By Leong Sze Hian
I refer to the Editorial “When wages fail to grow along with the economy – Stagnating incomes need to be tackled in earnest” by the Managing Editor, Mr Han Fook Kwang (Sunday Times, Jun 16).
Greatest Editorial ever!
In my humble opinion, this is the best Editorial in the Straits Times that I have ever read, since my reading of the Straits Times from about 50 years ago.
It has put simply, clearly and plainly, the biggest problem (in my view) that Singapore is facing today – very very low real wage growth in the last decade or so.
Before I comment on the specifics of Fook Kwang’s Editorial, I would like to say a bit about my relationship with him (just in case some people may say “kelong”).
Fook Kwang and I were classmates in Raffles Institution (RI) from 1966 to 1971 (If I remember correctly, we were in the same class for 2 of the 6 years from secondary 1 to pre-u 2).
He used to live in the same housing estate as me. and he would jog pass my house every morning (yoga in the club). He has since moved on to a much bigger house which is not near mine (just kidding lah – I don’t know where he stays now or how big his house is).
He was Editor of the Straits Times for 9 years until February last year, when he became Managing Editor of SPH’s English and Malay Newspapers Division.
He joined The Straits Times in February 1989 ,and was made Political Editor in January 1995, in charge of political coverage in The Straits Times. He graduated from the University of Leeds in Mechanical Engineering on a Colombo Plan Scholarship. He serves as a Trustee of National University of Singapore. He holds a Masters in Public Administration from Harvard University. He was awarded the Pingat Bakti Masyarakat (The Public Service Medal) in August 2000. Prior to joining the Straits Times, I believe he was the Director of Communications in the then Ministry of Transport (MOT) – a civil servant for about 9 years. (If you search the newspaper archives, I think you can find several of his replies in the forum pages, on behalf of the MOT on public transport, COE, etc).
As you can see from the above Fook Kwang has had a very distinquished career.
He is also the author of 2 of Singapore’s most famous books (internationally that is) – two books on Singapore’s founding prime minister: Lee Kuan Yew: The Man And His Ideas (1998), and the much more recent Lee Kuan Yew: Hard Truths To Keep Singapore Going.
After completing our Pre-University studies in RI, he went to the United Kingdom on a Colombo Plan Scholarship, and I went to work, without going on to university (I believe I was only 1 out of about 4 classmates in my class of about 40-plus, who did not proceed on to university).
Now, let me get back to the specifics of his Editorial.
It states that “In every decade from the 1970s to 2000, the median monthly income of Singapore workers more than doubled every 10 years.
(For those interested in the details, these are the median income numbers: 1975: $286, 1980: $398, 1990: $1,000, 2001: $2,100, 2010: $2,710)
That’s an annual increase of at least 7 per cent a year and, in some decades, 9 per cent.
But from 2000 to 2010, median salaries moved much more slowly, increasing by only 2.5 per cent a year. If inflation was taken into account, the increase amounted to only 1.3 per cent a year.
It wasn’t because the economy stopped growing.
On the contrary, the gross domestic product per capita, which is the usual way of measuring the economy, grew by more than 5 per cent a year from 2001 to 2010, a highly respectable increase. This was the same growth as in the decade before, from 1991 to 2000.
So, while Singapore’s economic growth has been consistently good over the last 20 years, the story on the income front is very different, and has changed dramatically over the last 10.
It is no wonder Acting Manpower Minister Tan Chuan-Jin was reported in the media saying that he wasn’t happy with how incomes had not moved in recent years.
In fact, the number he revealed was a shocking one: The starting salaries of fresh graduates from the local universities had remained unchanged for the last five years, and were lower than those in 2007, taking inflation into account.
More sobering news was to follow.
According to a report by the ministry released last week, wages grew by less than the inflation rate last year, meaning in real terms, they were below 2011 levels.
There was also the revelation by the National Trades Union Congress that many companies in the non-unionised sector did not implement the National Wages Council’s guideline last year of a $50 increment for low-wage workers.
This newspaper found only four of the 12 firms it checked had complied.”
The “right” wage statistics
Fook Kwang’s Editorial is arguably, exceptionally excellent, because he is using the “right” wage statistics (maybe he may not be very much in agreement with what was said recently in an international TV news programme that when Singaporeans read the news online, we have to ensure that they read the “right” things) – “excluding employer CPF contribution”, unlike what many Ministries (and journalists – can’t really blame them as often they are just quoting the Ministries) often focus on in the narrative of their press statements – ”including employer CPF contribution”.
In this regard, we must give credit to the PMO for using the “right” wage statistics, such that it even made it to a newspaper forum page, when the PMO clarified as to why its real wage growth statistics for one year was different from the MOM’s.
How can I help “statistically”?
The first thought that came to my mind when I read Fook Kwang’s Editorial (with repeated applauding hand claps in my head), was – Ah! Is there anything that this fellow old Rafflesian (me) can help to add to his Editorial (statistics wise that is as my friends say I must be eating statistics for lunch every day)?
Well – Fook Kwang – this is one that like we used to say in school – you owe me one!
2002 to 2012 even worse?
According to my analysis of the statistics from MOM, the real Median Gross Monthly Income From Work of Full-Time Employed per annum from 2002 to 2012 was even worse, at only about 0.85 per cent (than your Editorial’s 1.3 per cent from 2000 to 2010).
Also, the MOM report released last week indicated a – 0.8 per cent decline in real wage growth for last year (you said that it was below 2011′s wage level), and the number of firms that did give the NWC’s recommendation was 3 out of 10 (a bit worse than your newspaper’s survey which found 4 out of 12 firms).
All workers vs full-time workers?
I would also like to suggest to you that you ask MOM for the statistics on “all” workers (full-time and part-time), as the analysis is based on that of the “full-time employed”. I believe the older MOM reports (like from about before more than 5 years ago) would refer to “all” workers in the narrative, which I don’t seem to be able to find in 1 summary historical table or in 1 page in recent years anymore.
I think if you ask MOM, they will give it to you. If I ask – probably not (never) – as I am a nobody – I’m just a blogger!
I suspect the “all” workers’ numbers may be even worse than the above.
Finally, I particularly liked your remarks in your opening first sentence
Ferraris ground to a halt?
– “If wage increases here can be likened to a speeding car, Singaporeans were driving Ferraris all the way from independence to the late 1990s.
For almost 40 years, incomes went up every year, and in large dollops.
Then, for reasons that are not yet clear, the brakes were applied and the racing car slowed down considerably.”
Actually, the car may have ground to a halt – with negative real wage growth in 4 out of the last 5 years, low 1.3 per cent growth last year, negative – 0.4 per cent per annum productivity in the last 5 years, high inflation at 4.6 per cent last year and very high 74 per cent household debt to GDP.
And such a quagmire that we are in, despite the 2 controversial IRs and our very liberal foreign labour policies – as you so aptly put it – “this new reality will have implications for the country’s foreign worker policy”.
Auspicium Melioris Aevi
P.S Press Freedom Ranking?
With Fook Kwang writing such great Editorials – I’m sure Singapore’s Press Freedom ranking of 149th (our lowest ever) will improve – Keep it up man! (like what we used to say in RI)