By Roy Ngerng and Leong Sze Hian
In this article, we will continue to illustrate to you how wide the wage gap in Singapore really is.
- Singapore has the largest wage disparity among workers of different educational levels among all the high-income countries.
- The wages of workers with polytechnic diploma or lower would remain stagnant or drop over time, as they age.
- The poorest 20% in Singapore have only 5% of the share of all income while the richest 20% have 49% of the share of all income (in 1998) – the largest disparity among the high-income countries.
(A) Singapore has the largest wage disparity among workers of different educational levels among all the high-income countries
Do you know that when compared to the other high-income countries, the wage difference between a university degree graduate and someone who has a below upper secondary education is the highest in Singapore (Chart 1). Whereas a university degree graduate in Singapore would earn 3.7 times higher than some with a below upper secondary school education, this would be only 1.3 times in Italy.
Chart 1: OECD Indicators Education at a Glance 2013
Thus there is huge pay disparity between Singaporeans of different educational qualifications, which is concerning because such an indefinite policy measure would only result in entrenched divisions among the people in Singapore and create artificial social divisions.
(B) The wages of workers with polytechnic diploma or lower would remain stagnant or drop over time, as they age
However, the policy discrimination isn’t only reflected in educational discrimination, but in age discrimination as well.
Over the lifetime of a Singaporean who has a polytechnic diploma, they can expect their pay to remain unchanged or even decrease (Chart 2).
Chart 2: Report on Wages in Singapore, 2011
The scenario for someone without a polytechnic diploma is even bleaker – their pay will indefinitely decline as they grow older (Chart 3).
Chart 3: Report on Wages in Singapore, 2011
Thus, if only 30% of Singaporeans are able to enter local public universities, for the rest of the 70% of Singaporeans who earn $2,000 or less, they would only be able to earn barely the minimum needed to scrape by in Singapore, and might never be able to retire.
And because only the pay of university degree graduates are likely to increase over time, the wage disparity over time thus widens further (Chart 4). A university degree graduate in Singapore would earn 6.2 times higher than someone with a below upper secondary school education, whereas this is only 1.6 times in Denmark.
Chart 4: OECD Indicators Education at a Glance 2013
(C) The poorest 20% in Singapore have only 5% of the share of all income while the richest 20% have 49% of the share of all income (in 1998)
The next set of statistics will shock you.
Thus because there is such huge wage differences in Singapore, for the poorest 20% of Singaporeans, they are only able to have 5% of the share of all income (Chart 5), which is the lowest among the high-income countries – the poor in Singapore are worst off.
Chart 5: The World Bank World Development Indicators: Distribution of income or consumption
In contrast, the richest 20% would take in a 49% share of all wealth in Singapore – nearly half of all the income, and this is the highest when compared with the other high-income countries (Chart 6).
Chart 6: The World Bank World Development Indicators: Distribution of income or consumption
Not only that, the second 20% poorest have only a 9% share of all income – the lowest among all the high-income countries as well, and the third 20% in the middle-income group have only a 15% share of all income – also the lowest!
In short, the poorest 60% in Singapore have only 29% of the wealth – the lowest of all the high-income countries (Chart 7)! Can you imagine that – 60% of the population in Singapore and they don’t even have one-third of the total income in Singapore!
Chart 7: The World Bank World Development Indicators: Distribution of income or consumption
The comparison from Charts 5 to 7 for Singapore’s statistic is from 1998, the last year where this data is publicly available.
However, since then, the income inequality in Singapore has risen dramatically – we are now the country among the high-income countries with the highest income inequality (Chart 8), and one of the highest in the world.
Chart 8: OECD StatExtract Income Distribution and Poverty, Key Household Income Trends, 2012
As such, in all likelihood, the poorest 20% would most likely have less than 5% of income while the richest 20% would most likely accumulate more than half of all the wealth by now.
Not surprising since we have the largest wage disparity among the high-income countries.
So, what does the Singapore prime minister actually mean when he said that, “if you are poor in Singapore, there’s no fun. But I think you are less badly off than if you were poor nearly anywhere else in the world,” or that, “poor people are not poor by any international standard“.
Quite contrary to what the Singapore prime minister had said, the poor in Singapore are much worse off than the poor in other high-income countries, and are poor by any international standards! The statistics fly in the face of what the prime minister had said! Is this complete bullocks?
But really, how did Singapore come to a stage where there is such a massive wage gap, and how did our people become the poorest among the high-income countries, even as much as Singapore is one of the richest countries in the world, by GDP per capita. Why does Singapore now have the 4th highest concentration of billionaires in the world, but also have the highest poverty rate among all the high-income countries, and even countries in the region?
How does the PAP government intend for Singaporeans to live adequately if they continue to pursue policies which depress the wages of Singaporeans and the workers in Singapore, whilst contributing the lowest returns to Singaporeans’ CPF, while forking out the least for the health spending for Singaporeans? How can the government continue to expect Singaporeans to pay for the second most expensive public universities in the world, while Singaporeans receive the lowest proportion of scholarships, while also accumulating debt at a very young age even before we start work, and where whence we start, are faced with one of the world’s highest cost of living and highest prices in the world, on marginal wages?
The PAP’s Policies Will Lead to the Downfall of Singapore
What’s more, where policies have created such distinct educational pathways where Singaporeans seemingly end up in fixed career paths in life, the wage divide that follows us for the rest of our lives, serves only to entrench the unevenness and inequality further. Coupled with stagnant and declining wages as one grows older and an estimated 28% of Singaporeans living in poverty, the plight of Singaporeans is in indeed in danger.
Minister for Law and Foreign Affairs K Shanmugam might ask, “what evidence is there … (to suggest) that these workers were deeply disaffected and that is why the riot took place.” He had also said that, “I’m not saying you can’t say it, but I would like to see some evidence to back up a fairly substantive statement like that. All I can see is assertions and the fact that you repeat the assertions doesn’t make it a fact.”
As it stands, Singaporeans and workers in Singapore are paid the lowest wages in the world and the poverty rate is the highest among the high-income countries and possibly the highest among countries even in the region. Thus it also does not help when we have ministers such as Minister for Social and Family Development Chan Chun Sing, who had said that it is not helpful to define a poverty line in Singapore because, “if we use a single poverty line to assess the family, we also risk a ‘cliff effect’, where those below the poverty line receive all forms of assistance, while other genuinely needy citizens outside the poverty line are excluded.“
And on top of all of the above, the lives of lower-income Singaporeans may be further compromised by the Government, from a cashflow perspective – not spending a single cent on healthcare, CPF and HDB.
If it is not already apparent to the PAP government, the episodes and revelations over the past one year – the strike and riot, and calls to implement a minimum wage and to define a poverty line – are signs of the burgeoning needs of a populace who are already on the brink of social meltdown and if the PAP continues to ignore the screaming needs of the populace, such ignorance and strident denial will only serve to mark the end of the PAP’s demise in no uncertain terms.
Perhaps such is the evolution of power and societal change where time and again, history has shown, that if power is allowed to consume the will of individuals, that the only path to be ridden is one of downfall and then renewal, and Singapore does not seem to be immuned to the fate that has befallen all other political regimes and societies. A much needed breath of fresh air for the people of Singapore, it would seem, but only when the rot of power corrupted is overcome.
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Empowering Singaporeans had just organised our first workshop – Towards a Better Education System – last week. We will be holding the next workshop to discuss about the jobs, wages and employment situation in early 2014.
Follow us on the Empowering Singaporeans Facebook page or email us at empoweringsingaporeans@gmail.com for more updates.
