Stagnant Wages, Immigration Fuel Singapore Squeeze

The following is an excerpt of an article published by the Associated Press on February 17, 2011.

SINGAPORE (AP) — Singaporean Ramzi Mohamed is tired of sleeping in the living room of the two-bedroom apartment he shares with his mother and older brother.

His problem is that housing prices in the city-state are up almost 70 percent since 2006 while the 29-year-old gym administrator’s monthly salary of 1,200 Singapore dollars ($938) hasn’t budged in five years.

“When I was 20, I thought I’d have my own place by 30,” Ramzi said. “Now that I’m almost 30, I wonder if that will ever happen.”

Like tens of thousands of others living in the tiny island nation that boasts one of the world’s highest levels of GDP per person, Ramzi’s failure to realize his modest ambitions is no accident.


A flood of cheap immigrant labor — and stiff competition for manufacturing jobs from Asian neighbors like China and Vietnam — has kept keep wages stagnant for many and widened the gulf between a very wealthy minority and the island’s poorest. Housing prices have skyrocketed as rapid population growth outstrips supply.

At the same time, ostentatious signs of the wealth enjoyed by the elite have multiplied. That has put the government under pressure to loosen its tightfisted stance on welfare in the next national budget Friday as it tries to defuse criticism its policies have worsened the plight of ordinary Singaporeans.

The government must also call general elections by February 2012. Analysts expect the ruling People’s Action Party, which has held power since independence in 1965, to maintain its overwhelming majority in parliament. But if poorer Singaporeans who feel left out of the country’s prosperity bring their discontent to the polls, the government could find itself with a weaker mandate and the beginnings of a stronger opposition.

“The lowest income group has struggled to stay afloat,” said Irvin Seah, an analyst at Singapore’s biggest bank DBS. “Plainly, not everyone has benefited equally from the economic growth that has occurred over the past decade.”

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