Is it true that Singapore will be an increasingly difficult place for the have-nots?

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After 43 years of independence, Singapore has come a long way in terms of development, from a once fishing village to today’s bustling urban city.Coupled with the development of our landscape and infrastructure, Singapore has also experienced significant economic growth. Though the growth of our economy has slowed down since the then Prime Minister Lee Kuan Yew stepped down, our economic growth is still relatively large when compared with those of other countries. Such rapid growth of the economy has led to Singapore’s ever-changing industry, and Singapore will be an increasingly difficult place for the have-nots.

When we refer to the have-nots, we are talking about the poor and the lowly skilled and uneducated. They are the ones who lack the wealth, skills or education to keep up with the country’s rapid economic development. Because such impressive economic growth often entails a rise in the cost of living, the poor find it harder to survive when they cannot match a rise in wealth with the rising cost in living. The rise in the cost of living is a result of a chain effect when a country experiences more economic activity. What usually takes place is a rise in profits of a particular firm or a company, corresponding with the rise in income of the employees, which ultimately increases consumption of goods and services by those who have enjoyed a pay rise. However, more often than not, these benefits are unevenly distributed and are only enjoyed by the rich and the higher-middle class. Hence, the inflation, which is caused by increased consumption, will raise the cost of living while the poor see no change to their income levels to cope with this inflation. Just this year, Singapore has seen an all-high inflation rate of 7%. Most of the goods that have seen a price spike are necessary commodities like food and energy that the poor cannot do without. This inflation rate increase was due to a rise in oil prices as global demand for oil increase while global supply decreased. Since Singapore imports most of its resources, the country is very susceptible to external shocks such as that of the oil price increase.

It does not help that Singapore has a lack of strong trade unions to push for increased wages for the poor. The lack of strong trade unions works in favour of foreign direct investment into the country. Moreover, steps taken by the government to redistribute wealth have been questionable. The Goods and Services Tax (GST) has always been seen as a form of regressive tax, which is more detrimental to the poor than the rich as it takes up a higher percentage of the poor’s income. Yet, in recent years, the government has actually raised GST from 5% to 7%. Although they claim to have given tax rebates to everyone, including larger amounts for the poor, will this really benefit the poor in the long run? Some have argued that the government should raise progressive taxes (to aid the poor) such as income tax and corporate tax to reduce income inequality. However, how high can these taxes go before the incentive to work diminishes? In addition, the economy is continuously growing. Yet, the government cannot tax the rich and high middle-income groups indefinitely.

The other group of people classified under the have-nots are usually poor. Thus, the uneducated and lowly skilled can be said to be a subset of the poor. The reason why the lowly skilled and uneducated will find it harder to live in Singapore is simple. It is because of Singapore’s shift from the manufacturing industry to a service-oriented industry. As other developing countries start to tap on their comparative advantage of abundance, cheap labour, Singapore has been smart to shift the economic focus onto service- oriented industries like biomedical industries and tourism. Even though the manufacturing of semiconductors for exports still exists, industries producing other manufactured products such as car parts have seen unemployment. Given the fact that they are lowly skilled and uneducated, these people will find it hard to find new jobs in the service industry. In many situations, most are left unemployed for prolonged periods of time while those fortunate enough to find a new job may find themselves with a lower income. This lowering or even loss of income makes the circumstances for the have-nots worse, especially in the light of the aforementioned increasing inflation rate.

Then again, things are not all that bleak for the have-nots in Singapore. Over the years, the government has pumped more of its expenditure on education and the retraining of the lowly skilled and uneducated population. With increasing foreign workers providing competition for lower end jobs, the lowly skilled and uneducated are now pushed to improve themselves, to increase their efficiency and productivity and ultimately better their standard of living. Since the elderly have proved to be more resistant to the idea of retraining, it is the younger generation that the government should be focused on. Aside from providing retraining resources, our education system has also been improved to equip people with the skills and know-how to find decent paying jobs in the future. Polytechnics, which focus on developing the specific skills of the students, have seen a greater student population in the last five years, proving that there have been adequate resources provided to increase the carrying capacity of such educational facilities.

The government has even taken steps to raise the retirement age by creating incentives for firms that hire the old. As such, the burden of an ageingpopulation in Singapore will not fall so heavily on the younger generation, specifically those classified as the have-nots, and this will subsequently make it easier for them to survive in our society. Lastly, Singapore has always maintained a relatively low unemployment rate of 2% to 3%. Though some of those employed may have very low pay, such a situation is still much more optimistic than one with extremely high rates of inflation.

In conclusion, though Singapore has become and will increasingly become a difficult place for the have-nots, there have been several promising steps taken by the government to ease the situation for them. As a result, I am optimistic that Singapore’s economic growth and ever-changing industry will start to benefit and not cripple us in the future.