Singapore's new poor holds electoral potential
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Singapore's new poor holds electoral potential
Evidence from Hong Kong shows "New Poor" can herald democratic change
by Goh Meng Seng
Goh Meng Seng, a Workers' Party member, manages a business operating out of Hong Kong. He attended the Conference on Social Cohesion co-organised by the Faculty of Social Sciences, University of Hong Kong, and the Hong Kong Council of Social Service HKCSS) held on 28 and 29 November, 2003.
Singapore's "New Poor" can make their mark during the next general elections if we were to look at developments in the Hong Kong Council elections. The Democratic movements won a landslide victory in the Council election with the Democratic Party winning more than 80% of the 120 seats they contested. The "Royalist" lost a horrifying and humiliating battle, winning merely 30% of the 200 seats they contested. They have become the minority party overnight!
In Hong Kong, the group of "New Poor" (those who are caught with negative-assets and dwindling income cum purchasing power in hand) have demonstrated their enormous political will and power, both in the half a million 1st July 2003 demonstration, as well as the recent Council elections. The most recent demonstration on 1st January 2004 had a turnout of a hundred thousand.
The "awakening" of the "New Poor" in Hong Kong is an eye-opening event, and somehow, affected the mood of the DPP in Taiwan. The DPP had all along fought for an independent Taiwan but when it came to the final showdown, they backed down from voting for a full referendum for Independence. They realised that they could not go against the wishes of the middle class (New Poor) who are suffering economic setbacks and have no wish for in a real full war with China.
The ruling elite of Hong Kong, on the other hand, got a rude shock when half a million participated in the demonstration held on 1st July 2003. Contrary to what PAP government would want us to believe, such a massive demonstration in Hong Kong has neither driven foreign investors away nor posed a threat to social security. The orderly manner in which this massive demonstration was carried out has boosted foreigners' confidence in Hong Kongers' ability to be rational and responsible, just as matured citizens should be. Besides putting aside the legislation of Article 23 which was perceived as anti-democracy and anti-freedom of speech, the ruling elite of Hong Kong suddenly recognised the urgency to solve the worsening economic situation due to SARS and various factors. Since then, a lot has been done to improve the economy and Hong Kong is enjoying a very much higher GDP growth than Singapore with a reduced unemployment rate by the end of 2003.
Social cohesion in Hong Kong has improved tremendously after they had experienced the economic hardship and the massive demonstration in July 2003 together. This improved social cohesion was evidently displayed in the recent incident whereby an arson took place in the MTR train on the move. Though the train commuters panicked and tried to run for their lives, they helped each other along the way. Children, the aged and pregnant women were helped and ushered to safety first. Nobody was stampeded upon in the midst of the panic. Such a demonstration of instant care and consideration for others during a crisis was hailed as a leap forward in building up strong social bonds.
The potential political power that the class of "New Poor" holds is enormous. In Singapore's context, however, this class of New Poor has not been fully mobilised yet. Instead, they are still hoping that the PAP can bring them good fortune and prosperity. This "illusion" was in fact totally torn down by PAP's self disclaimer that economic recovery depends on the US, rather than on their million dollar abilities.
The New Poor in Singapore does not see the urgent need for actively engaging in social-political activities apart of their economic activities. Singaporeans cannot relate the relevance of such involvement with their immediate well being. But we have seen how, in Hong Kong, such involvement has played an important role in moulding social cohesion and improving economic development.
PAP ministers don't have all the answers, despite the million dollar annual salaries they are giving themselves. The recent rare admission by the incoming Prime Minister, Mr. Lee Hsien Loong, that the PAP government has no monopoly of knowledge and ideas, should serve as a lightning bolt to Singaporeans. The New Poor should not have any more illusion about the PAP's over-boasted abilities. They should instead, fight for their own rights and well being through active political and civil engagement, contributions towards the political process, or at the very least, by using their power to vote wisely to determine what kind of new society they want. A democratic society that lacks strong alternative voices will result in complacency within the ruling party if they are not kept in effective check. This will in turn, result in a total neglect of the rights and welfare of the New Poor.
