Protecting the Singaporean Middle Class?

December 9, 2008

flyingpigsSometimes when pigs do fly we should just sit back and gaze in awe at the inspiring sight of such aerodynamic bacon. These last couple of weeks have been surreal. The PAP government actually talked about the need to protect Singapore middle class workers from globalization! Minister Lim Swee Say went public to urge companies to retrench Singapore workers last. Earlier he expressed disappointment at DBS’s quick-trigger retrenchment of employees. The consequences of globalization are revealing interesting economic trends with potential political ramifications.

Ten years ago, in such a situation, you’ll never hear of a PAP minister telling local and international companies to save Singaporean jobs. Instead, the most likely response from the government would be to scold its citizens for being so unproductive and useless, and then urge them to go for re-training where they can value-add to their economic worth. This would put them in a better position to take advantage of the next economic upswing.

But times have changed. In the past, all politicians had to worry about with globalization was the hollowing out of low wage jobs. Today, it’s increasingly clear that globalisation not only threatens low-wage workers in developed countries but the middle class as well. Many studies in Europe and America have exposed one of the fallacies of globalisation, that is, the middle class would always beat the competition by re-educating and re-training. Instead, these studies have shown that white collar ‘new economy’ jobs have flown from high-wage to low-wage countries, especially to low-wage countries that educate and train their own workers in order to attract high-value investment.

About a year ago, PM Lee Hsien Loong made two important announcements that addressed the concerns of the middle class. Firstly, the needy sections of the Singaporean middle class will get government assistance and, secondly, Singaporeans will pay less than PRs and foreigners for education and health services. These announcements, designed as systematic policy initiatives to bluffer the more vulnerable sections of the middle class from the side-effects of globalisation, also signal a change in the government’s relationship with its middle class. Collectively, these announcements are the equivalent to a “piggies to flight deck” call.

In the past, although the middle class received sweeteners from time to time in the form of the Progress Package or Singapore Shares, it had generally been left on its own with regards to government assistance because it had, unlike the working class, been assumed to possess the necessary skills and qualifications to survive global market trends.

The PAP government’s new initiatives and rhetoric suggest that it is now politically trickier to tell the needier members of the middle class to lower their expectations to meet their income means. During the Asian financial crisis in 1997 and the recession in 2001 it was not uncommon for Singaporeans to be told that the government could not be expected to provide financial assistance to maintain their pre-recession lifestyles. However, there were many other genuine cases that were turned away because their monthly household income exceeded the quota to qualify for help.

The recession from the global financial crisis has hit the middle class first, with the working-class feeling the trickle down effects. How the government plans to address the middle class casualties of recession will come clearer on Budget Day early next month. The details of the Budget in Jan will tell us if the piggies are cleared for take off. 

Nevertheless, the acknowledgement that the middle class needs financial help and protection suggests two paradigm shifts. The first is in the government’s thinking. The middle class is no longer thought of as some Hollywood action hero who can be shot, kicked and stabbed a million times by the baddies and still ride off into the sunset with the girl. The middle class can be wounded, and what’s more, many of these wounds are not inevitable.

The second paradigm shift is a bit more fundamental. It goes straight to the heart of the myth of meritocracy. What we have learnt is that globalisation and neo-capitalism have little regard for talent and merit that do not help sustain them. Hence, while Singaporeans believe that all our talents will be justly rewarded, globalisation is a fussy benefactor that only rewards what the market demands. The section of the middle class increasingly marginalised by the capricious market trends will wonder what happened to the mantra of an honest pay for honest work. For them the ideology of meritocracy will ring hollow. Soar Piggy soar!



4 Responses to “Protecting the Singaporean Middle Class?”

  1. sushibar Says:

    very sharp observation

  2. Love this article.

    For once, there are not enough PAP fingers to plug into the leaks.

    Bloody lost! That’s where they are.

    I love your pigs too!


  3. […] Foreigners First – groundnotes: Protecting the Singaporean Middle Class? – TOC: S’poreans and foreigners both paying the […]

  4. Patrick Loh Says:

    At least someone is talking aboout the Singaporean middleclass. But realistically, I think most of them have gone underwater for too long to be able to recover.

    I do think that such comments made by the government are too late and perhaps is just another voting ploy.

    If you care to look around, Singapreans have lost many middle management and higher management jobs to foreigners since a decade ago. They are still losing to them. The painful part is losing these jobs to lesser qualified candidates just because they appear to fit the role better with a cheaper package. I know of many senior management people with solid experience and solid qualifications who are passed by because headhunting companies find it easier to sell “foreign talents” (presumably superior goods) at a “discounted” price than local goods at a higher price (+CPF).

    I think many middleclass are bitter with the fact that such people are let into the economy indiscriminately and without the country providing a safety net for her own children.

    In countries where foreign workers are permitted to enter, safety nets in the form of work permit quotas, trade protectionsim measures and social security are already put in place.

    It is suicide to let in foreigners at every level without any such system in place. This is unthinkable. There must certainly be privilege and prie in being a Singaporean. What is the basis for that?

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