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https://gutzy.asia/2023/09/15/netiz...smissal-of-latest-basic-living-income-report/
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SINGAPORE: A recently published report, “Minimum Income Standard 2023: Household Budgets in a Time of Rising Costs,” unveils figures detailing the necessary income households require to maintain a basic standard of living, using the Minimum Income Standard (MIS) method.
The newly released study, spearheaded by Dr Ng Kok Hoe of the Lee Kuan Yew School of Public Policy (LKYSPP) specifically focuses on working-age households in 2021 and presents the latest MIS budgets, adjusted for inflation from 2020 to 2022.
The study also warned that although measures like the Progressive Wage Model (PWM) and Workfare Income Supplement (WIS) have had a positive impact, as noted by the study, they haven’t completely addressed the disparity.
The researchers advocate a multi-pronged approach: including reforming wages by establishing a universal wage floor to ensure a decent standard of living for all Singaporeans; overhauling policies to create sustainable, adaptable, and future-proof measures, especially in the retirement income system, to support those with interrupted careers.
The study also suggested strengthening social safety nets not only financially but also through mental health resources, community-building initiatives, and skill development programs.
Lastly, transparent governance is crucial, with consistent reporting mechanisms and accurate benchmarks to foster trust and efficient resource utilization in public schemes.
Regrettably, on Thursday (14 September 2023), the Finance Ministry (MOF), Manpower Ministry (MOM), and Ministry of Social and Family Development (MSF) jointly issued a statement dismissing the idea suggested by the report, claiming that minimum household income requirements amid inflation “might not accurately reflect basic needs”.
Instead, they claimed that findings should be seen as “what individuals would like to have.”
The Singapore government further defended their stances for the Progressive Wage Model (PWM) and other measures to uplift lower-wage workers, arguing that “a universal wage floor is not necessarily the best way” to ensure decent wages for lower-wage workers.
“Set too low, the wage floor will benefit fewer workers than the Progressive Wage Model (PWM). Set too high, workers who are less-skilled risk losing their jobs, especially if their jobs can be automated.”
The joint statement mentioned that tripartite partners have recently expanded the PWM to more sectors like retail, food services and waste management, as well as occupations like administrators and drivers.
The government’s statement also questions the methodology of the Minimum Income Standards (MIS) report, highlighting limitations such as its reliance on respondent profiles and group dynamics.
“The MIS approach used is highly dependent on respondent profiles and on group dynamics. As the focus groups included higher-income participants, the conclusions may not be an accurate reflection of basic needs.”
The joint statement claimed that the MIS approach included discretionary expenditure items such as jewellery, perfumes, and overseas holidays.
Additionally, the government underscored an assumption made in the report, which assumes that lower-income families would receive the same amount of financial assistance as median households, arguing that lower-income families actually qualify for and receive more financial assistance.
“As such, there is a risk of over-stating the Minimum Income and under-stating the amount of Government support received by lower-income families.”
“Our own analysis suggests that the proposed monthly MIS budget of around SGD1,680 per capita is similar to the average monthly expenditure of SGD1,650 per capita for all families with children rather than reflecting a more basic set of needs ”
Regarding retirement adequacy, the government defended their efforts to strengthen support for members who may not fully benefit from the CPF system, including lower-income workers and caregivers.
They highlighted ongoing reviews of schemes, scope, coverage, and payout quanta to ensure relevance and adequacy.
“We have been strengthening support for such members through other means such as the Majulah Package for seniors aged 50 and above, and upcoming enhancements to Silver Support and Workfare. ”
“To ensure that our schemes remain relevant and adequate, we regularly review the scope, coverage and payout quanta of our schemes. For instance, the amount of cash assistance and the per capita household income benchmark for ComCare were just raised in August 2022 and July 2023 respectively. ”
The government’s defensive response to the Singapore researchers’ proposal to reform the current wage model sparked backlash from the online community.
A heated debate has erupted on the social media platform Reddit in response to the joint statement from the three ministries, with many netizens expressing their disappointment in the ruling government under the People’s Action Party (PAP) for appearing out of touch with the realities of normal civilian life.
Some argue that the decline is already underway and it may be too late to prevent it, yet the government remains reluctant to reconsider the current system.
For instance, a comment has pointed out that wealth inequality is eroding the fundamental fabric of the nation, and those in positions of power seem oblivious to this fact.
While the government has raised concerns about the accuracy of the latest MIS 2023 report in assessing basic needs, one Redditor emphasized that it should be the society and community that ultimately determine what constitutes basic needs, rather than relying solely on the government’s narratives.
Some Redditors are reminding the government that wages are also a fundamental basic need, and they question why the three ministries would argue against the accuracy of the MIS report.
“Money is the basic need,” one Redditor pointed out, calling the government out of touch. The user questioned the need for high ministerial salaries and emphasized that government employees also require money to function beyond basic necessities like food, water, and goodwill.
