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:
- 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.
Continue reading “High costs and low wages in Singapore”
Last week, Thierry Rommel, the European Union (EU)’s ambassador to Malaysia, openly criticised Malaysia’s New Economic Policy (NEP). The NEP (commonly termed the “bumiputera policy”) is a 37-year old affirmative action programme in Malaysia that favours ethnic Malays and other indigenous groups in government contracts and education.
While the criticism and the perfunctory backlash from Malaysian leaders is rather unremarkable, what caught my eye was when Rommel warned the NEP could “lead to problems” in free trade negotiations between the EU and the 10-member Association of Southeast Asian Nations (ASEAN), of which Malaysia is a key member. The EU and ASEAN agreed last month to launch free trade talks, which could raise ASEAN’s exports to the EU by up to 20 percent. Senior officials are expected to hold their first meeting in Vietnam next month.
While I believe that the NEP is something for Malaysians to argue about amongst themselves, I am concerned that this policy may affect a very important free trade agreement (FTA) with the EU, which is the world’s most important trading bloc. I do not think Rommel would have risked the wrath of Malaysia if he didn’t think this was a serious enough issue. As if ASEAN didn’t already have enough roadblocks to the FTA like Myanmar’s military junta and EU agricultural protectionism, now it appears Malaysia’s NEP threatens to be another roadblock to sealing this important FTA.
Links: Malaysiakini report