Property Cooling Measures

On 16 September 2015, the Real Estate Developers’ Association of Singapore called for the government to reduce property cooling measures to prevent a collapse of the housing market. While the Democratic Progressive Party agrees that a market collapse is not desirable for anyone, we would also point out that it is in REDAS’ interest to keep housing prices high—but not necessarily for the rest of Singapore.

The DPP recognises that property developers are under enormous pressure. They need to sell off their remaining properties before they are charged huge taxes, fines and interest rates. At current market rate, some developers are already losing $100 to $200 psf sold. Such a loss margin is unsustainable for the industry, and one way for developers to recoup their losses is to ensure prices remain high by lifting cooling measures.

The property market in Singapore is complicated by the fact that Singapore’s property index has not reached its maturity or actual price. Singapore’s property prices are still behind those of Tokyo, Korea and Hong Kong. Should the status quo remain, developers stand to lose so much money that the smaller ones might be forced to close.

However, the DPP argues that such a broad-strokes approach would instead further distort the market and make things worse for Singapore. A more nuanced approach is required. We argue that Singapore should retain the Additional Buyer’s Stamp Duty (ABSD) to prevent property speculation and demand inflation. Lifting the ABSD wholesale would deprive people who need to stay in those properties, especially people whose income exceeds the income cap for a HDB flat.

The government could instead consider imposing the ABSD on Singaporean citizens only if they buy a third home. This would help Singaporeans buy up some of the excess supply on the property market. This would stimulate the economy and provide jobs in the sector and related industries, without unnecessarily depriving lower-income Singaporeans of housing.

As for permanent residents and foreigners , the government should retain the existing ABSD of 7% and 10% respectively. If possible, the government should also study exempting ABSD for permanent residents who have stayed in Singapore for a lengthy period of time,

Instead, Singapore should lift the seller stamp duty. This would allow homeowners who have overcommitted or have multiple properties to sell their properties earlier, even at a lower price. This would increase the affordability of housing in Singapore, and give property owners and developers an exit strategy should interest rates increase in the future.

Developers could also take additional measures to protect themselves. They could build smaller units. Such a move would reduce their cost, while making housing more affordable to Singaporeans, as the smaller size would reduce the maximum loan quantum and the resultant debt burden. This could enable people to actually afford a second home, increasing property demand. Alternatively, developers could change the manner of holding from freehold to 99 years and make their properties cheaper. This would present the market with a choice between a HDB flat and a condominium slightly smaller than the average condo, but also only slightly more than a flat. This would encourage people to buy more condos, easing the burden on the market for HDB flats and increasing demand for private property.

The government’s profits from land sales are channeled into the reserves or investments, and the DPP recognises that this is a prudent policy. However, with land so scarce in Singapore, the govenrment should also consider increasing the price of land to prevent reckless property speculation and ensure sufficient space for Singapore’s needs. The DPP also argues that a higher percentage of Singapore’s returns on these investments should go into providing grants and enabling low interest rates for the first homes of our citizens. While the government has previously increased Singapore’s housing grants, they are unable to compensate for the increased prices of BTO flats. We argue instead that the grants and prices of BTO flats should be pegged together. This would enable the sandwich class, in particular those with too high an income for HDB flats but too low an income to afford bona fide private property, to afford homes.

The formula for stamp duty should also be revised. Currently, the stamp duty uses a tiered system, with the first tier set at $100,000 and the second tier for the next $100,000, We note that there are very few properties today that can be purchased for under $200,000, rendering the formula obsolete.

Going a step further, the government should strive to decouple the public housing market from the private housing market. The government should take charge of the former to meet the housing needs of the average Singapore, while the latter should be governed by market forces. Currently, the HDB market enables an artificial hedge for investors in the private property market, as they can live in a condominium while renting out a HDB flat. This inflates the prices of the public housing market. The DPP calls for the HDB to revert to the earlier rule of requiring property owners to live in the HDB flat if they own both a flat and a condo, or else sell one of the properties. This would enable bottom-up correction of the housing market, normalizing the prices of the public housing.

