Income
Gap
1.
We know why income gap is
widening – globalisation, technology, and cut-throat competition
a.
This is the way the world
is going, and Singapore will be carried
along
b.
Lower
end
i.
Hundreds of millions of
unskilled workers in China,
India and
Vietnam entering the
workforce, and holding down wages
ii.
Our workers are feeling it
too
c.
Middle and higher
end
i.
IT automating simple
jobs
ii.
Knowledge economy putting
premium on education and skills
iii.
Demand for people with
skills to do what computers and robots cannot do
iv.
Each extra year of
schooling – 14% increase in wages
v.
Increase is even higher for
university education
d.
At the very top, fierce
competition
i.
In sports, you want to
watch Tiger Woods play golf, or Roger Federer play tennis
ii.
If a company is hiring a
CEO, they try hard to get the best candidate, not one who is almost as
good
iii.
If you need legal advice,
you want to hire the best lawyer to fight your case
iv.
Winner takes all – top
incomes zooming up
(1)
Tiger Woods earns US$100
million a year (prizes and endorsements), much more than the No 2 (Jim
Furyk)
(2)
Widening gap between the
best and the rest
e.
Income gap is also linked
to the ageing population
i.
Many of the poor are likely
to be elderly
ii.
Those who do not provide
enough for old age will face difficulties in retirement
2.
What can we do?
a.
First overall strategy is
to grow the economy
i.
Generate more resources to
help those in need
b.
Ageing – very difficult
problem with no easy solutions
i.
Will talk more about this
later
c.
For the
lower-end
i.
Emphasise training, skills
upgrading and job redesign
(1)
Raise the productivity of
low-income workers
(2)
Help them to earn better
pay
(3)
This is what NTUC is doing
ii.
Plus Workfare
d.
For those at the top – good
that they are doing well
i.
Can’t hold down their
incomes, or levy higher income taxes
(1)
Talent will
leave
(2)
Our economy will lose
vitality
(3)
Many others will
suffer
(4)
We are prospering now
because we have brought income taxes down, welcomed talent, and attracted
businesses to thrive here
ii.
But those who have
succeeded must show that they care for their fellow citizens, e.g. through
philanthropy
(1)
Happening in the
US
(2)
Here too – many
Singaporeans are donating generously to good causes, e.g.
(a)
Universities
(i)
NUS, NTU and SMU
receive endowments to fund many projects; they have nearly 80 endowed
professorships
(ii)
Major
donations
[1]
Lee
Kong
Chian
School of Business in
SMU
[2]
Yong
Loo
Lin
School of Medicine in
NUS
(b)
Hospitals
(i)
Tan Tock
Seng
(ii)
Khoo Teck
Puat
(c)
Sim Wong
Hoo
(3)
More people should do this,
according to your means, and from your heart
(4)
Collectively, these
individual responses make our society more cohesive and compassionate
e.
For the vast majority in
the middle
i.
Our policies must enable
them to do well, and provide them with many opportunities to move ahead
ii.
One major strategy is HDB
home ownership
(1)
Best form of social welfare
for Singaporeans
(2)
Give everyone a stake in
the nation’s success
(3)
Have some new plans, which
I will elaborate later
iii.
Another is education
(1)
Rising payoffs on education
(2)
Hence best way to level up
our society