Respected Swiss bank UBS recently released the results of its
worldwide study titled “Price and Earnings 2009″ – and perhaps
unsurprisingly, Singapore received a very unflattering report
card.
While the World Bank reports that our economy has the highest
per capita GDP (PPP-adjusted) in Asia at $49,288, our people do not
enjoy a quality of life commensurate with these statistics. In
fact, according to the UBS study, some indicators suggest that
Singaporeans are not much better off than those in Third World
countries.
Low wages
While Singapore has a GDP (PPP) per capita that is higher than
that of Switzerland, we are far below the Swiss when it comes to
wages.
The UBS study found that employees in Copenhagen, Zurich, Geneva
and New York have the highest gross earnings. With its extremely
high gross wages and comparatively low tax rates, Switzerland is
one of the most employee-friendly countries in the world. The net
wages used have been deducted for taxes and social security.
Zurich and Geneva have wage indices (gross) of 119.8 and 107.5
respectively. In contrast, Singapore has a wage index of only 31.3,
comparable with Moscow (30.9), Tallinn (28.7) and Johannesburg
(26.7)
In the Asia-Pacific region, Singapore is exceeded by Tokyo
(83.0), Sydney (74.1), Auckland (44.1), Hong Kong (42.3), Taipei
(35.5) and Seoul (32.3) Low domestic purchasing power Where does an
average income buy the most products and services? Wages alone do
not determine the standard of living in a particular city or
country.
A better way to measure prosperity is to divide the average
annual salary by the total price of a selected basket of goods and
services (as used in the UBS study). This tells us how much
purchasing power local wages have.
Again, Zurich (106.9), Sydney (95.9) and Luxembourg (95.4)
topped the list?. Its citizens have the highest domestic purchasing
power.
Singaporeans have a low purchasing power of only 39.9, comparable
to Kuala Lumpur (39.5), Warsaw (34.0) and Bogota (33.7).
Other countries in the Asia-Pacific region which are ahead of us
are Tokyo (82.2), Auckland (68.9), Taipei (58.9), Hong Kong (58.1)
and Seoul (57.4).
In other words, though the cost of living is higher in Tokyo,
the average Japanese has a domestic purchasing power more than
twice that of an average Singaporean. Though Malaysia is
still a developing country and has a GDP (PPP) per capita of only
$14,215, less than 3 times of ours, the ordinary Malaysian citizen
has about the same domestic purchasing power as the
Singaporean.
Long working hours
People work an average of 1,902 hours per year in the surveyed
cities, but they work much longer in Asian and Middle Eastern
cities, averaging 2,119 and 2,063 per year respectively.
European cities had the lowest working hours per year. A global
comparison showed the people in Lyon and Paris spend the least
amount of time at work: 1,582 and 1,594 hours respectively.
Singaporeans spent on average 2,088 hours at work per year with
11 days of vacation.
This is less than Hong Kong (2,295) and Seoul (2,312), but more
than Tokyo (1,997), Taipei (2,074), Sydney (1,747) and Auckland
(1,884). Singaporeans also took the least number of holidays
after Hong Kongers (10 days/year).
High cost of living
Singapore was ranked the second most expensive place to live in
after Tokyo, surpassing Hong Kong for the first time. Let us
compare the food prices in Singapore and other developed countries,
since food is a basic necessity.
In the UBS study, a basket of 39 food items is put together and
weighted mainly according to Western European consumption habits.
The average worldwide cost of the basket is USD385. In Asia, Tokyo
topped the list with an index of 124.7, followed by Hong Kong
(96.5), Singapore (89.4), Seoul (89.0), Taipei (67.9) and Sydney
(66.3)
Conclusion
The high cost of living coupled with low wages and domestic
purchasing power condemns the average Singapore worker to an
ignonimous, monotonus and stressful working life. Singapore workers
have to work harder to earn the same amount of money and save for a
longer period to purchase the same product.
In 1991, Goh Chok Tong, then the Prime Minister, promised
Singaporeans that we would be able to achieve the “Swiss standard
of living” within a decade. Ten years later, we have a living
standard which is closer to Russia than Switzerland. Like
Singapore, the Russians has a low wage and domestic purchasing
power and Russia, especially the city of Moscow, has one of the
highest cost of living in the world.
Yet, in 2001, during his National Day Rally speech, Mr Goh
said:
“I was also quietly satisfied that we realized our
vision of reaching the 1984 Swiss standard of living last
year.”
Have we really achieved the Swiss standard of
living?
Though, we do not have economic indicators for Switzerland in
1984, we have the figures in 2009 and it appears that Singapore is
heading towards a Russian standard of living, rather than
Switzerland’s. Let us compare the indices for each category:
Singapore Moscow
Zurich Wage Level 31.3 30.9 119.8 Domestic
Purchasing Power 39.9 49.4 106.9 Amount of hours of work required
to buy an iPod Nano 27.5 36.0 9.0 Price of Services 72.5 65.0
110.9
As the above figures have shown, the Singapore worker has more
in common with the Russian worker than a Swiss worker. Like the
Russian worker, the Singapore worker has low wages and domestic
purchasing power which is aggravated by the relatively high cost of
living in their respective countries.
In fact, the Russian worker has a higher domestic purchasing
power than the Singaporean worker though his wage is slightly
lower. And don’t forget Russia is a vast country. If one cannot
survive in Moscow, they can move to the countryside where cost of
living is lower. There is nowhere for Singaporeans to move to.