Instead of outright abolishing property cooling measures, the DPP calls for more nuanced policies to correct the market. This would ensure that Singaporeans can continue to afford homes, that there would be increased choices in the market, and that property developers can continue to prosper.

Education and Youths Part 1 – Tilting the Education Pyramid

EXECUTIVE SUMMARY:

-Education in Singapore is arranged like a pyramid, from ITE to poly to university. ITEs feed to polytechnics which feed to universities. Jobs in society are also arranged like a pyramid, with jobs with ITE-level requirements at the bottom and jobs with uni-level requirements at the top. This creates the perception that people with ITE education are seen and treated as lesser than everybody else, and that the minimum qualification for a good job is a university degree.

-Singapore needs to tilt the pyramid, so that ITE, polytechnic and university are seen as different but equal educational pathways, leading to different jobs and sectors. We need to look at other successes like Sunrice, LaSalle and the UK Architectural Association, which are respected and manage to produce graduates whose skills are in demand and are seen as viable alternatives to public vocational training schools like Shatec.

-To jumpstart vocational training, Singapore can look at liberalising the educational industry to make more room for the private sector. Industrial associations can consider building specialised facilities and training centres to cater to their industries. This would enable training to have direct relevance to industrial needs, leading to increased employment. That in turn would mean increased pride in vocational skills training and industries will be able to take in fresh graduates, leading to a change in the educational landscape. Other options include collaborating with the civic sector and developing a wider range of educational pathways.

Last month, we spoke about the jobs pyramid: how high-paying jobs are reserved for an elite few with specialised high-level education, leaving everyone else below-the-pyramid to scramble for lower-pay jobs that need lower-level skills.

Where did this job pyramid come from?

It comes from Singapore’s education pyramid.

THREE PATHWAYS TO THE JOB MARKET

Singapore’s three post-secondary education pathways into the job market were planned to be separate and parallel, but unfortunately not equal.

The Institutes of Technical Education (ITE) provide basic vocational training like hairdressing and car repair; the polytechnics offer diplomas in specialised skills like horticulture and nursing, and the universities furnish students with an academic-oriented higher education.

Each of these three were meant to provide youths of different academic abilities, with different sets of skills that the economy requires, to provide them with jobs, and employers in the market with workers.

Although many do indeed join the job market from these three streams, in reality, students see themselves as being “streamed” into different hierarchical segments of society, from low-end low-skilled low-paid jobs at the bottom of the pyramid, to high-end high-skilled high-paid jobs at the top of the pyramid.

Jobs Pyramid 1 A UNIVERSITY DEGREE AT THE MINIMUM

The conundrum that results is that many students start to then work hard, in a hope to move from ITE to Polytechnics, or from Polytechnics to Universities, and those who don’t make it, enter the job market with a sense of being “lesser” than those who do make it up the education pyramid.

This creates the expectation that the only way to get a decent-paying job in Singapore, is to have a university degree, and a polytechnic diploma is at most second-best. ITE graduates are regarded as people with few job prospects and even less hope.

Over the past decade, many private educational institutions have also started to bring in degree programs from a whole host of foreign universities, and they are taking in ITE and Polytechnic graduates, giving them a pathway to a university degree, in a hope for a better, higher-paying job.

Jobs Pyramid 1

WHO WANTS THE LOWER-SKILLED JOBS?

Local Singaporean ITE and Polytechnic graduates entering into the job market start with lower-level jobs compared to their university-graduate counterparts.

Within the first 3 to 5 years, many of them sign onto a part-time university degree program, and hope to move up the education and job pyramid.

As young Singaporeans all do their best to move up the social ladder, who then stays in the lower-level jobs?

And how many of them are contented to perfect their vocational skills at their current job level, and take pride in their jobs and skills?

And as society and employers also see ITE and polytechnic graduates as “lesser” than university graduates, how many of them will want to remain in their jobs?

TILTING THE PYRAMID

We need to tilt the education pyramid on its side, so that the three tertiary systems and exit-points into the job market become not just separate, but also equal in status, each offering viable employment opportunities to their graduates in different sectors of the economy.

