TR Emeritus
The Real Singapore
Post date: 14 Dec 2013
http://www.tremeritus.com/2013/12/15/riots-and-wages-in-singapore-part-2/
http://therealsingapore.com/content/riots-and-wages-singapore-part-2
By Roy Ngerng and Leong Sze Hian
An overturned police car in Little India riot
Last Thursday, we wrote about the low wages that low-wage workers in Singapore receive and how this might be a main contributing factor which had triggered the strike and riot in Singapore’s recent history.
But this is only half the story. Today, we will reveal to you more about the wages and how massive the disparity is.
Do you know that not only do low-wage workers in Singapore earn the lowest wages among the Nordic countries, the median wage of Singaporean is also the lowest among the Nordic countries (Chart 1)?
Chart 1: International Labour Organisation Data collection on wages and income
As discussed, Singapore’s per capita national income is similar to the Nordic countries. Singapore is also more expensive to live in than Denmark, Finland and Sweden. As such, the relatively low wages in Singapore would be an immense burden to Singaporeans.
But, what is more shocking is that even though Singaporeans earn the lowest wages among the Nordic countries (and the other high-income countries), the Singapore politicians actually earn the highest salaries in the world!
Already, you see that when compared to the Nordic countries, cleaners in Singapore earn 62% to 85% lower than the cleaners in the Nordic countries. Also, Singaporeans’ median wage is also 37% to 66% lower than that in the Nordic countries.
But when you compare the pay of Singapore’s prime minister to the other prime ministers in the Nordic countries, the Singapore prime minister earns the highest salary and not only that, but earns 527% to 749% more than them (Chart 2)!
Chart 2: newinenglish.no, World Economic Journal, Ethical Salaries for a Public Service Centred Government, Swedish Language Blog, White Paper on Ministerial Salaries
What’s more, if you look at the salary per capita paid to the prime ministers, Singaporeans pay between 1035% and 1435% more to the Singapore’s prime minister, than the citizens in the Nordic countries do (Chart 3).
Chart 3: newinenglish.no, World Economic Journal, Ethical Salaries for a Public Service Centred Government, Swedish Language Blog, White Paper on Ministerial Salaries
Next, when you look at how much the Members of Parliament (MP) in each country are paid, the Singapore MPs are paid the highest salaries again (Chart 4).
Chart 4: Business Insider, EcPoFi – Economics, Politics, Finance, White Paper on Ministerial Salaries
This thus explains why the government ministers earn 108 times more than the bottom earners in Singapore (Chart 5).
The Singapore prime minister had said that “ministerial pay … has to remain competitive” because, “Singapore has to maintain a high quality of government, otherwise we are going to go back down and we are going to be a mediocre country.”
But what exactly might the Singapore prime minister mean about not becoming a “mediocre country”?
Singaporeans have been told repeatedly over the years that we need to pay our politicians high salaries to prevent corruption.
Since Singapore and the Nordic countries are and historically been ranked very highly in Transparency International’s index on corruption, Singapore has often been compared with them, and study trips have been made to study their economic and social system, we will now attempt to do a comparative analysis between Singapore and the Nordic countries.
In addition to salaries and corruption, the other dimension of comparison may arguably be the performance of Singapore vis-a-vis the Nordic countries.
Since so much has so often been trumpeted in the media about our world clase rankings in so many things, we will in the interest of brevity, just list some of Singapore’s poor rankings below:
Indeed, when we look at some international rankings, Singapore does perform admirably – Singapore is ranked 5th as least corrupt, 2nd most competitive and 8th most innovative. Does this suggest that exorbitant salaries are indeed necessary to not become a “mediocre country”?
But yet, when you look at the rankings of the Nordic countries, the Nordic countries perform just as admirably! The Nordic countries are among the 15 most competitive countries in the world, Sweden and Finland rank higher than Singapore in terms of innovation, and Denmark and Norway rank at 9th and 15th respectively. In fact, the Nordic countries are ranked the least corrupt in the world, and better than Singapore!
