High costs and low wages in Singapore

A comprehensive survey released by UBS has confirmed what economists, academics, opposition politicians and ordinary Singaporeans have known all along: That the Singaporean worker’s wages has decreased over the past 3 years, while the cost of living has shot up.

The Prices and Earnings 2009 survey by the Swiss bank, which the Straits Times did an Insight article on, offers a detailed look at prices for goods and services, and wages and working hours in 73 major cities worldwide. The survey found that:

offers a detailed look
at prices for goods and services, and wages and working
hours for 14 professions in 73 cities worldwide
  • Singapore’s wages after taxes and social security contributions rank us at 41 out of 73;
  • Singapore ranks as the 15th most expensive city, after factoring in the cost of rent (a major expenditure for Singaporeans);
  • Our workers’ purchasing power is ranked 50 out of 73;
  • Three years ago a Singaporean worker had to work 22 minutes to earn enough to afford a Big Mac. Today that same worker has to work for 36 minutes, because his wages have decreased and the cost of living has increased.

The contrast between the ranking of our cost of living (15) and our wages (41) couldn’t be more stark. Yet when asked for their views on these unfavourable survey results, two MPs were dismissive about it.

Mr Seah Kian Peng (Marine Parade GRC) said: “The figures may be right, but the conclusion could be wrong.”

As quoted by the Straits Times, he said that rather than look at prices and wages in isolation, the key considerations should be: Do Singaporeans lead a better life than they did in the past, and are the poor taken care of? If the answer to both is yes, then moving up or down two notches becomes mere semantics.

Mere semantics, Mr Seah?

Tell that to the worker who has had to suffer wage cuts or retrenchment just to keep his company afloat during the recession. Perhaps he needs to teach “semantics” to the housewife who has seen the prices of basic necessities shoot up over the past three years, even though she makes the best effort to purchase the “house brands” from Mr Seah’s supermarkets. (He is the Managing Director of NTUC Fairprice.)

I would have expected a so-called “labour MP” to be calling on the government to take this survey seriously, and look into ways to raise the wages of our workers, and lower the cost of living for the average Singaporean. But I suppose he was speaking with his PAP hat on, not his unionist hat. (I’ve met Mr Seah before. He is a very nice man. But his defence of the indefensible only highlights the lack of value add of ruling party MPs when the debate shifts to fundamental issues of national importance.)

Isn’t it amazing that when there are global surveys that rank Singapore highly, like the corruption or competitiveness indices, the government loves to claim credit for it, but when surveys like this UBS survey put the government’s policies in a bad light, they are dismissed as “mere semantics”?

To rub salt on the wound, we are told to look at the big picture: Compare your life now to 44 years ago. Is it better now than before? If yes, then shut up and stop complaining.

Well if the government wants us to look at things from such a general perspective, then I can also point out that the Taiwanese, South Koreans, Ghanaians and Chileans also have a better life now than 44 years ago. What’s the big deal? We have just been riding on a wave of global prosperity since the 1960s, no?

Another “labour MP” Halimah Yacob (Jurong GRC) questioned the validity of the survey, which has been published every three years for the past 38 years. She wondered whether the indicators include government aid. She claimed that Workfare Income Supplement, rebates and subsidies in health care, education and housing are “significant and help people to cope better”.

I’m not sure if Mdm Halimah really knows what she is asking for. If government aid like a comprehensive social safety net, unemployment benefits, free health care and free education are included, most cities in developed countries would even further outrank Singapore, which provides none of the above.

Causes of the current situation

The current state of affairs of high costs and low wages is not just a by-product of globalization which the government has no control over. This is a cop out and a convenient excuse that this government likes to make.

There is wide agreement among economists and analysts that our low wages, particularly at the bottom rungs, are caused by the flooding of cheap foreign labour into our country. The easy availability of foreign blue collar workers has given our employers little incentive to invest in technology and increase productivity. It has also lowered the bargaining power of local workers who have to compete with them for jobs.

High inflation and high costs too are not just accidental occurrences.

For example, the cost of public housing is directly controlled by the government, which can choose to build more new HDB flats (increase supply) and sell new flats at cost-plus, instead of making such huge profits out of home buyers. This will in turn bring down the prices in the resale market.

The introduction and hikes in the rate of GST has served as a regressive tax on consumers — hitting the low income harder than the wealthy. To date the government has refused opposition MPs’ calls for a GST freeze or reversal.

University tuition fees have risen rapidly in the past decade, yet the government continues to subsidize foreigners’ tertiary education to the tune of $105,600 over a 4-year course, instead of making higher education truly affordable to all Singaporeans.

Instead of just dismissing this survey or nitpicking at its flaws, our government leaders should seriously examine the policies that are causing this dismal state of affairs. They should start listening to the people who really know what’s going on on the ground, instead of brown-nosing “grassroots leaders” or scholar-bureaucrats who rely on charts and statistics to decide which policies will be tolerable for the “median” Singaporean.

Alternatively, they can choose to ignore it at their own peril at the next elections. Ordinary Singaporeans may be paying for the flawed policies now, but come the next election, someone else may be paying.

15 thoughts on “High costs and low wages in Singapore”

  1. Now I’ve learn the insights and expertise our MPs bring into Parliament.

    Seah Kian Peng’s logic: “rather than look at prices and wages in isolation, the key considerations should be: Do Singaporeans lead a better life than they did in the past, and are the poor taken care of? If the answer to both is yes, then moving up or down two notches becomes mere semantics.”

    I love the “semantics”. “Better life” through longer working hours, afforable housing (paid over longer terms by both husband and wife), non-existent job security. Yes, everything you read in our nation-building newspapers become mere semantics. News just get better and better… Uniquely Singapore!

  2. Thanks for writing this article. It keeps me focussed on leaving Singapore, as hard as it has proven to be…

    Debt is the best form of a lock to chain down all of us. We are the newest form of slaves and we don’t even know it. Sigh…

  3. Understanding how our gahmen operates on meritocracy, I think the bottom-line is that they want us to work hard to get pay increment.

    If there is a minimum wage, they might be fearful that it would cause the average Singaporean to slack.

  4. This is a big issue yes. But Singapore is but another country in SE-Asia and the way most countries are here, we could consider ourselves to be doing well. Guess the Government should stop using benchmarks that we’ve already surpassed economically (Philippines, Indonesia, Thailand etc…) as an example of how much worse things could be. Hong Kong and South Korea are good comparisons. If they’re doing well, the PAP really has no excuse.

    Seems to be a mighty convenient excuse. But then most of our leaders aren’t really used to being challenged, let alone having to live up to their seats in Parliament.

  5. The biggest towkay in Singapore is PAP government. You want them to introduce minimum wage? Fat hope!

  6. it doesnt reali matter how much grievences we have… sillyporeans will still the gahmen, esp rite b4 election they display the same old tricks again and the people will fall for the same old tricks again and then we will have the same old complains again…vicious cycle….GE coming, u guys noe what to dem rather den whine here n do otherwise..

    I fully agree with the scholorship thing, to the foreigners, WE are reknown for “financing outsiders with our own peoples’ $$” n the best part, they aren’t shy abt it, yet they can still laugh it off in your face…

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