Instead of being ranked by employers and society from best-preferred to worst, the three educational pathways should be re-aligned so that they meet the needs and desires of different people, and what they are looking for in terms of a job and career.

Instead of being a feeder system into the next higher educational institution, ITEs and polytechnics should offer vocational training for viable longterm technical vocational jobs in the market that pay decent wages and offer attractive job and career development.

Similarly, secondary schools should present ITEs, Polytechnics and Junior Colleges as equal but different pathways into different job opportunities in the economy, and not present them as hierarchical options based on how good their secondary school results are.

The increasing number of secondary school students with good academic grades choosing to go to polytechnics instead of junior colleges is a strong signal in this regard.

Education Pyramid 2

VOCATIONAL JOBS WITH PRIDE AND A FUTURE

If we succeed in tilting the educational and jobs pyramid by its side, graduates from ITEs and polytechnics hopefully won’t see themselves at the bottom-of-the-pyramid, but will see a viable future in a vocational job, and be able to also enjoy decent “living wages”, and feel a pride in their work.

There are in reality many examples to learn from outside of the public education system. Sunrice GlobalChef Academy provides a suite of vocational training programs in culinary skills, from certificates to a degrees, that enable graduates to enter the food and beverage industry. The Architectural Association School of Architecture in London is one of the most prestigious and competitive specialist vocational schools of architecture in the world, having produced many award-winning architects who developed many radical design ideas.

Schools like Sunrice and the AA are well-respected for producing graduates whose skills are in demand, and are seen as viable alternatives to public vocational schools. Their graduates also have a strong sense of pride, and don’t compare themselves with those who graduate from traditional universities.

In contrast, however, SHATEC has much less prestige than Sunrice, even though it also offers culinary skills for the same F&B industry. Similarly, ITE College Central has begun to offer space design, but can it develop a strong sense of pride and recognition in its graduates?

What is it that makes private sector boutique vocational training schools in cooking, fashion, design, sports, etc, more successful at breaking down the sense of skills and jobs hierarchy, compared to our public school education system, that is still entrenched in a hierarchical pyramid of skills, qualifications and jobs?

JUMPSTARTING VOCATIONAL TRAINING BY THE PRIVATE SECTOR

To jumpstart vocational training, we need to understand why independent schools like Sunrice and AA succeed, whereas ITEs are still derogatorily labelled ‘It’s The End’.

In addition, instead of relying on the public education sector alone, industrial associations could also consider building specialised facilities and training centres to cater to their industries’ manpower needs, and to constantly update the curriculum in line with skills that are in demand. This ensures that training would have direct relevance to industrial needs, leading to increased employment among graduates.

This leads to a win-win situation. Fresh graduates would feel increased pride in their skills, now that they are confident that they can earn a living. Local industries, in turn, would be confident that fresh graduates would have relevant skills, allowing them to expand their respective sectors and take in more graduates without having to source for labour from elsewhere.

At the macro level, vocational training would then be seen as a viable education pathway, instead of a stepping stone to higher education levels – or the end of all hope.

LIBERALISING EDUCATIONAL OPTIONS

We can perhaps start by liberalising educational options in Singapore, and collaborate with the private sector (like businesses and industry associations) and civic sector (like clan and religious associations), to offer a wider range of vocational and professional skills training.

We can perhaps also encourage a wider range of educational pathways, parallel to the public education sector, that lead to a wider range of graduates with a wider range of skillsets to fill a wider range of jobs in the local economy.

And ultimately, we will hopefully kill the sacred cow of a hierarchical, elitist, meritocratic system based on academic grades and higher-education qualifications.

Skills Upgrading vs Jobs Creation Part 4: Online Responses

Over the past three weeks we have published weekly thought-pieces about jobs and skills creation in Singapore.

We have received various online replies from our readers, and responses we received included arguments that supported jobs creation over skills upgrading, and vice versa. We summarise the online responses below.

LOW UNEMPLOYMENT RATE – DO WE REALLY NEED MORE JOBS?

