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  • Writer's pictureThe Convergence

Income inequality in Singapore: of haves and have-nots

Commentary | Srirekam Yasumi Jayram, Event Associate Editor

Singapore is often cited in global surveys and reports as one of the world's richest nations. For instance, the International Monetary Fund (IMF) reported that Singapore was the third richest country in the world in 2018.

Even Singapore’s Gross Domestic Product was the fourth highest in the world, at SGD $124,600 in 2017.

Furthermore, the Economist Intelligence Unit (EIU) has ranked Singapore as the world’s most expensive city consecutively for four years since 2014.

As the waves of the Fourth Industrial Revolution and globalisation surge forth, some will inevitably be left behind. Across the globe, the gap between the wealthy and the poor is widening. It is little wonder that the issue of social inequality proves such a lightning rod for pundits, politicians and voters across the political spectrum.

The issue of income inequality is more important to look at now than ever.

In 2018, the Department of Statistics in Singapore reported that the value of the Gini Coefficient, the economic tool used to measure income inequality, has remained unchanged between 2016 and 2017. This reflects a pressing problem plaguing Singaporean society today: income inequality remains a pertinent concern.

The Singapore government champions a system of “trampolines” that balances both personal and governmental responsibility. Some of the measures currently implemented by the Singapore government include providing access to opportunities for those from lower-income backgrounds, investing in education and creating programmes.

These include the SkillsFuture and the Progressive Wage Model to support the upgrading of skills, implementing policies to monitor taxation and wages, and ensuring social security through the Central Provident Fund (CPF) and subsidized health.

Yet, with Singapore ranking 149 out of 157 countries in Oxfam’s controversial Commitment to Reducing Inequality (CRI) Index 2018, there have been renewed calls for the government to provide more aid to low-income families. Thus, we should rethink and evaluate the extent of governmental intervention in Singapore, while considering potential unintended consequences of greater aid, such as higher taxes.

Beyond economic aid, we should also examine the appropriateness of other mechanisms used to uplift the poor and ensure social mobility.

In 2018, both Singapore’s Prime Minister Mr Lee Hsien Loong and Minister of Law Mr K. Shanmugam gave speeches on income inequality in Singapore. Also mentioned were various government interventions implemented.

Some of the measures to reduce income inequality include transfers to lower-income groups exemplified by the Workfare Income Supplements, healthcare subsidies, and substantial housing subsidies – which have helped lower-income families to move from rental flats to modest home ownership, to bigger homes.

Other measures to ensure social mobility include access to quality education, education bursaries, and SkillsFuture – where billions are being spent to ensure that Singaporeans continue to upskill.

The government also ensure social integration through urban planning and public housing policies such as distributed access to good schools, healthcare, parks and recreation across the island, and designing shared spaces within our neighbourhoods, such as the playgrounds and parks, shopping malls and hawker centres, and sports facilities, in order to maximise social interactions.

In my opinion, the government has been actively trying to mitigate income inequality with holistic interventions to cover all grounds. It is commendable that they have thought about addressing income inequality directly through reducing it, and indirectly through ensuring future generations will not have to face it as adversely as their parents.

However, the impact of these policies in helping to alleviate income inequality is relatively weak.

By providing access to education, which acts as a social leveller, income inequality can be reduced. But what kind of education is needed? Singapore claims to provide quality education for all, but schools are centred on a top-down culture of a one-size-fits-all curriculum and rigorous streaming based on standardised exams.

The classroom results in a system that borders on a caste system of sorts.

Merit-based streaming is applied at the age of 10, when the truth is that the talents of many of these young children are yet to blossom. This has instilled the obsession with grades of students and parents, and the focus on obtaining skills is not emphasised on.

There have been improvements to the education system by the government, but they seem to be in vain as students has been conditioned to just get good grades in order to excel in school. Those who are unable to study as well as their peers will fall behind and eventually lose out.

In anticipation of the rising economic insecurity and inequality brought about by the digital revolution, many countries around the world are considering giving their citizens a universal basic income (UBI), regardless of how wealthy they are or whether they are working. Experiments have been implemented in countries like Finland, the Netherlands, Kenya, Canada, and the United States.

With a system that does not require the monitoring of how the money is spent, some argue that the UBI may be more cost-effective and less bureaucratic than traditional forms of welfare.

Also, others have suggested that if set at appropriate levels, UBI actually may motivate people to find more meaningful work.

However, in a society as conservative as Singapore’s where people need to be employed to qualify for the Workfare Income Supplement (WIS) for low-wage workers, we need to consider how palatable the UBI would be to Singaporeans from all walks of life.

Furthermore, representatives can also consider other alternative forms of assistance that perhaps would better suit Singaporeans, such as a minimum-wage.

In “This Is What Inequality Looks Like”, Dr. Teo provides an alternative approach to analyse social inequality.

While the government and many economists use data and statistics to comprehend and craft solutions, Dr. Teo posits that studies of inequality are also experiential.

Perhaps the best way to understand poverty, income inequality and other ills that trouble Singaporean society is a holistic one: one that melds both quantitative and qualitative approaches.

Numbers and narratives are insufficient alone; what we truly need is to tap on the synergy that they offer together. She succinctly argues that “everyday experiences of inequality are crucial for shedding light on how it is enacted and the price paid by people low on the social hierarchy.”

Policymakers, politicians and the public would undoubtedly gain a deeper, more nuanced understanding of poverty in all its complexity by walking a mile in the shoes of their peers.

This is about the Singapore we are, and the Singapore we want to be. Are we a nation of haves and have-nots, or a nation of equal opportunity and possibility?

Does a one-size-fits-all solution exist? Can the issue of income inequality ever be resolved?

The answers for these perennial questions elude us (for now). Even so, the quest to find the answers to these pressing concerns is a noble one.

Far from quixotic, it is our hope and empathy for our peers, regardless of their socio-economic status that makes this pursuit a worthy one.

The matter of income inequality is so much more than a book, a statistic or a policy.

This is about the Singapore we are, and the Singapore we want to be. Are we a nation of haves and have-nots, or a nation of equal opportunity and possibility?

Are we truly divided by class, or can we look beyond our self-interests and differences to help our peers?

Are we going to resign ourselves to a damning fate of inequality and division, or are we forging bonds and a better future together?

I know my answer. What about you?


About the Author: Srirekam Yasumi Jayram is a first-year Political Science major, Communications and New Media minor, from NUS Faculty of Arts and Social Sciences. She now serves as the Associate Editor (Events) of The Convergence. Besides spending most of her time to catch up on readings, she takes cardioaerobics classes, plays with her dog, watches movies and hangs out with friends.


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