The Hawker and the Banker of Sg

• lotus999

  8 Jan 08, 19:36

  sadly it is the govt that started it:
  
  The Hawker and the Banker
  A Singaporean student on home leave writes about what he sees as a society dividing rich and poor. Oikono.
  Jan 7, 2007
  
  (Geoffrey (Kok Heng) who is studying at Wharton School, University of Pennsylvania, runs Oikono weblog)
  
  Having last visited Singapore two years ago, I expected the city to be radically different.
  
  However, the area where my family stays hardly changed and even Orchard Road looks the same. City Hall appears different, but it is in the prices that I observed the biggest change.
  
  What struck me in particular was not so much the increase in prices, but how uneven the price changes have been.
  
  This uneven price changes has distributional impacts on what I see as two diverging segments of society.
  
  Singapore is increasingly populated by two groups of people: the Hawker and the Banker.
  
  In Singapore, hawkers refer to the people who work in large food centers selling food or drinks. A few strike it rich but most are typically uneducated and belong to the poorer segment of society.
  
  I know this because my father is one of them, selling drinks in one of the large outdoor food centers that populate the island.
  
  But the Hawker I use in this analysis is a larger segment of society: the Singaporeans who lack the education to be globally mobile and benefit from global wage levels.
  
  This group is larger than you think. It includes many local graduates who accept stagnant local wage structures, and compete with educated immigrants from China, India or Nepal for white-collar jobs.
  
  On the side of the divide are the Bankers, not just people in the financial industry, but people who have a world-class education (often international) that gives them opportunities to pursue jobs as consultants, investment bankers, tradersÂ…etc.
  
  These jobs pay a globally competitive wage – a premium often reaching two or three times the average wage of a local graduate.
  
  What struck me about prices when I returned was how the food sold by hawkers around the area I lived has barely budged.
  
  I do not know if this phenomenon is island-wide, but it was surprising to see a plate of Char Kway Teow still at the $2 or $3 I paid when I left.
  
  I met my former boss, a distinguished economist, and he felt the same way about the unequal prices.
  
  Are the Hawkers competing in a different world? One where being local meant facing competition that erodes pricing power and depresses wages?
  
  I talked to my mother, a nurse, and she said that wages have not risen in line with inflation over the past two years.
  
  While these prices have remained stagnant, I noticed that it was not so in the city area. What I though of as a fancy night out at Crystal Jade La Mian Xiao Long Bao now came with fancier prices.
  
  I went to look at cufflinks at Alain Figaret as I liked to do. They are now 20 percent pricier.
  
  Another night, I was at a dinner hosted by one of Banker-type firms. It was for students studying at overseas university. All of the Bankers hosting us were from distinguished American and British universities.
  
  A Singaporean student at the table flew with her family to exotic locations every holiday, sometimes over weekends, dined frequently at expensive restaurants in Singapore whose fancy names I never heard of, and could hardly pronounce.
  
  One of the Banker-types was born in Singapore, grew up in the US/UK, and never ate in a food centre in Singapore. They earned the global wage, one most Singaporean undergraduates dream off.
  
  They lived in another world beyond the sight of most ordinary Singaporeans; one I did not know existed until I left Singapore.
  
  The Economist (Economics Focus Dec 22, 2007) observed that rising income inequality in modern societies does not result in a large difference in material comforts.
  
  However, I worry about what this gap means for a society in terms of power inequality and shared experiences.
  
  Can the Banker understand the life of a Hawker? Can he empathise with their difficulties or being so far removed from them, he wonders why anyone would need social security, handouts or subsidized healthcare?
  
  Will inequality mean that we have two groups living in two Singapores: one where fine dining, exotic holidays, and posh cars define a Singaporean experience, another where hawker food, trips to Johor Bahru, and SBS dominates?
  
  Walking around Bugis, I glimpsed people sleeping on the sidewalks and I wonder. - Posted by Oikono
• wheelcamp

  8 Jan 08, 20:55

  Which govt in the world encourages its citizens to cheapen themselves?
• robertteh

  8 Jan 08, 22:25

  The Singapore domestic economy is very shallow consisting mainly of hawkers and low-level businesses, There is little or no value-adding with many merely clinging on for mere survival.
  
  Hawkers and consultants business set-ups are all over the little red dot. There are too many hawking or carrying suitcases to beg for some works to do. These are still not so bad because at least there are still some entrepreneurial spirits trying out something to survive the rat race.
  
  We have a very low level of economic structure because of counter-productive over-taxing for every service by the government.
  
  So businesses are difficult to survive with a high failure rate of over 90+ %.
  
  There is no leeway for business start-ups except for the rich and very rich who are not supported by creative small-men businesses offering all kinds of specialization to support the larger businesses or industries.
  
  That is the kind of trap we are caught in by a perpetual cost-pushing government.
  
  No one except the monopolies like the MNCs or the GLCs can do well in business.
  
