Why it is not easy to mind the middle
By Christie Loh, TODAY | 14 February 2007 0910 hrs
They often feel ignored and mercilessly squeezed.
Middle-income workers have long been left out of targeted help to deal with globalisation and economic restructuring. State focus has inevitably been on the less fortunate low-wage workers.
Change, however, will come on Budget Day tomorrow, when the Government rolls out a package aimed at the sandwiched class. But pundits note that there are no easy panaceas for a group that is diverse, grappling with age, and laden with financial commitments.
A case in point is 50-year-old Maureen (not her real name). During her heyday with a European bank here, she was drawing a five-figure monthly salary. Then the 1997 Asian financial crisis kicked in and the forty-something regional director was laid off. No bank would hire her. "People were looking at my age and going: 'What can you do'?" she said.
For two years, she tried in vain to sell property and insurance. She was even willing to become a taxi driver until a small local multimedia company offered her a job but at a hefty pay cut. "I had no choice. I had to pay my bills," said Maureen, who now takes home about $3,000 a month.
What kind of aid would she like? "I just want companies to give us middle-aged, middle-income workers an opportunity to work," she said.
One of the Government's plans to lift the middle-income is by partially restoring employers' contribution towards workers' Central Provident Fund (CPF). In Sars-struck 2003, the contribution rate was slashed to 13 per cent from 16 per cent, to help reduce business costs. But this dealt a blow to the middle-class, which depended on CPF to pay for big-ticket items such as housing.
At the same time, white-collar workers — falling under the category of 'professionals, managers, executives and technicians' (PMET) — made up nearly half of those retrenched during the 2003 recession. Many since then have been unable to find alternative employment despite their qualifications, said Member of Parliament Ho Geok Choo, who is also president of the Singapore Human Resources Institute.
"The situation is worse for the middle-aged PMETs, as employers perceive them as less trainable," said Mdm Ho. "I think the impressive results by the Manpower Ministry in reducing unemployment have not touched this group."
But how do you reach them when you're not sure who constitutes the middle class? Some economists have tried defining the group as households from the 31st to 80th percentile, earning an average of between $2,990 and $7,260 monthly last year. Unfortunately, this is a wide range and becomes "administratively difficult," said United Overseas Bank economist Alvin Liew. To ensure help goes to the truly "sandwiched", the authorities would need details such as household make-up, number of children, and whether the couple have parents to care for, he said. By sheer numbers, it would be tough to track Singapore's largest class of citizens.
The numbers also mean that sustained help for this group would not come cheap. Also, the squeeze is getting more pronounced as the next wave of globalisation is expected to put the pressure on jobs traditionally held by the middle class.
"There's no easy solution," said Nanyang Technological University's labour economist Professor Chew Soon Beng. Mathematically, cutting personal income tax would not benefit the middle class as much as it would the rich. And when consumer prices rise, it is the lower- to middle-income workers who feel the pinch most.
Perhaps keeping the cost of living affordable is the best way to help, Prof Chew said. This is especially so as the middle-class parent is nagged by concerns about whether he can afford to give his children what other children have, said Mr Suresh Shah, an advisor to jobs-matching centre, the Singapore Professionals and Executives Cooperative. " I may not be able to afford luxuries like the other class, but at least some minimum is given to me – not only for survival but something more than that," he explained. "Telling middle class folks to lower their expectations in a society that takes pride in calling itself a 'middle class society', even First World, will not go down well," said National University of Singapore sociologist Tan Ern Ser. - TODAY/fa