For people who’ve read my other blog posts, this one might taste a bit dry, but I’ve mentioned Singapore’s high income inequality in a previous post, and it’s about time I address it (let alone wealth inequality, which is an even greater, but harder to discuss, issue). It’s a frequently-brought-up issue among news sites and locals in discussion forums alike, and unlike in a proper research paper, I’ll cite sources informally and also leave out sources for points that are easy to verify with Google. It’s more of an informal thought-spilling than anything, however, so I encourage the reader to do their own research if they’re interested, because I’ll simplistically gloss over a lot of the issues I bring up. I’ll also bring up news articles and local opinion over government statistics, since in many cases, statistics either aren’t available or government statements border on propagandic. For example, Singapore has no government-established poverty line, and no released governmental statistics on the total homeless population. Furthermore, Kishore Mahbubani, a former UN diplomat for Singapore and the current dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, infamously stated in 2001 that in Singapore, “poverty has been eradicated.”
The Definition of Poverty
Of course, that previous statement is just as easy to take out of context as it is to recognize how extreme it sounds. The sort of poverty the media likes to show the world, with skeletal children living on dirt floors, is probably as rare in Singapore as it is in the US, but both countries still have a major poverty problem, in which the elderly work far past their time to retire, children are malnourished though not starving, and workers survive day-to-day with no disposable income. To give Mahbubani the benefit of the doubt, I believe he was referring to the former picture of poverty, of third-world poverty; for the sake of this post, I count the definition of “poverty” as more resembling the latter description.
Reasons for Income Inequality
There are a plethora of reasons why Singapore has one of the highest Gini coefficients of any developed country–or, in other words, the index that measures income distribution and inequality in a country. (It’s an imperfect measurement; it ignores the total wealth of a country, income distribution considering the different stages of life of the population, and is relative rather than absolute.) That being said, I’ll summarize some of them below, and hopefully give a somewhat-accurate picture of the socio-economic situation in Singapore:
1. “More than 37 percent of the 5.2 million people living in Singapore are foreigners, many of whom have taken up citizenship and employment in the city-state in recent years” .
This serves to widen Singapore’s inequality gap in two major ways: by bringing in the super-rich, and by bringing in the poor.
a. In addition to other policies that the Singaporean government has consciously managed in order to attract businesspeople, Singapore has no capital gains tax, which allow investors to do business freely without worrying about excessive taxation. As a result, Singapore has more millionaires per capita than any other place in the world, and the endless lists of high-end fashion brands available in Singapore’s ubiquitous shopping malls (and not just the famous ones along Orchard Road) cater Singapore itself to the high-end consumer. This lack of taxation, though, means a lack of money that could be going to support social policies that could improve Singapore. Even with the super-rich removed, Singapore imports and accommodates a lot of highly-talented workers that it doesn’t have the local training to produce, which skews the median income per capita upwards .
When trying to look up statistics for Singapore’s median (not mean) household income, I found sources citing it as high as SGD$7,800/month (a statistic which may exclude the non-working/those working part-time jobs/those who make under $20k/year), but governmental sources cite a much more conservative $3,200-$3,700/month per full-time worker (not household, though), and BBC cites the average salary (not even median, but average) as USD$31,000/year per worker, the lowest among similar developed countries in their case study . Since Singapore has a lot of foreign workers, I found it frustrating that most of the more-casual sources merely stated “median salary,” without indicating if it was for residents only or all workers. Singapore is also consistently named as one of the costliest cities in the world to live in (for both locals and expats), so income needed to support a relatively comfortable standard of living must be higher as well.
b. Inversely, Singapore’s lax immigration policies bring in cheap labor from poorer countries like Indonesia and the Philippines, who earn more in Singapore than they would in their home countries–despite the fact that Singapore has no minimum wage. This influx has led to there being enough female domestic workers–many of whom are maids–for 1 in every 5 households in Singapore . In Hong Kong and in Singapore, even middle-class families can afford live-in maids, because labor is so cheap, but those same families can’t even afford a house, because real estate is so costly.
Furthermore, while I can’t cite a source for this, many of the cleaners I see around NUS canteens and Singapore hawker centres–public food courts where your reusable plates and utensils are left on the table without a tip or taken to a station to be washed–are elderly.
2. Singapore has a limited welfare system and structural rather than absolute unemployment.
In Asian societies, there seems to be a culture of self-reliance (or family-reliance) when it comes to welfare. Elderly grandparents more commonly live with their sons and daughters, even if those children have their own families, rather than a nursing home. My parents, who immigrated to the United States from Hong Kong before I was born, have always spoken very highly of the way the United States takes care of its elderly and needy, with decent (again, their opinion) healthcare programs like Medicare and Medicaid–and I don’t even think they know about Canada. In Singapore, government handouts are “granted only sparingly,” with only 3,000 households qualifying for public assistance out of about a million . That being said, there are healthcare and social security infrastructures in place; the average S’porean wage-earner (must) put 20% of their earnings into the CPF, or central protection fund, even though only 1 in 5 investors believe that the CPF will support them through retirement .
