berthahenson

Still poor or not?

In Money, News Reports on August 8, 2014 at 4:35 am

A new acronym has been inflicted on the reading masses: SPOR. It stands for Singapore Public Sector Outcomes Review, released by the Finance ministry. Shame on TODAY and BT for using this acronym that only a civil servant can come up with. At least ST declined to relay the affliction.

But on a more serious note, what does SPOR (haha) has to say about S’pore? It depends on which newspaper you read.

ST predictably rah-rahed on the higher pay of the lowest paid here, that 20th percentile of workers. Those at that level earned $1,800 a month, up by 6 per cent since 2009. That’s five years ago. I don’t know why it’s a five-year comparison, when the report is released every two years. Maybe because there isn’t too big a difference in wages of less well-off between 2012 and 2014? Anyway, this is real wage growth, after accounting for inflation.

In any case, the article led off with the closing Gini co-efficient as a key achievement of the G in the past two years.

What are the figures?
ST and BT say from 0.434 in 2012 to 0.412 last year (after taxes and transfers, says BT )
TODAY says from 0.478 in 2012 to 0.463 last year. (doesn’t say if this is before taxes and transfers)

Anyway, BT gave better insight on this income inequality story by pointing out that those wages went up because of transfers – the G forcing through higher wages because of clamp down on foreign labour and other wage policies. While things look better on the wages front, the productivity front “remains a concern’’. Economists now say full growth for this year will be 0.5 per cent, higher than 0.2 per cent previously but still way off 2-3 per cent G target.

So what’s the implication? That we are getting higher salaries that are “artificial’’ because it’s not underpinned by better productivity and it’s to do with G re-calibrating the supply front? Oh dear. Or is the argument really that the low wages have been kept “artificially low’’ in the first place because so many foreigners were doing the jobs? Really. Can argue anything in which way…

BT also has economists saying that core inflation which was 1.7 per cent last year will go up. And this means that real wage growth may not go up as much and that Gini co-efficient may widen yet again. Unless there are more G transfers?

Anyway, go read BT for a fuller story. But read TODAY also for other spores of Singapore, like how public satisfaction with public transport has fallen yet again.

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