One of our very informed readers who is an expert in labour policy, replied to us saying that unemployment in Singapore is very low – currently 1.81% — and underemployment has also fallen from 4.2% in 2013 to 3.4% in 2014. There are also more vacancies than jobseekers, with 143 vacancies for every 100 applicants. He questioned the need to create more low-end jobs, and believed the issue is the need for higher wages, not more jobs, for lower-rung workers.

Another informed reader pointed out that, as the population becomes increasingly educated, underemployment will become an increasing concern, such as in Japan and the US. Our government has tended to focus on skills upgrading and high-end jobs, often leaving behind low-skilled workers.

PAY HIGHER WAGES

A reader who is an employer argued that instead of creating jobs, low-end workers should instead be paid more. This would make these lower-level positions more attractive to other low-skilled workers and allow them to earn more and make ends meet.

Furthermore, the government should still continue to create more high-end jobs, so that Singaporeans with tertiary education will be able to meet their aspirations of holding comfortable high-paying jobs.

RECOGNITION FOR THE POOR

On the other hand, other readers pointed out that this skills-upgrading argument does not address real-world concerns, such as the plight of the poor and marginalised in society.

The root of the problem lies in low-to-mid-end workers not receiving recognition and compensation like workers in the West do.

While the easy answer is to push to increase their salaries, it would also erode the profit margins of small and medium enterprises, many of which are already struggling to make ends meet.

Instead of merely emphasizing income, society should also celebrate craftsmanship and skills-relevance to the real world, making these jobs more attractive to people.

In addition, while skills upgrading may be useful, there is only so much a person can do before hitting physical, competency and learning limits.

LONG TERM EDUCATION AND SKILLS UPGRADING

The above views suggest that a holistic approach is required. A reader argued that in the short term, job creation would work, but in the long term, education and skills improvement is the best policy position.

Job creation would assist those who need immediate employment, while long term education helps workers to aspire to higher-paying jobs.

Further, in a rapidly changing economy, skills upgrading is necessary simply to remain relevant. A reader also argued that while the way forward may still lie in creating high-end jobs, the government should also create business opportunities for SMEs. When SMEs are self-reliant and able to survive, he thinks that other problems would then be able to solve themselves.

IMPROVING EMPLOYEE WELFARE

As Singapore moves into a shining future of high technology and increasing prosperity, another reader says we must also ask ourselves how to continue to improve the human condition and extend these blessings to all.

A reader noted that people tend to think of technology in terms of reducing staff by automating or outsourcing low-skilled jobs. This would only leave low-skilled workers behind.

Instead, we should think about how to put the person at the heart of an increasingly high-tech society and economy, and how we can use new tools and opportunities to help everyone.

SUMMARY

The online responses to our 3 weekly thought-pieces obviously show that it is not an easy choice between job creation or skills upgrading, between low business cost and decent wage levels.

Many have affirmed the Government’s Progressive Wage Model, which is as close to setting minimum wages as we can get, but feel that the Government is too slow and too hesitant in rolling this out faster and wider.

The “Catch-22″ of businesses used-to depressed wages and don’t want to see labour costs increase, versus the need to increase low-end wage levels to a decent “living wage” level, is a very real dilemma now.

And the policy solutions to deal with this dilemma are not easy, and we need more innovative and daring policy proposals.

We would like to thank all of you who read our posts, and especially those who replied to dialogue with us.

Our next-month weekly thought pieces will be on education and youths in Singapore. Please do give us your views and comments.

Skills Upgrading vs Jobs Creation Part 3: Why are Singaporeans not taking low-paid jobs?

DROP IN EMPLOYMENT

For the first time in five years, total employment in Singapore has shrunk.

As reported by TODAY newspaper recently, total employment figures have shrunk by 6,100 from the previous quarter. Almost three-quarters of workers retrenched in the first quarter of the year were professionals, managers, executives and technicians (PMETs), compared to one in two last year.

While this can be attributable to a variety of reasons, it seems that an education that focuses on PMET career paths is no longer the iron rice-bowl it used to be.

If white collar jobs are becoming scarce, people needing jobs should then turn to blue collar jobs. So the logic goes. Yet, Singaporeans are not keen on taking lower-paid blue-collar jobs. Why is this so?

