Who benefits from widening income gaps and increasing GDP?

“The sense I get is that Singapore has focused too much on growing the size of its economic pie but not enough on distributing it.” Aneel Karnani, professor of business strategy at the University of Michigan, who has spent a decade studying income inequality

 “Economists noted that despite the economy growing at nearly 6 per cent a year in the past decade, median incomes rose by just 1.2 per cent a year.” – “Slower Growth, if inclusive, ‘may not be bad'”, The Straits Times, 22 Oct 2011

“Having been away in Cambodia for a year, I was shocked that the cost of liiving here has risen so much and the income gap among Singaporeans has widen so much.” – Ms Saleemah Ismai of Aidhal, The Sunday Times, 1 Jan 2012

No brainer, importing of foreign labours and “talents” will boost GDP, but who are the real beneficiaries? I can think of a few:

  • Govt revises FY2011 surplus upwards to $2.3b“.  Foregin worker levies boosted “other taxes” item by almost $600m to $3.34b; COE for vehicles alone is $2b with the shortage of licenses to go around; stamp duties from properties collected is $2.94b and Asset tax is $3.86b. Betting tax from casinos and other legal entities is $2.4b. Corporate tax is $12.2b and personal income tax grew by $400m to $6.8b and GST increased by $550m to $8.75b with the increased in population.  Talk about multiple sources of income,  the Government’s sources of income is the ultimate money making machine and we have not even included the sale of lands and the investment gains and dividends from GIC and Temasek Holdings!
  • The million dollars ministers, president and high ranking government officials, more population = higher GDP = more pay!
  • The big corporations e.g. Singtel, DBS, SMRT more population = more growth!
  • The bosses of SMEs and small businesses, hiring cheaper foreigners = lowering costs and no need to crack heads to retain locals

On the other hand, the man-on-the-street have to

  • compete with more and cheaper foreigners
  • tolerate unreasonable bosses
  • squeeze in buses and mrts
  • escalating housing prices
  • increasing food prices and inflation

As Todayonline’s reader Jayster rightly pointed out:

“a bit sick of the rich getting richer and poor getting poorer
worked for 8 days straight without a break and my boss ask me to work on sat
if i never say i will complain to MOM, i would have worked 11 days without a break
while he and my CEO is sleeping at home doing nothing
their pay is probably 10x more than me
the income gap has to narrow “

From Todayonline’s reader Local Talent on how the system is being abused left right and centre by unscrupulous business owners at the expense of both foreign and local workers:

1) Boss made her withdraw $500 every month to return to him
http ://forum.singaporeexpats.com/ftopic80969.html

2) Declared salary is $2,500 but I just received $1,800
http ://www.pinoysg.com/forum/viewtopic.php?t=47052

3) E Pass approved, but paid only $1,300 –
http ://www.pinoysg.com/forum/viewtopic.php?t=46731

4) $2,000 On Payslip, But Return $300 To Boss The Next Day
http ://www.pinoysg.com/forum/viewtopic.php?t=45832

5) Recorded salary $2,000 but actual pay $1,100
http ://www.pinoysg.com/forum/viewtopic.php?t=46462

6) Employer offered $1,400 but declared $1,800 for S Pass
http ://www.pinoysg.com/forum/viewtopic.php?t=44331

7) Renewal of S Pass with $1,800 salary (Pay $1,300 actually)
http ://www.pinoysg.com/forum/viewtopic.php?t=41854&start=60

8) In contract $1,800. But $1,200 only in real life
http ://www.pinoysg.com/forum/viewtopic.php?t=46589

9) “Most of the E PASS holders I know are receiving less than $2k” (By Byatch)
http ://farm7.static.flickr.com/6089/6049526248_81f8617728_b.jpg

and the list goes on and on……… 


IT IS TIME TO MODERATE GDP GROWTH, focus on more heartware rather than hardware that the Government is currently and wrongly focusing. More MRTs and more housing do not equal to happier citizens!


“This Rally speech has chosen to ignore the elephant in the room. The Government can fight the fire now by increasing the number of BTO (Built-to-Order) flats and buses, but without addressing the root of the problem, which is the lack of co-ordination between population planning and infrastructure planning, such problems could recur.” – NSP secretary-general Hazel Poa


related links:


Illegal pay pact: Plug the loopholes

Source: The Straits Times  20 Aug 2011

I AGREE with Mr N. Nagesh (‘Illegal pay pact’; Tuesday) on the need for serious enforcement against illegal pay pacts between employers and Employment Pass (EP) holders.

One company I worked for over- declared the salaries of its EP-holders to the Ministry of Manpower (MOM) and the Inland Revenue Authority of Singapore to fill the positions of draughtsmen.

When I discovered it, I reported the matter to MOM and supplied details of the wrongdoing as well.

The ministry replied that it could act only if the EP-holder complained, an answer that goes against common sense: Why would an EP-holder lodge a complaint if he was part of the plot?

If such loopholes are not plugged, imposing tougher conditions like raising qualifying pay levels or requiring more stringent educational qualifications may not necessarily make it harder for employers to hire foreign professionals.

Priscilla Poh (Ms)