If the Nordic countries are able to achieve all these at only a small fraction of the cost of the Singapore politicians – at only 11% to 16% of what we pay to the PAP politicians, to be exact – then what does it say about the PAP politicians? Are they so inefficient? Are they that unproductive? Are they not able to achieve similar outcomes as the Nordic countries with low costs?
The Neglected Welfare of Singaporeans
But that’s where the similarities between Singapore and the Nordic countries end. As discussed, Singapore is more expensive to live in than Denmark, Finland and Sweden. Not only that, what’s worse, according to the Mercer’s 2012 Cost of Living Survey, Singapore is the 6th most expensive city out of 143 cities in the world, whereas the other cities in the Nordic countries are much cheaper to live in, at 18th for Oslo, Norway; 21st for Copenhagen, Denmark; 46th for Stockholm, Sweden and 65th for Helsinki, Finland – yet Singaporeans earn much lower wages while having to live in a much more costly city. Not only do Singaporeans earn the lowest wages among the high-income countries, we also work the longest hours in world. It is no wonder why Singapore is ranked as having the 2nd highest work stress in Asia, which has also resulted in Singapore having the lowest fertility in the world – out of 224 countries. Interestingly, we also have the 2nd lowest libido, as compared to over 40 countries.
Thus when surveys such as the Gallup rank Singaporeans as having the least positive emotions, most emotionless and least optimistic, where the Happy Planet Index ranks Singapore at 90th – most unhappy, and the World Happiness Report 2013 ranks singapore as the 126th (most unhappy) and 144th (most emotionless), it is clear why Singaporeans have become so repressed in our emotions. Indeed, the amount of trust among Singaporeans has so far diminished that Singaporeans are second least likely to help a stranger, out of 135 countries.
It is thus not a coincidence that Singaporeans feel so restrained – we are rated only partly free at 4 out of 7 for political rights and civil liberties (where 1 is most free) by Freedom House Freedom in the World 2013 Index, and 81st on The Economist Democracy Index 2012, and it does not help that our media is not free – we are ranked 149th out of 175 countries by the 2013 Reporters Without Borders Worldwide Press Freedom Index 2013, and 153rd by the Freedom House Freedom of the Press 2013 Index.
In comparison, the Nordic countries score much better in all these indicators, and not only that, but top of the class in most as well – they work one of the shortest hours in the world and have one of the highest fertility rates among the high-income countries. They are also one of the happiest and freest countries in the world. Yet, they continue to be one of the richest countries in the world, and with one of the most vibrant economies.
Indeed, why are Singaporeans forced to pay the PAP politicians such immensely-inflated wages for such lopsided and disastrous performance? For a nation where our people’s psychological well-being are so heavily compromised and where the social environment is increasingly being unsettled, can Singaporeans still put their trust in a government which knows how only to pay itself such high wages, but perform so poorly in so many indicators which are the true measure of the people’s welfare, and which have been so sorely neglected by the PAP government?
Does Singapore Need Cheaper, Better, Faster Politicians?
Lim Swee Say had been a strident advocate for Cheaper, Better, Faster workers. Perhaps PAP should take a leave out of their own minister without portfolio, and also advocate to become Cheaper, Better, Faster politicians.
Indeed, the Singapore prime minister had said that, “what elected ministers are earning – representatives of the people, serving the people … (are) being paid out of the taxes of the people.” He had also said that, “others may be unhappy that the ministers decide their own salaries”. And the fact of the matter is this – if the PAP politicians are able to function based on the effectiveness and cost savings that the politicians in the Nordic countries are able to do so, we would be able to save about $10 million annually – tax payers’ monies which can go to more useful causes, such as to increase the wages of of low-wage Singaporeans, which are the lowest among the high-income countries.
