!

The Sin Rulers have put the people at their mercies by making the Sinkapooreans to beg or at least to hope for rebates, subsidies and workfares etc.

In Sin, the Rlers are truly SINFUL.


Anonymous said...

To anon 08:19........what do you have to say about Sabah and Sarawak? ......Iban land? Kadazan land? What about Australia.....abo land? And USA?......Apache land? There are rich Chinese and there are poor Chinese. The same goes for our Indian and Malay brothers. Government policies- good or bad, affects all. Please remove your blinkers!

Anonymous said...

seriously, when have we ever, in living memory hear PAP say " we are wrong", "we made the wrong decision", or "we could have done better"...They are supposed to be PERFECT, and if things don't work out, it is always because Singaporeans don't put enough efforts, or other external unforeseen factors affecting the result.

runroad said...

LKY's Wikileak:

"They are psychopathic types, with a “flabby old chap” for a leader who prances around stadiums seeking adulation.

MM Lee noted that he had learned from living through three and a half years of Japanese occupation in Singapore that people will obey authorities who can deny them food, clothing and medicine."

He is nothing if not intelligent and he put his years as a willing Kempeitai employee into good practice against his fellow citizens. The metaphor is unmistakeable:

[1] deny them food - by bringing in the cheapest labour to make wage competition a race to the bottom of the barrel; a race no Singaporean, with his NS and the median wage of $2400, can ever hope to win.

[2] deny them clothing - by locking up their CPF savings and denying them low-interest government loans; force them to slave all the hours that God made in order to meet their mortgage obligations to keep food on the table and a roof over their heads.

[3] deny them medicine - by denying them the first obligation of govt: a helping hand to keep their heads above water when the worst happens whether it be medical or financial. 'You die your own business'.

You can go on and on analysing the chicken's entrails to fathom the dire condition of the average Singaporean and why they permit it to be so but we all know the truth in our hearts. The S'pore Sheeple are a bowed and beaten people now, no longer with enough self-respect to take up arms and cry out to their masters, "Enough is enough!" And like all losers found wanting in Mans' story, if he doesn't wake up real soon the native true-blue will be cast into the dustbin of history and a more ruthless species will take over.

Anonymous said...

Yes,but the fact remains that about 60% sinkies support PAP.On paper that is

I have to wait for the next voting to update the current situation.

Anonymous said...

Yes,you can be said to be very far-fighted.

look at Monacco,a very small county with a population of about 30,000,but the richest in the world,not to mention the highest per capita GDP,but guess what is the average property price?

at least 10 times what we get in Orchard Road.

Sky is indeed the limit,if PM LHL would be kind enough to increase the no of gaming dens to 20?How about that?

Me,I am not clever,but a small brain to look and think!

PM LHL,pl do it!We would be rich!!!

Anonymous said...

i say it again 'migrate for the sake of your children'.

Anonymous said...

What migrate. I am a local born Singaporean and this is my land. Vote wisely. Vote for the politicians who will look after your interests. dt

Anonymous said...

It has been my distant observation that the then Prime Minister, LKY, did not feel that Singapore is ready for a first world status as a developed nation. As we can see why this is the case. They are still holding on to their third world economic policies till this day. We have not produce any genuine and sustainable product and we will always be heavily hit by the economic downturn as we don't have a strong home industry. This is a serious problem for Singapore. It cannot simply survive on two casinos. I think it's important to seriously reconsider Singapore as a home for future generations. Singapore is just not sustainable with the current government's economic policy. We pay them million dollar salaries to solve our problems but it is not working. Other nations ministers are not paid millions and their country's workers salaries are higher than ours. Can you explain this?

Anonymous said...

Mr Mah Bow Tan says that it would take 2.5 years to get a BTO flat. This is not true because I just got back from HDB and they told me 5 years. They told me 5 years and that if the new BTO is more than 47 storeys high, it will be 6 years. HDB also told me that many Singaporeans are taking on 2 jobs or doing part-time to meet their monthly home loan repayments because the houses are too expensive. I didn't say this. HDB said so. So who do want me to believe now?

Anonymous said...

I do not believe what PM Lee says. A lot of looking at one side of the coin only. Has the PAP govt made no mistakes in contributing to the growing income gap?

Anonymous said...

My friend who stayed in the Duxton waited for 4-5 years for his flat. So, it is true that the higher the BTO flats, the longer the wait, since construction time will be longer.

Income inequality affects mainly the lower end of our society. A simple gauge would be to assume it affects 1/3 of our society, as reflected by the number of academically challenged students in an average school. The reality is that the higher your education, the better your chances of earning more money. There are individual cases of lowly educated people who do well, but they are the rare exception and certainly not the norm.

As such, the bulk of us form the middle and upper income class, and it means we are the majority. So, until the day comes when PAP seeks to destroy its own middle class supporters, the majority middle class will continue to support PAP.

Anonymous said...

It is like a game where you keep on taking out one small piece at a time from a big stack before it collapses.

Maybe the tail end of modern globalization is starting to show more clearly its true colour and this has no precedent for people to realize its effect.

runroad said...

So, until the day comes when PAP seeks to destroy its own middle class supporters, the majority middle class will continue to support PAP.

That day of reckoning will not be far off if you read the comments on this expat's-only forum. Note that these expats seeking PR status tread directly on the toes of the middle-class PMET sector, with the advantages of multiple citizenships and no NS obligations to worry about. They are not competing with 'mainly the lower end of our society'.

The sad thing for S'pore's sleep-walking middle-class, when their eyelids finally pop open to see that their comfortable lifestyles are in dire peril, is that it will by then be far, far too late to do anything about it. "Then they came for me but by that time no one was left to speak up...", etc. The FT swarm will have overwhelmed, out-numbered and out-voted them at the ballot box. What was that someone said about 'our women will become maids in other people’s countries, foreign workers’?

Quote from the expat's forum:

'the writing's on the wall, just wait for the elections to be over and apply again, 90% of the people described in this thread will have their PR approved faster than you can say "screw the citizens"'

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Anonymous said...

Well it is time for CBF govt, since if it is going to apply to islandwide in Singapore.

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