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Inequality is a “problem of success” that is “very difficult to overcome”: Manpower Minister Josephine Teo

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Responding to sharp questions by veteran diplomat Tommy Koh at the Institute of Policy Studies (IPS)’s 30th anniversary conference, Manpower Minister Josephine Teo asserted this morning that inequality is a “problem of success” that is “very difficult to overcome”.

At the talk, entitled Diversities: New and Old, Koh brought up the hot topic of minimum wage and challenged the government’s claims that it can lift the wages of the lowest income earning Singaporeans without a minimum wage policy.

Referring to the nation’s founding Prime Minister Lee Kuan Yew’s vision of income distribution, the Ambassador-at-Large asked:

“Mr Lee said, ‘I want to build a Singapore which resembles an olive — very few very rich, very few poor people, and a very large middle income.’

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“I recently plotted the income profile of Singapore. It does not look like an olive. It looks like a pear — a large number of people at the bottom. What has happened to Mr Lee’s olive? How did the olive become a pear? And if the pear is not what we want, what can we do about it?”

Teo branded inequality as a “problem of success” that is “very difficult to overcome” in her response:

“One perspective of looking at it is how is it that there is still a group that was not able to make the leap? But another way of looking at it is that it is a problem of success. It is because a system has been built up which enabled large numbers of people, large swathes to move up to the middle, then from the middle to move up to the upper-middle types of level of attainments, and this group has expanded.

“And I said this at the beginning of my presentation — that with each successive cohort, the parents very naturally want to expand that advantage. It’s something that is very difficult to overcome, and I think the honest way of dealing with it is to say that the journey ahead is going to be harder than what it was in the past. If we fail to recognise that, then I think we will never be able to find a way to bridge.”

Teo had earlier painted the Government’s Workfare Income Supplement (WIS) as a “permanent feature of our social security system” that works as well or even better than a minimum wage policy.

She justified that the cost of WIS is taken on by the government, “with no risk of inducing unemployment or illegal employment of such workers,” unlike the minimum wage system that may cause employers to cut back on staff due to higher manpower costs.

Koh, however, pointed out that “hundreds of thousands” in Hong Kong, Japan and South Korea have been lifted out of poverty and are now able to “live in dignity” after their countries implemented a minimum wage policy that did not lead to a rise in illegal employment or unemployment like Teo suggested.

Teo provided anecdotal evidence and countered that an elderly security guard in Hong Kong was forced to relocate to Southern China after a younger employee replaced him when the minimum wage policy kicked in there. She asked, “To what extent is he living his retirement years in dignity?”

The minister, instead, offered that it is crucial for Singapore society to disconnect moral worth from economic worth in order to solve the inequality problem:

“But there is another very important aspect, I think, which is that regardless of where we are… that economic worth must not equate to moral worth, that there must be a way that we are able to look each other in the eye and look past all the markers of social success and say to each other, at the level of human beings, there is a certain inherent worth in each one of us.”

“And we can treat and interact with each other with respect and consideration. And if we are not able to do that, then I think no system will be able to help us succeed. That to my mind, is the greater challenge of our society.”

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