  People at the last resort will just eek out a living by hand-to-mouth type of jobs like hawkers or suit-case carrying consultant begging everywhere for a little dole.
  
  If the government does use some of its taxes wisely to provide services to the people, and stop all types of profiteering and competing in businesses themselves at least many people still can go into value-adding businesses.
  
  The answer with this type of governing there is no chance we the people can go into businesses or help to create more economic fizz and vibrancy?
  
  With government pushing up utility and transport costs and housing so high with all kinds of taxing and profiteering citizens will not be able to survive the high barrier of entry so created.
  
  Businesses will have larger room for start-ups on practical knowledge application which will eventually improve business efficiency, specialisation, technology start-ups and services of all kinds.
  
  If we want to have our citizens going into higher value-adding businesses then taxes and government charges will have to be moderated from the present high squeeze.
  
  Government over-taxing is the root cause of this kind of society.
• airgrinder

  8 Jan 08, 22:32

  Originally posted by lotus999:

  ...........
  However, I worry about what this gap means for a society in terms of power inequality and shared experiences.
  
  Can the Banker understand the life of a Hawker? Can he empathise with their difficulties or being so far removed from them, he wonders why anyone would need social security, handouts or subsidized healthcare?
  ...........

  I think the banker can't really, neither can he empathise nor understand the needs of handouts and healthcare.
  
  But how can we close the gap? I guess not many have any ideas...
• maurizio13

  8 Jan 08, 23:35

  Originally posted by airgrinder:

  I think the banker can't really, neither can he empathise nor understand the needs of handouts and healthcare.
  
  But how can we close the gap? I guess not many have any ideas...

  Why would the poor and needy bother the rich banker? As long as he is rich, anything else is secondary.
  
  Close the gap?
  
  You need to tax the rich heavily to subsidize the poor.
  
  Why subsidize the poor? The differences in wages between the labourer and professional is too great. The difference is a consequence of the government's initial education policy, admitting only the top percentile of students into university instead of admitting everybody that is abled. This has created a shortage of professionals, shortages in supply causes these professionals to command higher wages. While there is an enormous supply of labourers at the lower end of the job market, large supply equates to lower price, therefore lower wages.
  
  How does one price the value of goods in the market?
  
  Is diamond more expensive or water?
  
  In explaining the diamond-water paradox, marginalists explain that it is not the total usefulness of diamonds or water that matters, but the usefulness of each unit of water or diamonds. It is true that the total utility of water to people is tremendous, because they need it to survive. However, since water is in such large supply in the world, the marginal utility of water is low. In other words, each additional unit of water that becomes available can be applied to less urgent uses as more urgent uses for water are satisfied. Therefore, any particular unit of water becomes worth less to people as the supply of water increases. On the other hand, diamonds are in much lower supply. They are of such low supply that the usefulness of one diamond is greater than the usefulness of one glass of water which is in abundant supply. Thus, diamonds are worth more to people. Therefore, those who want diamonds are willing to pay a higher price for one diamond than for one glass of water, and sellers of diamonds ask a price for one diamond that is higher than for one glass of water.
  
  
  On the other hand, if you are in the desert. Do you think a diamond is worth more than a glass of water?
  
  Our MM's use of central planning (% of intellectuals, % of labourers) has created a supply shortage which resulted in wage differentials.
  
  By not taxing the high income earners more so redistribute income to the poor, they are only reinforcing the wage differences. That's why in years to come our Gini Coefficient will rise even further.
  
  We have to ask ourselves, why have countries like Finland, Norway, Sweden and Denmark, abled to maintain their Gini Coefficient at below 27.0 despite their very high GDP per capita. A low Gini Coefficient means more income equality; a high Gini Coefficient means more income inequality. Singapore has a much lower GDP per capita as compared to these Nordic countries, but Singapore's Gini Coefficient is 42.5.
  
  Income redistribution.
  
  The only ones that are against income redistribution are the rich, who wants to perpetuate the wage differences for their selfish and greedy desires.
• Doubletalk

  9 Jan 08, 09:28

  The Fisherman and The Industrialist
  
  The rich industrialist from the north was horrified to find the southern fisherman lying lazily beside his boat, with his hands folded behind his head, admiring the lake surroundings. “Why aren’t you out fishing?” asked the industrialist. “Because I have caught enough fish for the day,” replied the fisherman.
  
  ”Why don’t you catch some more?”
  
  ”What would I do with them?”
  
  ”You could earn more money,” was the industrialist’s reply. “With that you could buy a new motor so your boat could go into deeper waters and catch more fish. Then you could make enough money to buy nylon nets. These would bring you more fish and more money. Soon you would have enough money to own two boats ... maybe even a fleet of boats. Then you would be a rich man like me.”
  
  ”What would I do then?” asked the fisherman.
  
  ”Then you could really enjoy life.”
  
  ”What do you think I am doing right now?”
  
  — author unknown
  
  http://www.philly.com/inquirer/world_us/20071208_Scotsman_says_no_to_Trump.html