Growing concerns over rising costs
One Reddit user shed light on the escalating prices of Certificates of Entitlement (COEs), and pointed out a critical concern: if COE costs continue to soar, it’s an ominous sign that the overall cost of living will inevitably rise, especially given that transportation plays a pivotal role in a thriving economy.
Furthermore, this perceptive Redditor drew attention to a concerning statistic – a whopping 60% of individuals in their twenties are grappling with the affordability of housing in Singapore. Notably, this concern isn’t about lavish condos or grand mansions but centers on Build-to-Order (BTO) flats.
“When the bulk of the youths worry about public housing affordability, something is very very wrong in this country,” the comment warned.
“What’s the point in just talking about basic liveable wages when cost has run wild?”
In a contrasting view, a Redditor known as ‘Buddyformula’ argued that considering Singapore’s distinctive local SME culture, it might be preferable for the government not to implement a minimum wage.
The user expressed concerns that this move could lead to most SMEs paying wages around 20% above the minimum wage, potentially resulting in foreign workers being preferred under the pretext that locals are unwilling to take up such jobs.
The user claimed that according to Workers’ Party (WP) calculations, this would translate to a rate of SGD1,300 plus 20%.
However, this perspective faced opposition from another comment, who suggested that a more stringent approach to foreign labour policies, combined with measures to curb spiralling inflation, could prevent this outcome.
In response, ‘Buddyformula’ continued to express pessimism, emphasizing the challenges companies already face in hiring foreigners.
He argued that making foreign labour policies even more stringent could lead to businesses leaving Singapore, and held a sceptical view of many SME bosses would exploit the introduction of a minimum wage to their advantage.
Another Redditor expressed annoyance, suggesting that the ministry was attempting to divert attention by highlighting items like jewelry and perfume in the report.
The user emphasized that the report should be examined to understand the broader and more significant issues it presents, rather than focusing on minor details.
“Does MOF still think wanton mee cost only SG two dollars?”
Other comments on the thread take a sarcastic tone, implying that government officials may not have considered the perspectives and experiences of ordinary people.
Some even humorously suggest that the Ministry of Finance might still believe that a bowl of wanton mee costs only two Singapore dollars while “crafting their responses at a high-end restaurant like Les Amis”.
A comment also underscored the effect of inflation on everyday hawker meals, recalling a time when SGD10 could comfortably cover a day’s meals, which is no longer the case today.
The newly released study, spearheaded by Dr Ng Kok Hoe of the Lee Kuan Yew School of Public Policy (LKYSPP) specifically focuses on working-age households in 2021 and presents the latest MIS budgets, adjusted for inflation from 2020 to 2022.
The study also warned that although measures like the Progressive Wage Model (PWM) and Workfare Income Supplement (WIS) have had a positive impact, as noted by the study, they haven’t completely addressed the disparity.
The researchers advocate a multi-pronged approach: including reforming wages by establishing a universal wage floor to ensure a decent standard of living for all Singaporeans; overhauling policies to create sustainable, adaptable, and future-proof measures, especially in the retirement income system, to support those with interrupted careers.
The study also suggested strengthening social safety nets not only financially but also through mental health resources, community-building initiatives, and skill development programs.
Lastly, transparent governance is crucial, with consistent reporting mechanisms and accurate benchmarks to foster trust and efficient resource utilization in public schemes.
Singapore Govt challenges MIS 2023 report’s representation of basic needs
Regrettably, on Thursday (14 September 2023), the Finance Ministry (MOF), Manpower Ministry (MOM), and Ministry of Social and Family Development (MSF) jointly issued a statement dismissing the idea suggested by the report, claiming that minimum household income requirements amid inflation “might not accurately reflect basic needs”.
Instead, they claimed that findings should be seen as “what individuals would like to have.”
The Singapore government further defended their stances for the Progressive Wage Model (PWM) and other measures to uplift lower-wage workers, arguing that “a universal wage floor is not necessarily the best way” to ensure decent wages for lower-wage workers.
“Set too low, the wage floor will benefit fewer workers than the Progressive Wage Model (PWM). Set too high, workers who are less-skilled risk losing their jobs, especially if their jobs can be automated.”
The joint statement mentioned that tripartite partners have recently expanded the PWM to more sectors like retail, food services and waste management, as well as occupations like administrators and drivers.
The joint statement questioned the study’s accuracy in reflecting basic needs
The government’s statement also questions the methodology of the Minimum Income Standards (MIS) report, highlighting limitations such as its reliance on respondent profiles and group dynamics.“The MIS approach used is highly dependent on respondent profiles and on group dynamics. As the focus groups included higher-income participants, the conclusions may not be an accurate reflection of basic needs.”
The joint statement claimed that the MIS approach included discretionary expenditure items such as jewellery, perfumes, and overseas holidays.
