407,400 earn less than $1,200 after CPF?

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A year of disruption: From jobs to gigs

I refer to the article “A year of disruption: From jobs to gigs” (Straits Times, Dec 27).

It states that “Disruptive trends hit the labour market hard this year, which saw the rise of what some have called the “gig economy” – where conventional, stable jobs are replaced by freelance, “on-demand” gigs.

Gigs used to be done mainly by freelancers such as plumbers, musicians and photographers. They are hired for an occasion and paid after the job. There is no certainty when the next job will come.

But such arrangements have since spread in a big way to other sectors, notably food delivery and transport (Deliveroo, Uber and Grab) and short-term home rentals (Airbnb).

No statistics on independent workers?

There is no similar study in Singapore. Statistics on independent workers and the work they do are not readily available.

How many “own account workers”?

The Ministry of Manpower (MOM) tracks a category of what it calls “own account workers”, or those who are self-employed and do not employ others. There were nearly 170,000 of them last year and the numbers have not fluctuated much for a decade.

But the number does not capture all independent workers. It includes the estimated 40,000 active taxi drivers who are tied to taxi companies, but excludes Uber and Grab drivers who are required by both companies to set up sole proprietorships before they can drive with them.

Until officials start to collect and publish data on independent workers, it will be difficult to study and understand the impact of the gig economy here.

That said, anecdotal evidence suggests that the number of such workers is rising.

Employers welcome freelancers to cut costs

Employers welcome the trend too. As the economy softens, firms turn to freelancers to cut costs.

But while consumers and employers cheer, workers would be less enamoured. Independent workers do not have a stable job, do not earn a fixed salary, do not enjoy leave or medical benefits, and do not come under the protection of labour laws.

DPM Tharman: “no choice because they can’t get a full-time job, they can’t get a secure job” 

Deputy Prime Minister Tharman Shanmugaratnam has said: “I’m not yet a fan of the gig economy.” He told a forum in October: “Some of the people in what is described as the gig economy are those who’ve got no choice because they can’t get a full-time job, they can’t get a secure job.”

Narrative always on median gross income of full-time employed residents?

In this connection, the narrative in the labour and media reports are always talking about the median gross income of full-time employed residents, which is $3,949 (including employer CPF) in June 2015.

Median gross income of all employed residents (excluding employer CPF) is much lower?

However, if you look at the Ministry of Manpower’s (MOM) Yearbook of Manpower Statistics 2016 – the median gross income of all employed residents (excluding employer CPF) is much lower, at $3,125.

407,400 earn less than $1,500?

There were 407,400 residents (about 19.4 per cent of the total workforce of $2.1 million) whose median gross income was less than $1,500 monthly.

After CPF = less than $1,200?

If we deduct the maximum employee CPF contribution of 20 per cent – the net take-home pay may be less than $1,200.

Arguably, most of the 407,400 people with take-home pay of less than $1,200 may be struggling to make ends meet.

47,000 earn less than $500?

If we breakdown the 407,400 earning less than $1,500 into 47,000 earning less than $500, 125,900 earning less than $1,000 and 234,500 earning less than $1,500 – the financial stress that lower-income workers may be facing may be even worse.

No breakdown into S’poreans & PRs?

Moreover, since permanent residents (PRs) generally earn more than Singaporeans – I shutter to think what the above statistics may look like for Singaporeans.

Work 35 hours a week – defined as part-time?

(Note: When we changed the definition of part-time workers from up to 35 hours a week from 30 hours – we may arguably have by the stroke of a pen – increased the median income of both full-time (more than 35 hours) and part-time (35 hours and less) workers – at least from a statistical sense)

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.