WHITE VS BLUE COLLAR JOBS

On the surface, this seems to be a matter of job prestige. White collar jobs tend to be seen as superior to blue collar jobs in Singapore. They are higher up in the jobs pyramid, and more difficult to secure.

While demanding higher levels of education, PMET jobs also command higher salaries — and therefore social status.

Lower-end blue-collar jobs at the bottom-half of the pyramid do not pay wages comparable to white collar ones, and may not even be enough to live on or support a family in Singapore because of a lack of a minimum wage.

Singaporeans concerned with the rising cost of living and aspire to financial stability and social recognition compete for higher-level white-collar jobs, and feel embarassed having to look for lower-end blue-collar jobs if white-collar jobs are not available.

Singaporeans who hold low-paying jobs feel they are not respected by society, are not proud of their work, and struggle to make ends meet.

The government adds to this sense of social hierarchy of jobs by encouraging lower-skilled Singaporeans to upgrade their skills and apply for higher-end jobs. And those who don’t, or can’t, are seen to have failed, and are left behind.

DECENT WAGES FOR THE AVERAGE WORKER

How can Singapore ensure that people at the bottom-half of the pyramid are able to make a living in an increasingly expensive Singapore, and take pride in their work?

Research and reality in many developed countries have shown that a decent, respectable wage is a key factor.

It is tempting to call for a minimum wage across-the-board for all. But this coarse policy solution carries many hidden drawbacks.

Forbes recently reports that restaurants in Seattle are closing down at a faster rate, following the new minimum wage of $15 an hour. With the restaurant industry employing a significant group of minimum wage earners in America, setting a high minimum wage could eliminate a large number jobs for lower-rung workers.

A better approach that the government has promoted, is a Progressive Wage Model (PWM). Central to this model, is a tripartite approach to wage-setting: industry representatives, the government and the National Trades Union Congress.

The logic is that all three parties will collaborate to set and agree on wage standards, wage increments, and work responsibilities for each job scope, customising them to the needs of each industry.

This approach is supposed to ensure that low-wage earners would be able to make an income commensurate with their effort, responsibilities and qualifications, without being too heavy a cost for businesses.

In reality, however, many have questioned if all three parties really have the worker’s interest at heart, as opposed to the interests of business owners, government, the economy, or other competing policy concerns.

The government is taking a cautious approach with the Progressive Wage Model, focusing first on low-income industries. First introduced in 2012, to-date however, only three industries have been directed to adopt what is close-to a minimum-wage: cleaning, security and landscaping.

For everyone else in low-income jobs, or who need a decent income and lack opportunities for high-end jobs, the Progressive Wage Model and the government’s cautious approach is simply not moving fast enough to ensure a decent wage for the average worker at the bottom-half of the pyramid.

DECENT “LIVING” WAGE AND PRIDE, DIGNITY AND RESPECT

It is worth being more innovative in our wage-setting policies, and explore if this can be devolved to the market, ie the industry AND the unions, and let the market select and decide which sectors to start setting decent wages, and how fast.

The government could step back and play a supporting role by providing information, and establishing licenses, regulations and other incentives. Such decentralisation would enable every industry to hammer out a progressive wage model without having to wait for the government to decide which sector to focus on, and how fast.

Denmark has such an approach to wage-setting, and it might be worth studying the Danish system.

Blue collar workers like truck drivers, construction workers, security guards, even waste collectors in Scandinavia, Western Europe and North America, are able to support their families because they are paid a decent “living” wage, ie a wage sufficient to live a decent life.

With a decent “living” wage comes dignity and self-respect, that lower-rung workers are being paid and respected for doing basic jobs important to the smooth-running of a society and an economy. These include garbage collectors, bus drivers, cleaners, waiters, cooks, etc.

For low-income workers in Singapore to have pride in themselves and their jobs, the unions also need to step up and be more proactive in representing the needs of their workers, and not wait for the government to take the initiative to choose their industry next for PWM implementation.

