Think Centre 2007 New Year Message

Posted by under Editorial on 3 January 2007

Singapore needs to bridge the widening societal divide in the coming years. To ensure redistribution of wealth Singapore needs to create decent jobs with due respect to Core Labour Standards.

Think Centre: 2007 New Year Message

This 2007, Think Centre (TC) supports our government's efforts to drive our economic growth but cautions it on the efficacy of its socio-economic programmes to bridge the widening societal divide. As Singapore becomes a global city teeming with opportunities and foreign talent,TC urges this government empowered with Singaporeans' mandate to deliver its promises and repay the electorate's faith through the following:

I) Redistribution of Wealth: Implement Core Labour Standards to ensure decent work
- Uplift the 300,000 Singaporeans who earn less than $1,200 a month
- Reduce the level of poverty, in measureable ways, among the 300,000 working poor

The problem facing Singapore is low wages for the lower-skilled and older workers depressed by the influx of more and more foreign labour on work permits. Pursuing a low-wage policy with cheap foreign labour only dampens the wage rate of the lower-skilled workers and harms the productivity growth of the economy.

In addition, what we will see in the globalised economy is a lot of employment transition, job insecurity and labour flexibility, that widens the income gap between the rich and poor.

In 2005, the resident unemployment rate had risen from 3.4 to 3.8 per cent, with 87,600 Singaporeans and permanent residents unemployed. Today, the official unemployment rate stands at 2.7 percent. Singapore needs to implement a comprehensive safety net that supports workers including unemployment insurance, government-funded health insurance, and public assistance.

An effective safety net would ease the pain and, by so doing, speed up the adjustment.

II) Need for minimum wage - Introduce minimum wage policies and any other effective measure to reduce the number of working poor

The purpose of minimum wage is to protect vulnerable low wage workers from exploitation and poverty.

Its application could be restricted to a limited number of low-paying sectors or to selected categories of vulnerable workers. Minimum wage can became a key social policy tool to protect low-skilled workers by setting a wage floor below which no payment should be made. Without the minimum wage the "working poor" will remain poor.

We need effective solutions not "short-cuts" that look good but without meaningful answers to the daily problems faced by the "working poor". Political will is needed to reduce the level of poverty, in measureable ways, among the 300,000 working poor by introducing minimum wage policies and any other effective measures.

III) Increasing socio-safety net for Professionals, Managers, Executives and Technicians (PMETs)

In the last quarter, for instance, 37% of those who were retrenched were PMETs and, once retrenched, PMETs who are above 40 years old find it a lot more difficult to get jobs within the six-month period, ie, the benchmark we use to determine whether a person is considered as a long-term unemployed or not. Older PMETs need help job placement and retraining, as their skills can also become obsolete over time. Currently, the Skills Development Fund does not apply to them, yet there are no initiatives to help reskill and retrain those PMETs to prepare them for jobs in sectors that need workers.

IV) Need to review 'elitist-minded' meritocratic policies:

In the last five years, one in three students on government scholarships came from families with incomes of more than $10,000 a month, while such families make up just 13 per cent of all Singapore households. Students from households on incomes of less than $2,000 made up only 7 per cent of scholarship winners.

As GST increases are permanent, offset packages have been one-off regretably. Since May 2006, almost all the increases have been non-government fees, such as electricity, taxi fares, electronic road pricing (ERP), higher food prices due to food centres upgrading, bus and MRT fares, university fees, postage, etc. All these - as well as other goods and services - are expected to increase to pass on the GST increase to consumers, as has happened in the previous GST increases. So, any one year freeze in government fees, may be dwarfed by increases by the private sector.

TC submits the above 2007 wish-list to our first-world government for their consideration. A first-world government lives up to its word and delivers its socio-economic goods to the people without fear or favour, regardless of race, language or religion. Else, how can this global city of opportunities be truly called home to Singaporeans when our opportunities are limited?

TC wishes one and all, talents local and foreign, a Happy New Year.

Majulah Singapura!

Sources and Relevant Links:

Think Centre Is Singapore an inclusive society? 06 December 2006

Think Centre Industrial peace must be achieved with justice! 01 December 2003


Think Centre Is Human Rights on your New Year wishlist? 27 December 2003


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