But Singapore’s unemployment rate in 2010, given its economic struggle during the Great Recession, was still only 4.1%, double what it normally is. Compare that to the United State’s 9.6% in 2010 (though again, that’s double what it was before). However, as mentioned earlier, Singapore’s influx of labor quantity depresses wages for all blue-collar workers. Despite being an expensive place to live in, Singapore offers “cheaper food, haircuts, taxis, and shop services than any other rich world city–only because the people at the bottom probably do not earn enough”. The bottom 20% in Singapore earn $15,288 a year, compared to the United States’ $18,000 and Hong Kong’s (another country with a low Gini coefficient) $16,100 .
We have people who are poor, but what about the most destitute: the homeless?
Even though I joked about it in a previous post, it actually is illegal to sleep on the streets or beg here, which might explain why I see few beggars in touristy areas around compared to San Francisco or Bangkok. My light research found a lack of clear homelessness statistics. The Ministry of Community Development, Youth, and Sports assisted about 200-300 homeless people a year from 2008-2011, but this excludes the three homeless shelters and seventeen halfway houses in Singapore, let alone people who stay in hostels or couch-surf long-term. I’ll also cite an online commenter known as Arnold Chong: “The homeless will be removed and put in homeless shelters where they face severe restrictions on their freedom.
Many homeless thus move to Johor in Malaysia to rent cheaper accommodation there.
Others move in with their relatives and you can have as many as 20 people living in a small flat.
But if you do go to places like Geylang and Chinatown, you will find many homeless single man sleeping overnight on the streets.”
So it doesn’t seem too different from any other developed country – but they do seem more invisible here, somehow.
Conclusion & Summary
Singapore has a large Gini coefficient given its reputation as a wealthy and economically prosperous country, but that itself is not the problem–a high Gini coefficient does not necessarily correlate to income inequality, and Hong Kong has a higher one. The problem is that the giant inequality gap in Singapore is perpetuated by the government itself.
Quoted from Prime Minister Lee Hsien Loong, Singapore’s 2nd Prime Minister ever and elder son of Singapore’s founding father, Lee Kuan Yew: “In fact, if I can get another 10 billionaires to move to Singapore and set up their base here, my Gini coefficient will get worse but I think Singaporeans will be better off, because they will bring in business, bring in opportunities, open new doors and create new jobs, and I think that is the attitude with which we must approach this problem.”
Also: “My belief has been that a minimum wage is not going to solve the problem. If it is modest, it won’t do harm, neither will it do a lot of good. If it is high, well, then it is going to cause costs to employers and it is going to cause unemployment to the low-wage workers. So you are not really solving his problem, you are just going to transfer it somewhere else.”
Enjoy the Facebook backlash here. Actually, that topic would make for an interesting future blog post – how social media has weakened the social and political grip of the People’s Action Party, Singapore’s only ruling governmental party since its inception.
Add on the current environment of censorship for people speaking out about Singapore’s problems. The Newspaper Printing and Presses Act of 1974 ensures no newspaper can be published without a permit granted by the government, who essentially control The Straits Times, Singapore’s leading newspaper – multiple sources can be found re: Singaporean censorship, really. Then reflect all this against the strangely paradisal picture of Singapore that the government tries so hard to enforce in their statements (I recall a banner in UTown at the National University of Singapore which reads, “You will have the best education”), and it soon becomes apparent how and why the inequality gap in Singapore needs to be addressed and discussed more.
 “Singapore vows to create social safety nets” – BBC
 The closest I can cite to a source for this is Singaporean Sudhir Vadaketh’s Floating on a Malayan Breeze (2010), the book I read for my UCEAP Country Project (and highly recommend to learn about both Singapore and Malaysia), but multiple people on forums and statistics would probably back me up. Vadaketh particularly talks about how Singapore’s business-oriented economic climate and conservative culture has left it in great need of a “knowledge economy” – one with highly trained local scientists, designers, and other creative forces. The National University of Singapore doesn’t even have an art major, for goodness’s sake. However, this assertion–that Singapore lacks a proper “knowledge” economy–is more speculation than anything else.
 “Singaporeans Earn the LOWEST Wages Among the High-Income Countries” – The Heart Truths, a blog which cites the BBC in Chart 6; the link is broken, but the article title referred to can easily be Googled and found
 “Fact Sheet – Foreign Domestic Workers in Singapore (Basic Statistics)” – TWC2
 “Welfare in Singapore – The Stingy Nanny” – The Economist
 “Only one in five Singaporean investors think CPF is Enough for Retirement” – The Straits Times
 So many sources for this one that I’ll just post the links.