For workers without union representation, the collective bargaining power offered by unions presents a tremendous advantage. If they have no unions that represent them, it is time to consider starting one.

Do we have a garbage collectors union? A hawker centre cleaners union? Security guards union? What happened to our bus drivers union of old?

FINDING A NEW WAY FORWARD TOGETHER

Regardless of who is to blame, Singapore is now caught in a no-win gridlock. Businesses are used to artificially-depressed cheap wages for low-skilled workers due to lax foreign workers policy, no minimum wage, and growth-at-all cost. And low-skilled local Singaporeans need a decent “living” wage in high-cost Singapore, yet are not willing to take on lower-paid jobs.

Society overall is also used to turning to the government to take the initiative to solve this problem, yet government conservatism is not responding fast enough to lower-end Singaporeans’ need for better-paying low-skilled jobs.

We need to collectively as a society work together to collaboratively formulate innovative, daring new policies that can achieve:

* greater decent “living” wage for as many sectors of low-paying jobs for Singaporeans as possible

* greater range of decently-paid low-to-mid-skilled jobs to absorb lower-to middle rung Singaporeans looking for jobs

* greater positive representation of low-skilled workers’ interests through unions and co-operatives

* greater pride, dignity and respect for low-skilled workers through how they are paid and treated at work by employees and colleagues

AN ECONOMY FOR SINGAPOREANS

In summary, we need an economy for Singapore, that is designed FOR Singaporeans, not for foreigners or the elites.

That is, an economy that offers jobs for Singaporeans across the pyramid, with decent “living” wages, that creates wealth for the masses through growth in income and savings, not through handouts and subsidies.

Please share your thoughts with us.

Skills Upgrading vs Job Creation Part 2: What Type of Economy Do We Need for Singapore?

WHAT TYPE OF ECONOMY DO WE WANT FOR SINGAPORE?

Last week, we discussed the government’s approach to helping low-skilled workers with skills upgrading and compared it with creating jobs for them immediately. This week, we take a look at the underlying assumptions of Singapore’s economy and ask, what type of economy do we need for Singapore?

THE PYRAMID OF JOBS IN AN ECONOMY

In any economy, the range of jobs available typically fit a pyramid model, where high-skilled, high-end jobs are fewer and fewer as we move up the job pyramid, and low-skilled, low-end jobs are more and more as we move down the job pyramid. This also mirrors the number of workers employed in these jobs too.

Singapore’s economy in the 1960s and 1970s used to be mainly the bottom half of the pyramid, with mass manufacturing factory jobs offering employment for as many Singaporeans as possible, in a need to urgently create jobs and income for Singaporeans.

But as we enter into the new millenium, Singapore has moved up the job pyramid into a “knowledge” economy of higher-skilled, higher-end jobs.

The government has also worked hard through the years to push people to take on higher-skilled jobs that carry higher incomes, through skills upgrading.

Singapore’s long-term economic strategy, outlined in the government’s “Our Population, Our Future” website, lies in attracting foreign investment, improving skills and productivity, encouraging women and older workers to stay in the workforce, and supplementing the workforce with foreign workers. What is not so explicitly said, is that more and more of these jobs are the upper half of the pyramid.

SO WHAT HAPPENS TO THE MASSES?

While this economic strategy approach has its benefits, it has left behind people who, for various reasons, cannot upgrade themselves or qualify for higher-skilled jobs, as we have discussed last week.

Furthermore, in spite of economic restructuring, productivity has not increased quickly enough to match wage growth, and exports and cost-of-living are becoming more costly.

Whilst we may not have that many Singaporeans at the bottom of the job pyramid competing for jobs with foreigners in the manual labour space, there are, however, very many Singaporeans in the middle-to-lower spectrum of the job pyramid, who are finding fewer and fewer jobs in the local market suitable to where they are at.

Should these trends continue into the future, the outlook is grim for those at the bottom half of Singapore’s economy pyramid. They end up being left behind by those who have upgraded, without the higher-level skills for employment now nor into the future. They will very quickly become Singapore’s “underclass”.

WILL JOBS AND WEALTH TRICKLE DOWN?

