Screenshot from video on Singapore Voices Youtube channel

Economist Yeoh Lam Keong explains the problem of poverty in Singapore in inaugural Progress Singapore Party talk

On 10 September, the Progress Singapore Party (PSP) held its inaugural PSP Talk on the topic of poverty in Singapore and policy gaps in the social safety nets.

Moderated by non-practising lawyer and advocate for social change, Khush Chopra, this talk featured well-respected economist Mr Yeoh Lam Keong who gave a presentation on the three major reforms that the government can take to strengthen the social safety net in Singapore and help lift thousands of citizens up from absolute poverty.

Mr Yeoh, who is best known for being the former Chief Economist of GIC, started off by talking about his time in the GIC. Between 1987 and 2007, he said he didn’t think about the poor much as he was too caught up trying to keep abreast of the work already on his plate. He was also upset by the arrest of a close friend of his in 1987 under Operation Spectrum on “completed fabricated charges”. This put him off thinking about social policy for close to 20 years.

But then in 2007, another friend, Prof Donald Low, academic and former associate profession from Lee Kuan Yew School of Public Policy, requested for his help in conducting an inter-ministerial study to look at poverty in Singapore. The process of conducting this study sparked something in Mr Yeoh. He said, “To my shock and horror, I realised that the position of the poor in Sg was much worse and much more awful than I can imagine. So that struck me.”

Mr Yeoh said the findings were then presented to two Deputy Prime Ministers, senior ministers, and permanent secretaries – it was well received. However, while the government was open to and did opt to take on some of the recommendations put forth, it was a slow process that left many gaps till today.

Mr Yeoh focused specifically on the absolute poor in Singapore. The absolute poor, he explained, are counted as such when their regular income does not enable them to lead a decent existence and they are unable to cover their basic needs like food, shelter, utilities, medical services, and education.

Not being able to meet those needs puts you below the living wage.

“It’s a painful and shameful experience and disgraceful for the rest of society,” Mr Yeoh lamented.

How many in Singapore are living in absolute poverty?

Mr Yeoh pointed out that while Singapore has seen a gradual decrease of absolute poor over the past few years, the latest estimates are that there are around 250,0000 Singaporeans who could be counted as ‘absolute poor’. That’s about 100,000 to 130,000 or about 7.5-10% of households in Singapore.

Mr Yeoh then noted that one of the recommendations that weren’t taken up back in 2007 was that poverty be measured properly. This is a crucial step because if we don’t define a problem properly and exactly, we cannot design a solution.

To get an idea of the general numbers in Singapore, Mr Yeoh looked at data from general household surveys conducted every five years and recent household surveys conducted every two years. From there, he found three categories of poor: the working poor, elderly poor, and unemployed poor.

Mr Yeoh specifies that even if one member of the household is fully employed, they are still classified as poor if the family as a whole are unable to meet their basic needs and are earning below the living wage. He classified the minimum to be about $500 per capita or less for a three to five-person family.

Noting the survey results published by the Lee Kuan Yew School of Public Policy (LKYSPP) at National University of Singapore in May, the study suggested that an older Singaporean above 65 years old would need $1,379 a month to meet his or her basic needs, which includes modest holidays and entertainment.

Taking out those latter two factors, Mr Yeoh estimates that a person needs a minimum of $1,000 a month to meet their basic needs. But even after receiving Workfare Income Supplements (WIS) and Silver Support Scheme (SSS) payouts, the number of people living in poverty still stands.

Mr Yeoh said that while WIS has increased over the years and it has helped some, more still needs to be done. He pointed out that just above the bottom 10% of Singaporeans, there are another 10% who are earning about $2,500-3,000 a month. These households can meet their basic needs but have little to no savings, meaning if anything unexpected happens, they will fall straight into the bottom 10%.

What can be done?

Mr Yeoh then went on to present several reform suggestions that would help address this rather crucial issue.

He asserted that even after “good schemes” like the WIS and SSS, there are still about 100-130k absolute poor or about 8-10% of households or 250,000 Singaporeans. He noted that all other schemes added up together – Comcare, public assistance, GST voucher, all the various subsidies and schemes – only covers about one-third of the problem.

As such, WIS and SSS payouts should be increased significantly, in cash. This is important to note because of the current WIS payouts, 60% goes into CPF leaving people with less cash than they actually need to cater for basic needs.

Mr Yeoh also suggested that the government introduce a comprehensive national unemployment insurance scheme, which he says will be even more important in the future as the gig economy grows, leaving more people unemployed for short periods as they jump from contract to contract.

In Singapore, Mr Yeoh says, people don’t fall between the cracks into poverty, but rather they fall into the ‘chasm’ because there is no bridge and no safety net. This is why all three reforms are necessary in order to help the poor meet their basic cash needs.

Read more about the reforms Mr Yeoh proposed here: “Economist Yeoh Lam Keong proposed reforms to address poverty in Singapore: Increase WIS & SSS and introduce comprehensive national unemployment protection”