Daily Lessons from Life 04 January 2011 - Widening income gap a concern

"Widening income gap a concern - CNA 04 January 2011

SINGAPORE: Challenges of dealing with a widening income gap in Singapore are here to stay, say political watchers and economic analysts, while MPs say the key to narrowing the gap is up-skilling low-wage workers.

They were responding to the Prime Minister's New Year's message which highlighted the issue.

Singapore experienced strong growth in 2010, and economists say one group likely to benefit is the high income earners.

CIMB regional economist Song Seng Wun said: "As a result of the very strong growth, what you normally find is that the top 20 per cent of income earners will generally ride on the growth and benefit from it far more than the lower 20 per cent.

"Benefiting them are things like wealth from appreciating assets such as properties, whereas in the lower income group, you do not have that kind of appreciation of asset.

"If you're... in the bottom 20 per cent (group), your salary is relatively stable (but) you're only getting that much, whether (the) economy is growing 15 per cent or four to six per cent.

"(But) if you're (in) the top 20 (per cent group), you'll likely ride (on) the growth and the kind of opportunity that presents much more than a bottom 20.

"... As a result after an exceptional year, you do find that income gap will widen very significantly. Perhaps with a return to normalcy, we will see a little bit of return in the gap itself"."

Yes. Income gap is widening. Now. Other times, it was narrowing. It is dynamic and can flow either ways.

Lessons for me are:

1. what is wealth? materials or emotional or spiritual? For me, it is not how much you have but how much you can give that defined a wealthy person;

2. Does high income necessarily means one is happier? For me, wealth does not guarantee happiness though adequate wealth in an urbane and commercial environment does mean you will not be deprived of the basic material necessities!;

3. What can be done to help 'materially poor' people to break the poverty spiral, as some MPs had descried? For me, it means deciding where to live and what type of lifestyle ones choose. If you want to be in an urbane and commercial environment, you will need to have job - whether high paying or just paying enough to make 'reasonable' ends meet! So, society must create jobs. The other alternative is to be an entrerpreneurer. Self-employed and is totally dependent on one's business acumen and of course, luck in some instances to be successful! In the market, there is easily 100 failed new businesses for every successful one!!

Widending income gap is not a concern until it creates a sense of inequality. That no matter how hard and how committed you strive, the odds are always favouring those 'old' rich!