Proponents of trickle-down economics could argue that the creation of highly-skilled jobs will allow wealth to trickle down to the individuals at the bottom half of the pyramid.

However, economists like Thomas Sowell have noted that businesses must first spend money on capital and labour, paying workers to create products, before business owners will see financial returns. And when financial returns do happen, it often goes into the pockets of business owners and shareholders. In effect, trickle-down economics doesn’t often happen.

If workers at the bottom half of the pyramid are not employed, or are paid less-than-minimum wage, there will be no wealth created by them, for them. Similarly, if people do not first spend wealth to create jobs for low-skilled workers, then these workers will not have decent incomes, and no wealth will be created, by them, or for them.

SO WHAT TYPE OF ECONOMY DO WE WANT?

So what type of economy do we want?

An economy that moves up the pyramid, that creates jobs for fewer and fewer highly-skilled workers, many of whom are foreigners being imported into the economy?

An economy that ends up with fewer and fewer jobs at the middle-to-bottom half of the pyramid for the middle-skilled and lower-skilled masses who cannot upgrade in time?

An economy that creates wealth for the higher social classes that does not trickle-down, leaving an increasingly-sandwiched middle-to-lower class with poor quality, poor-paying jobs having to rely on the government for subsidies?

Or could we perhaps consciously create jobs from top-to-bottom of the pyramid, that can immediately offer employment at a decent wage for Singaporeans across the social divide?

And if the private sector won’t or can’t create this range of jobs fast enough, how can the government step in to quickly create these jobs, like it did in the 1960s and 1970s?

Or do we believe in our own self-created rhetoric of moving the masses up the pyramid, that we are not willing to create jobs where they are most needed now, at the middle-to-bottom half of the pyramid?

MITIGATING OUR HYPER-COMPETITIVENESS

The government has sought to keep Singapore’s economy hyper-competitive in relation to other regional economies, to prevent job loss and wage stagnation.

However, has our hyper-competitiveness really been able to prevent job loss and wage stagnation for our masses? Or does the upper-middle class who have benefited represent all of our people?

Sowell argues that profits trickle upwards in an economy, not downwards. By focusing on creating jobs at the upper half of the pyramid, we in fact run the risk of displacing many who are in the lower half of the pyramid.

Similarly, while skills upgrading programs attempt to push people from the lower half to the upper half, many who are unable to upgrade end up being squeezed and marginalised.

Without decent jobs, employment and wages being created in the bottom half of the pyramid, in the long term, Singaporeans at the bottom will face economic and market irrelevance.

We cannot afford to keep them on social hand-outs, and certainly cannot ship them across the border to another country and replace them with higher-skilled new citizens. We owe it to them as citizens to give them a decent living, and be able to raise a family in Singapore.

CREATING JOBS FOR THE LOWER CLASS

Instead of merely focusing on creating higher-skills jobs through skills upgrading, we should also look towards creating immediate decent employment for the bottom of our pyramid too.

And by decent, we do not mean cleaning jobs at fast food restaurants for the elderly, at meagre pay with no minimum wage.

Creating immediate decent employment for the lower classes in Singapore’s economy, will bring this segment of the population more in line with those at the upper half, allowing them to enjoy gainful employment, live a decent life, raise a family, retire, and contribute proactively to the economy.

CAN WE REMAKE OUR ECONOMY?

We have prided ourselves for having created a future for Singapore out of nothing in the 1960s, and re-made our economy a number of times over.

Do we still believe that we as policy makers, can have the creativity, imagination, and boldness, to re-invent, re-make and re-create a different type of economy for Singapore, that can offer decent employment at decent wages from top-to-bottom of the pyramid?

What kind of future do we want to see for Singapore? A nation that claws its way to the top-of-the-heap, but is unable to respond to the plight of those who can’t catch up?

Or a nation that offers decent job and livelihood opportunities for every citizen across the social divide?

Will you step forward and help create jobs for lower-end Singaporeans, and help re-make our economy for all Singaporeans?

Let us know your thoughts, join in this discussion, and come back next week for Part 3 when we will discuss decent wages and pride of workers.