The Singapore prime minister had also said that, “there are the concerns that highly paid political leaders would lose the ethos of caring for Singaporeans first as their main motivation and priority, and may lose touch with the problems of average families”. But when you look at the low wages of low-wage workers in Singapore, and of the average Singaporean, do you think the politicians are indeed out of touch? Has the excessively-high salaries got into their heads?
Indeed, when the Singapore prime minister had said, “if you have the wrong system of pay, you will have the wrong team,” Singaporeans are now asking the exact same question – has the “system of pay” created a “wrong team” in Singapore?
Have The PAP Politicians Met Their Performance Indicators?
Under the white paper to review the ministerial salaries, it was proposed that “four socio-economic indicators” be used to determine the “National Bonus” to be paid out. Of the indicators, two of them pertain to the real median income growth rate and the real growth rate of the 20th percentile income.
And if you look at a report by the Lien Centre for Social Innovation and SMU School of Social Sciences, it found that from 1998 to 2010, “the real median incomes of employed residents in (the bottom 20 per cent of employed residents fell) by approximately 8 per cent.” Also, “workers’ real median wage growth was negative over the last 5 years or so“.
Indeed, this cannot be even more apparent when you look at the chart below – from 1998, you can see that the real median monthly income for the bottom 20% income earners has actually dropped from $809 to $749 in 2009.
Chart 6: The Straits Times
And if indeed the PAP politicians are supposed to ensure the growth of the real median income growth rate and the real growth rate of the 20th percentile income, then why are we paying them such overly-inflated wages for such unsatisfactory performance?
If the real wages of Singaporeans aren’t growing, should the wages of the PAP politicians be severely cut back down for their poor performance? Indeed, was it not the Singapore prime minister who had said that, “if a Minister is negligent or dishonest, then of course, he has to be sacked.” In not meeting two of the four performance indicators, has the PAP politicians been “negligent”?
Finally, could the problem be that ministerial pay is pegged to the “60% of the median income of top 1,000 Singapore Citizens income earners”? A look at Chart 6 would show that the real median monthly income of the top 20% earners have grown. The Lien Centre for Social Innovation and SMU School of Social Sciences had also reported that “incomes of those in the top 20 per cent (had) increased by 27 per cent” from 1998 to 2010.
Indeed, does it make any sense when there are 23% of Singaporeans who are earning below $1,500 and who have seen their real wages drop, when the PAP ministers and MPs belong to the top 5% of the earners in Singapore, and where the ministers would most probably belong to the top 1%? When commenters suggest that the ministerial pay should be instead pegged to the median income of the bottom 1,000 Singapore citizens income earners instead, do they have a logic that is more sensible?
The Cracks Are Finally Beginning To Show
The chronic problem of the low-wage situation in Singapore has drastic effects, as they are beginning to show in the strike, riot and protests held across the whole of this year. Such sentiments of discontent have been simmering among Singaporeans and workers in Singapore for some time now, and as many observers have rightfully pointed out, the lid might finally begin to blow off.
The Singapore prime minister has shown poor judgment when he had 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.” Such disconnection from the reality on the ground has been constantly portrayed by him, as when he had also said that, “poor people are not poor by any international standard“.
Such a belief cannot possibly be sensibly uttered by the head of Singapore’s government when the statistics show that Singapore would most probably have the highest poverty rate among the high-income countries and even among countries in the region.
The detachment that the PAP politicians have shown has only further alienated Singaporeans from them. Low wages, compounded by the colossal wage disparity between the rich and the poor have only further isolated the poor from believing in the government that they had voted in to protect them for.
For disenfranchised low-wage foreign workers who have no rights to representation or union protection, the effects of such underlying tensions are the first to blow. It would be wise to not take the issue lightly by attributing the problem to the over-consumption of alcohol or ghettoisation. Failure to understand the deeper reasons as to the strike and riot would be failure on the part of the government to understand the needs of the populace and anticipate the problems early on, so as to be able to responsibly and amicably resolve them.