Without the active citizenry and participation of Singaporeans, this strong alternative voice cannot be built and sustained. The New Poor of Singapore must realise that the fate of their future as well as their children's, lie in their hands, not merely on the PAP government's alone. -
The above article is written by Mr Goh Meng Seng taken from http://www.wp.org.sg/
I have a question for Mr Goh. How do you define "new poor" ? -
I think the part he wrote about "the group of "New Poor" (those who are caught with negative-assets and dwindling income cum purchasing power in hand) "Originally posted by paperchicken:The above article is written by Mr Goh Meng Seng taken from http://www.wp.org.sg/
I have a question for Mr Goh. How do you define "new poor" ?
is the definition
Negative assets is almost like mortgages and credit cards if I am not wrong .
I think if I interpret it correctly ...it is almost like situations over where I am now :
young people cannot afford houses
they have credit cards
which incurs more debt
the education system is pushing them into debt as well
if they take mortgage for their house - some can only afford only 10%
when the bank makes a call for funds when interest rates go up
they cannot pay.
These are the young professionals of the future...no money yet employed and well educated. -
me and my neighbours?Originally posted by paperchicken:The above article is written by Mr Goh Meng Seng taken from http://www.wp.org.sg/
I have a question for Mr Goh. How do you define "new poor" ? -
Well, that sums up the destiny for almost everyone I know, save those who have tied themselves to the white apron strings.
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They are in ebt because they overspend.Originally posted by fymk:I think the part he wrote about "the group of "New Poor" (those who are caught with negative-assets and dwindling income cum purchasing power in hand) "
is the definition
Negative assets is almost like mortgages and credit cards if I am not wrong .
I think if I interpret it correctly ...it is almost like situations over where I am now :
young people cannot afford houses
they have credit cards
which incurs more debt
the education system is pushing them into debt as well
if they take mortgage for their house - some can only afford only 10%
when the bank makes a call for funds when interest rates go up
they cannot pay.
These are the young professionals of the future...no money yet employed and well educated.
What do you expect govt to do ?
Pay for their designer clothes, expensive holidays and car loans ?
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hrm
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Do they spend because they like the high life, or is that kind of lifestyle already the lowest common denominator for a respectable and decent existence, especially to give your kids a headstart in life?
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double posting
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Credit card is their faultOriginally posted by papertiger:They are in ebt because they overspend.
What do you expect govt to do ?
Pay for their designer clothes, expensive holidays and car loans ?
but housing? How can you blame people if they cannot EVEN afford a 200k flat. We are not talking condominiums worth half a million.
And plus bills? Phone bills/internet bills /utility bills/ car bills/ HDB town council bills/ medical bills/ water bills/mortgage etc
How about some who cannot get into local universities. Don't they have a right to seek other avenues like distance education and overseas education? Some people borrow from banks to get money to further themselves.
How about healthcare ? Restrictions according to income. Health is the responsibility of individuals - well yes certain health outcomes can be associated with the individual's lifestyle. How about cancer in kids? Kids to be blamed? Let's say a couple has 3 kids due to the baby policy. One of them get cancer. They do not qualify for C class so the child has to stay in B2 ....let's say for 10 days. Include treatment and guess how much it costs. What about the other children? Let's not kid ourselves - healthcare is expensive and even middle income families have problem paying it off. How about people on haemodialysis? Those cost a hell and some of it may not be even the person's fault.
Best part I like is " Children are responsible for parents' welfare" aka parent tribunal policy thing. Worse case scenario: Doesn't matter if you have 3 mouth ( 2 children and a wife) to feed. If the income is above the certain calculated level and you are the only child . You have bills to pay , children education , household expenses and then ur dependent mom /dad falls ill . So you have to take care of them too. Of course being the filial kid , you cannot say a thing if your income is above average but the bills are killing you. Some people can identify with this situation.