Additionally, the government underscored an assumption made in the report, which assumes that lower-income families would receive the same amount of financial assistance as median households, arguing that lower-income families actually qualify for and receive more financial assistance.
“As such, there is a risk of over-stating the Minimum Income and under-stating the amount of Government support received by lower-income families.”
“Our own analysis suggests that the proposed monthly MIS budget of around SGD1,680 per capita is similar to the average monthly expenditure of SGD1,650 per capita for all families with children rather than reflecting a more basic set of needs ”
Regarding retirement adequacy, the government defended their efforts to strengthen support for members who may not fully benefit from the CPF system, including lower-income workers and caregivers.
They highlighted ongoing reviews of schemes, scope, coverage, and payout quanta to ensure relevance and adequacy.
“We have been strengthening support for such members through other means such as the Majulah Package for seniors aged 50 and above, and upcoming enhancements to Silver Support and Workfare. ”
“To ensure that our schemes remain relevant and adequate, we regularly review the scope, coverage and payout quanta of our schemes. For instance, the amount of cash assistance and the per capita household income benchmark for ComCare were just raised in August 2022 and July 2023 respectively. ”
“Oblivious leadership as wealth inequality threatens social fabric”
The government’s defensive response to the Singapore researchers’ proposal to reform the current wage model sparked backlash from the online community.A heated debate has erupted on the social media platform Reddit in response to the joint statement from the three ministries, with many netizens expressing their disappointment in the ruling government under the People’s Action Party (PAP) for appearing out of touch with the realities of normal civilian life.
Some argue that the decline is already underway and it may be too late to prevent it, yet the government remains reluctant to reconsider the current system.
For instance, a comment has pointed out that wealth inequality is eroding the fundamental fabric of the nation, and those in positions of power seem oblivious to this fact.
Reddit user asserts it’s up to society to define basic needs, not the government
While the government has raised concerns about the accuracy of the latest MIS 2023 report in assessing basic needs, one Redditor emphasized that it should be the society and community that ultimately determine what constitutes basic needs, rather than relying solely on the government’s narratives.
Wages as fundamental basic need
Some Redditors are reminding the government that wages are also a fundamental basic need, and they question why the three ministries would argue against the accuracy of the MIS report.“Money is the basic need,” one Redditor pointed out, calling the government out of touch. The user questioned the need for high ministerial salaries and emphasized that government employees also require money to function beyond basic necessities like food, water, and goodwill.
Growing concerns over rising costs
One Reddit user shed light on the escalating prices of Certificates of Entitlement (COEs), and pointed out a critical concern: if COE costs continue to soar, it’s an ominous sign that the overall cost of living will inevitably rise, especially given that transportation plays a pivotal role in a thriving economy.
Furthermore, this perceptive Redditor drew attention to a concerning statistic – a whopping 60% of individuals in their twenties are grappling with the affordability of housing in Singapore. Notably, this concern isn’t about lavish condos or grand mansions but centers on Build-to-Order (BTO) flats.
“When the bulk of the youths worry about public housing affordability, something is very very wrong in this country,” the comment warned.
“What’s the point in just talking about basic liveable wages when cost has run wild?”
Local SME culture vs. foreign worker policies
In a contrasting view, a Redditor known as ‘Buddyformula’ argued that considering Singapore’s distinctive local SME culture, it might be preferable for the government not to implement a minimum wage.
The user expressed concerns that this move could lead to most SMEs paying wages around 20% above the minimum wage, potentially resulting in foreign workers being preferred under the pretext that locals are unwilling to take up such jobs.
The user claimed that according to Workers’ Party (WP) calculations, this would translate to a rate of SGD1,300 plus 20%.
However, this perspective faced opposition from another comment, who suggested that a more stringent approach to foreign labour policies, combined with measures to curb spiralling inflation, could prevent this outcome.
He argued that making foreign labour policies even more stringent could lead to businesses leaving Singapore, and held a sceptical view of many SME bosses would exploit the introduction of a minimum wage to their advantage.
Redditor criticizes the Ministry’s focus on minor details in the MIS 2023 report
Another Redditor expressed annoyance, suggesting that the ministry was attempting to divert attention by highlighting items like jewelry and perfume in the report.
The user emphasized that the report should be examined to understand the broader and more significant issues it presents, rather than focusing on minor details.
“Does MOF still think wanton mee cost only SG two dollars?”
Other comments on the thread take a sarcastic tone, implying that government officials may not have considered the perspectives and experiences of ordinary people.
Some even humorously suggest that the Ministry of Finance might still believe that a bowl of wanton mee costs only two Singapore dollars while “crafting their responses at a high-end restaurant like Les Amis”.
A comment also underscored the effect of inflation on everyday hawker meals, recalling a time when SGD10 could comfortably cover a day’s meals, which is no longer the case today.
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