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So lately, inequality has been given the spotlight here in Singapore.

It probably started when Dr. Tommy Koh brought it to the fore while moderating a dialogue with DPM Tharman during an Institute of Policy Studies (IPS) event. DPM Tharman, as well as other politicians, rightly pointed out that the Oxfam study that put Singapore near the bottom in tackling income inequality was not a very good study.

This also comes after Minister Janil Puthucheary hosted a video that (kind of) explored the issues surrounding “class” in Singapore. (You can read my take on that here)

And following Dr. Tommy Koh’s remarks on his own Facebook page about how a pump attendant he met was earning less than what Dr. Koh called a “living wage”, the Ministry of Social and Family Development (MSF) has come out with a paper that essentially defends its policies.

The latest is a feature by the Today newspaper that showcases four individuals that managed to make it to university despite the odds of coming from a low-income household.

 

And this is the big issue I have

I don’t doubt that we have very smart people in the government and civil service. The problem I have is that it seems that the way they’ve thought about and approached the issue of inequality is to assume that giving people unconditional help will always lead to bad outcomes.

Look through all the responses from the government or those who are part of it and you’ll notice that the message is consistent: we give targeted help, it works as you can see the GINI coefficient lower with the help, and education is the escape route.

Implicitly, the message is that we cannot give handouts as we have no idea whether people will take it and spend it on alcohol or drugs or what-not. We need to be prudent because these are taxpayers monies. Also, if we give unconditional handouts, it’ll encourage people to be lazy and not want to work.

Read any of the profiles of those featured in the Today piece and you’ll wonder whether it’s necessary to make their families jump through hoops in order to keep the lights on or put food on the table. For one of them, the lack of money meant that he couldn’t even collect his exam certificate.

We have to remember that doing means-testing, following up on their cases and what-not also has a cost. Administrative personnel and social workers have to be employed, paperwork has to be filled, and inevitably, lags will cause situations such as their electricity being cut.

 

A different paradigm

Now, I’m not saying that we should jump straight into giving away stuff for free to everyone or even the needy. What I’m saying is that we need to experiment instead of sticking to the same mantra that we’ve always stuck to.

Look at the debate the term “minimum wage” generated at the same IPS forum. Both MOS Josephine Teo and economist Walter Theseira fell back on standard theoretical formulations of what minimum wage could do to employment when there is economic literature that shows that minimum wage may not be all that bad.*

It’s pretty clear that some ideas are outdated or have even been proven false by the empirical data. In Singapore, the problem is that there is too much debate and not much collection and analysis of data when it comes to social services. There needs to be more experimentation in order to check our beliefs and see if studies overseas apply to our context as well.

Now without the data, I cannot conclude that unconditional help is universally superior to our current approach but I think we’ve come a long way from 1965. So, we can afford to do more for those that struggle to even meet basic needs like shelter, food, utilities, and education.

 

Notes:

*To be honest, I’m quite shocked that Kruger and Card’s study was from the 90s and so many people fall for the econ 101 analysis of how minimum wage will lead to lower unemployment.

 

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