I can tell you my situation back home before I went overseas. I earnt just nicely to support my lifestyle of no cars, just phone and net bills,Give some money to mom and keep some for saving . Had extra to spare so I learnt computer programming out of interest. I split utility bills with my parents. I took one look at their mortgage, council rate and the rest of the other bills when my dad (the solebreadwinner)was suddenly hospitalised for a emergency op. I did the calculations. If my father died on the operating table, I will have to support my sister and my mom, meaning my salary back in Singapore is not enough to even pay all the bills. My sister's books, my mom's medicine, hospital bills (yes they do charge even when the patient is dead ,..my grandfather's example) and the whole HDB mortgage piled on top . My dad's car will be have to be sold off to pay for itself. Yes we can always down grade the flat to a 3 room and remain always in need of money . Should I get sick or fired or take a paycut ...it means we can survive for 1 year only then we probably need to sell off the 3 room flat. of course my dad's will would be towards my sister's education because I got the chance to have the headstart while my sister is too young then. No time to socialise or party because it means money . That's the worse case scenario for me but luckily it didn't happen. If it had happened, I will belong to the New poor category. Educated middle class worker who is always perpetually in debt
Now how about insurance? How about insurance coverage? Don't you need to pay insurance for car/life etc....to ensure the peace and quiet of mind. My dad had a bypass and they paid out in full to cover hospital charges and operation charges ,or else our middle class family would have gone broke and my sister have to give up her studies.
Everything in Singapore a middle class person have to pay and pay . So at the end of the day, they don't have savings. When they retire...what happens? It's Their fault that they cannot afford to save up earlier and live longer than usual rather than the inflation rate. Go work in mac donald's then .
How about poor families? They are even worse off.
Something else too.....jobs are hard to find nowadays in Singapore...
Of course we can always blame the victims for trying to get a decent house , decent education and getting sick. Oh ya it is their fault if they don't get employed too even if they are old and employers don't want them.
Welcome to the New Order then -
so there goes the new poor of today -
How to help low-wage earners break out of poverty trap Chua Mui Hoong
IS THERE an underclass in Singapore?
Conventional wisdom would say no. After all, Singapore has had over three decades of full-employment growth and rising incomes, guaranteed to give a leg up to any poor worker.
A 1995 World Bank report showed that rapid growth from the 1960s to late 1980s reduced income inequality in East Asia, including Singapore, contradicting theories that rapid growth leads to income inequality.
In Singapore, even if individuals are poor, chances are their children will not be, as Singapore is a socially mobile society which rewards merit and ability. Stories of children of cabbies, hawkers or cleaners who make it good in the professions abound.
But there are fears that an underclass may be emerging, consisting of those who cannot cope with changes caused by economic restructuring.
At a dialogue that union leaders held with Senior Minister Lee Kuan Yew on July 23, one union leader noted the trend of structural unemployment and asked: 'Can we find a group of people, underclass workers, who will be living maybe around...the poverty line?'
Mr Lee's reply was that Singapore did have a problem with the bottom 5 per cent of society.
Who are they? Mr Lee gave a snapshot: 'Many of them are not solvable problems, especially women left without husbands and with a family.
'How do you do it? Long term, educate the women so that in the end they can get a job and look after themselves, and not have so many children when they can't afford it.'
His remarks were revealing for capturing in a few sentences the multi-faceted challenge involved in helping this group.
So, for example, help for such families must go beyond training subsidies, or investments in education, and include support for the family at home.
But first, a closer look at what the available data tells us about income trends.
A Department of Statistics (DOS) report last year showed income inequality has crept up over the years.
Overall, average monthly incomes have risen: from $3,076 in 1990 to $4,943 in 2000.
But incomes at the top rose, while incomes at the bottom declined. In 2000, incomes for the top 10 per cent of resident households grew 8.8 per cent, while incomes for the bottom 10 per cent of wage-earning households shrank 13.6 per cent.
This shrinkage would have been even greater - 54.1 per cent - if households with no wage earners had been included.
The Gini coefficient - which measures income disparity in a society - hovered around 0.44 in the 1990s, but expanded to 0.481 in 2000, showing a rising income gap.
How does Singapore's wage inequality compare with other countries'? Such comparisons must be done with caution, but a look at the United Nations Development Programme's latest human development report unveils some surprises.
Singapore's income gap is slightly larger than America's and Asian countries like South Korea and Hong Kong.
