This is the Class Divide that MM LKY claims to be
inevitable.
While the PAP will insist Singaporeans accept that the
"Age of the Iron Rice Bowl" is over, LKY will
scheme and manipulate the system to ensure for his own and his PAP
cronies to enjoy the "Age of the Golden Rice
Bowl" will last forever.
The Business Times senior editor, editor and reporter
had better start planning a new career, or begin to look for a new
employer.
News: The Straits Times
- 20 Oct 2009
HAVING a minimum wage in place here to narrow the income gap
could do more harm than good, Minister Mentor Lee Kuan Yew said
last night.
In fact, every country that has set a minimum wage over what the
market will bear has found that the move cuts jobs, he noted.
Employers who are forced to deal with higher staff costs would
simply find ways to hire less people.
That is why Singapore's approach has been to create as many jobs
as possible, while leaving the market to decide the right level of
pay. The rationale for this is that having any job is better than
having no job at all. 'Never mind your Gini coefficient. If you
don't have a job you get zero against those with jobs. So our first
priority is jobs for everybody,' he said.
The Gini coefficient measures the income distribution across a
country and is often used as gauge of the income gap.
MM Lee was responding to a question about what Singapore could
do to narrow its income gap. Mr Elvin Ong, a fourth year social
sciences and business student from the Singapore Management
University, had asked him what Singapore could do to help its
bottom 20 per cent.
The gap between the haves and have-nots is a recurrent political
issue in Singapore and there have been concerted efforts by the
Government to do more for the low income group.
Singapore's Gini coefficient fell from 0.489 in 2007 to 0.481
last year, a mark of a narrowing income gap. If government benefits
are taken into account, the figure is further reduced to 0.462.
Yesterday, the Minister Mentor stressed, however, that the
problem of a widening income gap is one that most countries - not
just Singapore - have to contend with.
And it may be that such a split is inevitable in a globalised
world. Global competition, he said, both depresses wages at the
bottom and boosts wages at the top.
At the low end, he said that salaries of unskilled workers would
be kept low because of competition from cheaper alternatives in
places like China and India.
Meanwhile, at the higher end, workers being deployed to oversee
foreign operations will naturally attract higher pay and perks like
expatriate allowances.
An example of this sort of competition can also be seen in the
United States, he said, where a lot of lower-end jobs have been
outsourced to cheaper nations.
And though there was talk of passing laws to ban such
outsourcing during the last US presidential election campaign, he
felt that such a law would mean 'hobbling their own
entrepreneurs'.
Said MM Lee: 'If you pass that kind of legislation and you don't
go abroad, but your competitors go abroad to lower-cost countries,
your markets will shrink.'
The inevitability of an income divide was a theme he returned to
later in the night when another student asked him if he was worried
about a social class divide appearing in Singapore.
That was unavoidable in a maturing society, he said.
Here, MM Lee cited the example of China. The country, he said,
started as a classless society but has gradually evolved to favour
those who have the right connections.
He explained: 'The communists started with a classless society.
They chopped off the capitalist land owners and so on - literally
chopped off their heads.
'But in China today, you have the leaders and you have the
princelings... They're well-educated, well-connected.'
He pointed to the family of former Chinese premier Li Peng, who
now controls the country's energy sector. His daughter Li Xiaolin
is chairman of China Power International Development, an
electricity monopoly. His son Li Xiaopeng used to head Huaneng
Power, another energy heavyweight.
Said MM Lee: 'They probably deserve the job. But if they were
not well-connected, they may never be recognised. China is a big
place, so you need to be recognised, otherwise you're just one of
one thousand and three hundred million Chinese.'
- end of ST article
