Written by Ng E-Jay
21 October 2009
During a dialogue held at the National University of Singapore
on Monday night, Minister Mentor Lee Kuan Yew said that a social
class divide was inevitable in a maturing society like
Singapore.
He was responding to pre-planted questions
raised by a couple of students who had asked him what Singapore
could do to narrow its income gap, and if he was worried about the
growing social divide.
A social divide may be inevitable in Singapore, but what MM Lee
does not acknowledge is that a lot of it is in fact caused by PAP
policies that favour Big Business and the elites, and not merely
due to the unstoppable tide of globalization.
MM Lee argued that global competition depresses wages at the
bottom and boosts wages at the top. If so, then it must be the
responsibility of any Government to redistribute the spoils of
capitalism through enlightened policies, including the creation of
a comprehensive social safety net for the poor and
underprivileged.
In Singapore however, the ruling PAP Government exacerbates the
problem by indiscriminately importing huge numbers of low skilled
foreign workers in order to boost GDP growth and enable large
corporations to fatten their bottom lines.
This has led to wages at the lower end of the spectrum remaining
depressed for well over a decade and has created a continuous cycle
of hardship for the working class who have not only had to deal
with increasing inflation from policies like GST, but also find
themselves having to compete on equal terms with those who do not
need to serve National Service or service the mortgage of an
expensive flat in Singapore.
Our immigration and pro-foreigner policies which are meant to
shore up population growth and counter our low birth rate also have
the potential to create many social problems. The sudden influx of
large numbers of foreigners who have not had sufficient time to
adapt to the local culture (and who have not necessarily
demonstrated sufficient willingness to do so) cannot be good for
any society. This is not 19th century Singapore we are talking
about here, where the population base is still tiny and large areas
of the island remain uncultivated.
MM Lee also argued against a minimum wage, saying that it would
do more harm than good, because employers who are forced to deal
with higher staff costs would simply find ways to hire less people.
He mentioned that every country that has set a minimum wage over
what the market will bear has found that the move cuts jobs.
It has always been the opinion of this website that such
simplistic arguments fail to take into account the responsibility
of a Government to provide for its citizens by making sure there is
always a level playing field for all. Such arguments also neglect
to consider the unique circumstances Singapore is in and the failed
economic policies of the PAP.
Firstly, what is the logic in avoiding a minimum wage policy in
order to keep staff costs down, but yet allowing other cost factors
like office rentals to balloon out of control, as what has happened
in recent years?
Secondly, the entrenchment of GLCs in our economy has crowded
out many small and medium enterprises over the years and has made
our economy uncompetitive. Isn’t it far more logical to promote job
creation and enterprise by doing away with this top-down,
cronyistic approach to economic management?
The institution of a minimum wage in Singapore would not
necessarily lead to businesses relocating their operations, because
countries like China, India, Vietnam and Thailand have much lower
cost structures even without us having a minimum wage. If
businesses wished to relocate due to cost factors, they would have
done so already, with or without minimum wages for employees.
Ultimately, I believe the question should boil down to the kind
of society that we are trying to create and the kinds of businesses
and models of free enterprise that we should encourage in
Singapore. If a business or a corporation has to close shop simply
because it is compelled to pay a minimum wage to its workers,
perhaps we should ask if this is the kind of business or enterprise
that we would like to see flourishing in Singapore. Shouldn’t we be
compelling private enterprise to move up the value chain and reduce
their dependence on cheap labour?
The Government believes that it is more practical to assist low
income workers through tax relief or direct cash subsidies instead
of instituting a minimum wage. However, these measures have thus
far been quite ad hoc, and it is not clear whether low income
families have been sufficiently helped by the Government in this
regard.
Much more needs to be done to help our working class citizens
secure jobs and lead a decent life, beginning with eliminating GST
for essential items like food and giving them a head start in the
job hunt against foreigners who neither have to serve National
Service nor support their families in high-cost Singapore. In my
view, a minimum wage would also go a long way toward helping them
and would not be detrimental to our economy.
The Government has pursued a “growth at all cost” model of
economic management that relies on the heavy import of foreign
labour to depress wages at the lower end of the spectrum. This
model of economic management is clearly unsustainable given the
limits of population growth. It has benefited GLCs and
multi-national corporations whilst pushing working class citizens
into economic hardship and despair. Until such policies change, the
vaunted social cohesion that the Government keeps talking about
will never be fully realized.
Source: http://www.sgpolitics.net/?p=3656#more-3656