The bottom 20 per cent of wage earners in Singapore command just 5 per cent of its national income. In South Korea, the bottom 20 per cent's share is 7.9 per cent, and in Hong Kong, 5.9 per cent. Even arch-capitalist America's bottom 20 per cent managed an income share of 5.2 per cent, marginally higher than Singapore's. But then again, many Singapore households own assets, which may not be the case in some of these countries.
In Nordic countries like Finland, Norway and Sweden, where a social consensus exists favouring high wages, high taxes and large income transfers, there is a relatively equitable distribution of income, with the bottom 20 per cent accounting for 9 to 10 per cent of income.
Why has the income gap widened in Singapore? And will it continue to widen in coming years?
One school of thought blames globalisation: Labour mobility results in the highly skilled getting increasingly higher first-world wages, while wages for the lower skilled compete in a race to the bottom.
Globalisation advocates, however, point out that trade and investments lead to rising national incomes, especially when accompanied by investments in universal education.
What can be done about the rising income gap?
One option is to do nothing, and to leave market forces to do their work.
This approach would work if there is high income mobility, with those in the bottom 20 per cent today rising to the top 20 per cent a decade later.
However, figures from the US suggest that this does not happen as often as one might hope. Studies by the Urban Institute and the US Treasury from the 1980s found that about half of the families who start at either the top or the bottom 20 per cent, remain there after a decade, and only 3 to 6 per cent rise from bottom to top or fall from top to bottom.
Another option is to subsidise public goods and services, especially education, but also necessities like transportation and medical services.
During SM Lee's dialogue, one union leader asked him how workers could accept wage cuts when costs of public services like transport and medical care were rising.
Mr Lee's reply: 'We have to decide whether we go into subsidising utilities and subsidising transport which some countries do. We decided as a matter of basic principle that it's better to give the man the cash and he decides what he's going to do.'
In other words, subsidise the low-income user, not the service. Hence the use of rebates for utilities and service and conservancy bills.
The third option is to design policies that target those who need help.
To do so, it is important to distinguish between different groups of low-income households, and target policies accordingly.
The DOS report, for example, divides the bottom 10 per cent of households into those with a wage earner, and those without. Households with no wage earners include those whose main breadwinner has been laid off temporarily, but will find a job within months, and retiree households sitting on a comfortable nest egg.
For these unemployed households, the best social safety net is one that provides medical coverage throughout their unemployment and support for living and training expenses over a short period. This can be done by changing the current employer-based retrenchment, medical and training system, to an employee-based one that moves with the worker when his job changes.
Chronic low-wage households - where the main breadwinner makes barely enough to support the family - need different kinds of support.
Traditionally, Singapore belongs to the 'teach them to fish' school of social policy, emphasising education and skills training. This approach must remain the cornerstone of policy, but a holistic package that provides support to the family is also needed.
Training subsidies and education support will not relieve low-income parents of their heaviest burden: that of juggling work and caring for children, or disabled elderly.
Harvard academic Jody Heymann found that many low-wage families in America were almost crippled by care-giving duties. In The Widening Gap, which was published in 2000, she found that the children of low-wage earners fared worse at school and had more health problems than those of higher earners.
Low-income parents could not afford quality child care, yet were trapped in rigid work conditions preventing them from fitting in care-giving duties. They have limited sick and annual leave, and tend to work shifts or long hours. Their children were 2.72 times more likely than other children to get into trouble and be suspended from school. A vicious circle sets in, with the poor unable to acquire the skills that would enable them to escape poverty.
America, of course, is not Singapore, but the general description rings true. Policies targeted at low-income earners must support them in their care-giving responsibilities. Such families must, of course, also take responsibility and strive to help themselves.
Family service centres (FSCs) now offer such family support services, but on an ad hoc basis.
The Ministry of Community Development and Sports should coordinate support for the structurally poor to ensure a comprehensive delivery of services, working with FSCs, community development councils and non-governmental organisations.
Just as attention is paid to structural unemployment, so too should attention be paid to the structurally poor, whose numbers may grow otherwise.