The truth behind wages in Singapore

 

If you had taken a look at charts from CPF recently, you would have been frightened.

cpf

CPF tells us that 17% of Singaporeans are earning less than $1,000

Now take a moment and soak in that number: 17% of 3m Singaporeans is a staggering 510k individuals earning less than $1000. (*See below for an appended remarks on this statement*)

This would mean that nearly a fifth of our population are low-wage earners. Common sense would tell you this is far from the truth.

These statistics are derived from CPF contributions. Why do some people chose to contribute so little to CPF? Here are a few common reasons:

  • To build credit history with minimum contributions,
  • To take home more salary,
  • To create more headcount to hire more foreigners (we won’t go into detail how this is done, just know that it is common practice),
  • Small business owners/ freelancers who want more control of their money

So, getting your statistics from CPF contributions is inaccurate.

A better gauge would be through the Department of Statistics.

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105,000 families earn an average of $1500 per month.

According to FB page “Singaporeans Against Poverty”, they have decided that $1500 is the threshold of poverty for Singaporeans. We will not argue with the premise of that number, but rather, would like to look at how the country has helped workers of this demographic – the vulnerable workers.

At the heart of all low-wage work being done, the most basic is that of the Progressive Wage Model.

It is a myth that Singapore is against the minimum wage. The Progressive Wage Model (or PWM) is a piece of policy that directly contradicts this accusation. At the heart of it, PWM wants employers to not just pay a good base salary, but also to incorporate a career/wage progression ladder to ensure that low-wage workers do not stay low-wage workers for the rest of their lives.

And in the recommendation of base wages, the PWM does not demand salaries that are too far fetched from reality. The following is a table that compares PWM and MOM Median wages.

table(Progressive Wage recommends paying MORE THAN the market median norms)

The purpose of this base recommendation/requirement is really to target villainous employers who are out to exploit the vulnerable workers.

Then there are programs such as WorkFare. Depending on your age/income/property configurations, if you earn up to $1900, you could be entitled for up to $1400 of assistance.

There is also ComCare assistance and just today, I have read that Government will fund fare concessions for lower income commuters.

All this excludes the vast amount of training, training grants, industrial grants and a myriad of other initiatives designed at improving the value and worth of a worker. To do all these require industry, economics and good employers to be in Singapore.

PM Lee had famously said “…if I can get another 10 billionaires to move to Singapore and set up their base here, my Gini coefficient will get worse but I think Singaporeans will be better off, because they will bring in business, bring in opportunities, open new doors and create new jobs, and I think that is the attitude with which we must approach this problem.” (http://www.todayonline.com/singapore/pm-getting-politics-right-critical-spore)

Is that too harsh a thing to say?

Perhaps, but let us compare with this famous rebuttal from Margaret Tatcher in reply to the Opposition’s criticisms on income inequality: “…They’d (the opposition) rather the poor be poorer provided the rich are less rich”

MT

(“…They’d rather the poor be poorer provided the rich are less rich”)

 

 

Sources:

On household income: http://www.singstat.gov.sg/Publications/publications_and_papers/household_income_and_expenditure/pp-s19.pdf

On median wages, by MOM: http://www.mom.gov.sg/Documents/statistics-publications/wages2011/mrsd_2011ROW.pdf

On CPF contributions: http://mycpf.cpf.gov.sg/NR/rdonlyres/0BEA7777-3527-40B2-BBEA-05E9A73AF38E/0/Annexes.pdf

On the Progressive Wage Model: http://www.ntuc.org.sg/wps/portal/up2/home/areasofinterest/spotlight/spotlightdetails?WCM_GLOBAL_CONTEXT=/content_library/ntuc/home/about+ntuc/newsroom/news+highlights/c3aea2804d87d280a987afc7b9d67807&levelsFromSpotlight=1

 

Appended:

Reader Ken Meals made a comment on the 17% who earn less than $1000:

The 17% you gleaned from the CPF site is the correct number of sub-$1000 CPF contributors, but the total CPF Membership in the chart you got that data from was 1,735,422 CPF members and was actually 294,364 employees. Not a population of 3 million and a staggering 510K employees. Huge difference!

Of the 264,364 employees who earn sub-$1000 monthly incomes, we don’t know how may of them are students? or Parttime employees, e.g.,housewives/retirees who work less than 4 hours a day or 35 hours a month. There are 80K CPF members in the 264K that earn less than $400/mo. These are almost assuredly part timer, probably a goodly portion of the group from 400~800/mo are as well. But if we disregard them as well then we are talking 264-80K or 184,000 employees. The percentage drops to 10.6% of the CPF roles OR only 5.7%of your 3.2 million population. The numbers goes down even lower if you remove the Phantom Workers (although the CPF board has just about shut that down – albeit it still happens occasionally. 

 

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About the author

Tay Leong Tan

Tay Leong Tan is a collective of 3 writers. Tay, Leong and Tan. (Who were you expecting?!) We are enthusiastic about labour issues, economics and current affairs in particular.

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